Is it worth buying for 2 years?

mije1983

The question is, does this scenario

Winterrose wrote: »

b) prices may fall and I could be stuck (area I'm looking at is the edge of SW London)

fill you with more, or less, dread than this one....

Winterrose wrote: »

The thought of the alternative - spending around 21k in rent for 2 years - fills me with dread

kinger101

I've been in a position where I've bought and sold in under two years, but it was fortunate in that the property market was still increasing (modestly). I came out slightly better than break-even, but it probably wasn't worth the ballache of going through two lots of conveyancing.

I think the point raised by Western on using your FTB stamp duty exemption up (in at best a flat market) would tip me toward renting until I could afford a 2-bed.

goodwithsaving

My first place, I ended up owning for 18 months. My second, for 11 months. My third looks like it may be under the 2 year mark as well. None of the moves have been planned and I still did well out of them financially. Where I haven't done so well however is the mental impact of moving so many times in such a short period of time. The emotional upheaval, starting again and the stress of conveyancing has all taken its toll.



Would I do it all again to get to where I am now? Yes.


My point is, if you buy wisely and buy something which can be rented out / is desirable / needs some TLC - you should at least be less likely to be in a property you cannot shift. If you buy somewhere sensible, it will hopefully hold its value (if not gain a little). If not, how likely is it to decrease in value - less than what you would pay in rent (+ conveyancing fees) or more?



Think carefully on location first. Get a portable mortgage and a lender who is open to providing consent to let.

Winterrose

Thanks everyone. lessonlearned, I do need a crystal ball! :rotfl:

financegeek wrote: »

I think it's something only you can decide in the end. worst case scenario if you can't shift your flat when you want to move, could you rent somewhere bigger and rent your flat out?

I have thought of this and would definitely do that if possible. I'm not sure on how it all works and how much it would cost me to do that but will look into it. Would hopefully be an option.

kinger101 wrote: »

I think the point raised by Western on using your FTB stamp duty exemption up (in at best a flat market) would tip me toward renting until I could afford a 2-bed.

The stamp duty argument is a good one, but if I was to hold off buying for a couple of years, I'd likely be buying somewhere with my partner and he's not a FTB so it wouldn't apply anyway sadly.

I just can't see myself being able to save enough to bridge the gap between the max mortgage I can get and a 2+ bed property for many years, so I feel my only hope of ever working my way up to a bigger place is to invest at the bottom and gradually build my equity.....but that involves putting the years in in the one-bed flat!

westernpromise

I feel my only hope of ever working my way up to a bigger place is to invest at the bottom and gradually build my equity

True, but bear in mind that this only works if prices are static (meaning you increase equity by paying off the mortgage) or rising (where you acquire nominal equity through inflation, but when you come to trade up, you find everything else has inflated too). If prices should slip over the shorter term, you could end up standing still or worse off. It might be worth doing some test numbers based on say a 10% fall in prices over 2 years.

With that said, events have a habit of overtaking you - I thought I'd be in my first 1-bedder for 18 months but I sold it 11 years later.

Incidentally the stamp duty issue you mention can be managed. If you buy a property together but put it all in your name, you get the FTB benefit and you can separately have you lawyer draw up a deed of trust that apportions shares regardless of what's at the Land Registry.

I have done this because I'm not married to my partner and we own unequal shares of our house; the Land Registry record just shows two names with no indication of whether we own half each or some other percentage.

theartfullodger

If prices rise, yes: If prices drop, no.

What are house prices going to do please?

Beardmidget

Ugh, after going through a sale (of our FTB house from 2009) over the past 6 months, I!!!8217;m not sure i!!!8217;d Bother for the sake of 2 years. Such a ball ache.

(In south west London; so similar conditions)