Should I rent or buy?

jules9

Looking to seek out flat/small house early next year.
In the current market would I be advised to rent for 6-12 months and wait for property prices to possibly fall as seems to be predicted or buy?
Advice appreciated.

tr3mor

The house I'm in at the moment costs me £800 per month to rent. It would cost around £1600 on an interest only mortgage. So it suits me to rent.

No one can predict what will happen in the long term. However, you're not going to lose out if you rent for 6-12 months then have another look at buying.

wymondham

Hold fire and rent whilst saving as much as you can, looks like things are taking a dip so you'll be better off waiting a while.... just my view!

nollag2006

Rent ... no, I mean BUY !!!!

Why not make your own choice, rather than rely on a load of bears who have escaped from the confines of housepricecrash.co.uk. You may note than many of the same pseudonyms appear here ...

PasturesNew

Sounds like you've not done either before. So rent. Once you've got a place you will discover all kinds of annoying things about it ..... which you will wish to avoid when you buy something later. It'd be awful to have made a mistake about something important only to be stuck as you bought it. e.g. orientation, type of windows, type of heating, general layout, preferred flooring, old or new, garage or not, drive or not, garden or not....

Having said that, expect to find new annoying things at each place you have, but every new address is a new learning curve leading you eventually towards the perfect place.

karnsculpture

The answer really depends on where you live, what the property prices are and what the rents are. I live in the North East and it still makes sense to buy IMHO - I have mates that are paying more for a 2 bed flat with a small kitchen than I am for a mortgage on a 2 bed house.

do_it_today!

PasturesNew wrote: »

Sounds like you've not done either before. So rent. Once you've got a place you will discover all kinds of annoying things about it ..... which you will wish to avoid when you buy something later. It'd be awful to have made a mistake about something important only to be stuck as you bought it. e.g. orientation, type of windows, type of heating, general layout, preferred flooring, old or new, garage or not, drive or not, garden or not....

Having said that, expect to find new annoying things at each place you have, but every new address is a new learning curve leading you eventually towards the perfect place.

Hi PasturesNew
How many moves does it take to find your ideal place? I move roughly every 2.5 years and I still feel no where close to perfect place

However I do agree things seem to be cooling abit do lots of research about what you want check areas and types of properties whats that saying act in haste and repent at your leisure.... I think this can be very true of moving! either renting or buying

jaype

Agree with PasturesNew - I have found out so much via renting (how to recognise condensation damp, for instance, which wrecks all your furniture and clothes...). And you'll also find out a load about an area. Given that house prices are stagnant currently you won't be losing out - there are very few places now where renting costs more than buying per month (assuming a repayment, not rent from the bank interest only mortgage), so make sure you save the difference for that deposit.

IveSeenTheLight

PasturesNew wrote: »

Sounds like you've not done either before. So rent. Once you've got a place you will discover all kinds of annoying things about it ..... which you will wish to avoid when you buy something later. It'd be awful to have made a mistake about something important only to be stuck as you bought it. e.g. orientation, type of windows, type of heating, general layout, preferred flooring, old or new, garage or not, drive or not, garden or not....

Having said that, expect to find new annoying things at each place you have, but every new address is a new learning curve leading you eventually towards the perfect place.

This is really good advise, nothing to do with house prices but an important learning step for you.
Rent for 6 months, save as much as you can. Learn the cost of running a home before you buy one. This will help you appreciate what your running costs are and how much you can afford.

Ultimately however, while some people have lost money in property (stretched themselves too far when buying coupled with rising unemployment and interest rates) the majority of people will agree that property in the long term is one of the safest investments you can make.

Even properties which suffered through the crash in the early 90's (at this time there is not the same employment and interest rate issues as then) will be valued way above what the valuation was before the last crash.

In some areas prices may drop slightly or stagnate, in others they will continue to increase.

If you are wise and shrewd with your money, build in a little spare cover in case interest rates increase, then you would only benefit by buying in the long term.

jaype

Another consideration - if there is a downturn (looking increasingly likely), you had better like the property and be prepared to live in it for a long time (so make sure it is big enough for extra kids and so on) - negative equity and falls mean that though it will eventually be worth the same then more than you bought it for, it could take eight to ten years (as in the early 90s) to get to that point. Make sure you don't get stick with something that's going to be too small that you will be foreced to sell at a loss...

pinkshoes

You need to compare cost of renting compared to the interest on a mortgage. There's a long list of advantages and disadvantages to living in both owned and rented properties!!

It's recommended to have at least 10% to put down as a deposit, preferably more! Also, don't overstretch yourself on the borrowing front i.e. stick to a maximum of 3x your salary.

House prices are leveling off a bit at the moment (depending on area - some areas still rising and probably will continue to do so, some are falling) so do your homework on the area you intend to buy in.

Also think where you'd like to be in 5 years time... a house is a longterm investment, not a short one, so if you think you may have to move, can the house be rented out, or sold easily?