Spreadhseet for calculating whether to buy or rent

falcon21

Hello all!

The flat I'm living in has been offered to us by our landlord. However, I'm trying to work out which is better financially over a varying number of years.

Does anyone have a spreadsheet to calculate this?

On the Buy side you would consider Capital appreciation/depreciation on the house (obviously have to estimate this based on forecasts), deducting the cost of mortgage interest and home insurance/furnishing/maintenance etc etc

On the rent side you would deduct rent but get interest on the deposit money saved...

You get the idea.

I started to try and draw one up myself, but I'm not so good with excel yet

Joe_Bloggs

What are your options if you choose not to buy your landlord's property ? Is eviction a possibility ? Will your landlord , make your place available to estate agents, prospective buyers,their surveyors, decorators etc. This can be intimidating so check how close to the end of your lease when it is considered reasonable for all this mayhem to begin.

Has any body else purchased a flat in the same property/or vicinity ? How much did they pay ? You can find out with
http://www.upmystreet.com/ for free. You could also interrogate the Land registry if you want more details at a cost.

Is it worth the asking price ? What are and have been the service charges and what will they be in the future ? How long is the lease ? Who is the real landlord for the whole property ? What are their terms and fees ?

You could be in a good position to bargain if you have all the facts, a good credit history and a considerable deposit and can get an affordable mortgage. Your Landlord would save 1-2% by avoiding estate agents fees and avoid a rent free period if the property were vacant prior to sale.

Register with local estate agencies to see what else is on the market either for rent or purchase. Ask from them the name of a good but independent conveyancing solicitor.

Factor these uncertainties into excel and the costs of relocation if you can!

J_B.

falcon21

We are sitting tenants, so we are not expecting to be evicted!

dunstonh

rent creeps up over time and you will pay for the rest of your life. A mortgage will go up and down within a band and you pay nothing after the 25 year period. So include that in your factoring.

Joe_Bloggs

Confirm your tenancy rights with your local CAB if you are doubtful or in any way concerned with the future. Collect your paperwork including the lease for your tenancy before making an appointment. Your landlord probably let you rent the place out of sheer altruism without regard for personal gain in an escalating property market. Circumstances may have changed.
J_B.

dag_2

We are sitting tenants, so we are not expecting to be evicted!

When you say sitting tenants - does that mean you moved into your current address before 15 January 1989?

If you moved in after this date, then you're probably not a sitting tenant.

But if you really are a sitting tenant - your tenancy rights are very strong indeed. You may find that you've got more chance of being legally evicted by a mortgage lender than by your landlord.

Would your mortgage interest be less than your rent? If it isn't, then I think in your case, it probably isn't worth buying. While you remain a protected tenant, you can apply to the rent officer to fix your rent. But once you've bought and got a mortgage, you're at the mercy of interest rates. And there's no going back.

The reason the landlord is offering it to you is because it's very hard to sell units with protected tenants in them. You can use this to your advantage, to negotiate the price down.

Joe Bloggs seems concerned that your landlord's offer is a sign that he might try to evict if you turn it down - however, in my opinion, this is very unlikely to happen. All the same, checking with the CAB would be a good idea.

rent creeps up over time and you will pay for the rest of your life. A mortgage will go up and down within a band and you pay nothing after the 25 year period. So include that in your factoring.

I think that analysis is oversimplistic. If you're a protected tenant, then your rent is probably much less than your mortgage payments would be. You might be better off continuing to rent, and putting the difference in a savings account instead. This is especially true if interest rates are likely to go up.

Xbigman

Forget all the fiddly bits for now.

1. Get a legal opinion as to whether or not you are a protected tenant.

2. How much is your rent.

3. How much would your mortgage repayments be.

You can over analyse things like this forever but these are the critical questions at the heart of your decision.
Regards


X

cheghead

https://www.hsh.com/calc-amort.html