Better to rent or buy? Need to move ASAP

namieco

So we were saving up for our first property and there's been a spanner in the works. Landlord is selling up and we need to move out ASAP.

We don't have the deposit we wanted yet. If we get a 5% deposit it looks like we may be able to get a 150-80k house, depending on what a mortgage advisor would say. We are in an expensive area so it wouldn't get us much, but we could perhaps make do in it for 2 years, do it up a bit and sell it on.

Or we could continue renting, go as cheap as comfortably possible, and continue saving for deposit for a more suitable house which we could buy in a couple years.

Which is better financially?

Slithery

Just because the LL is selling doesn't mean you need to move out. The new owner becomes your LL.

grumiofoundation

Has landlord served you notice? 

Will you actually need to move anyway ? If the property is sold to another landlord nothing will change for you. 

Buying and then selling within a couple of years is not a risk free proposition. Obviously number 1 risk is house prices dropping, but obviously hard to predict. 

You also are incurring an extra set of costs e.g solicitors, stamp duty.

Plus you are sacrificing first time buyer perks - LISA bonus, FTB stamp duty relief. 

On the other side you would pay 2 years of rent. So you would need to weigh up rent vs mortgage interest + extra costs incurred due to buying/selling. 

Monsternextdoor

Could you buy the house from the landlord ? 

lesalanos

Slithery said:

Just because the LL is selling doesn't mean you need to move out. The new owner becomes your LL.

This 👆.  there is no need to rush into moving out 

steampowered

It doesn't seem worth buying if you are going to want to move again in 2 years. By the time you've totted up conveyancing fees for your purchase, conveyancing fees for your sale, estate agent fees for your sale, mortgage interest on a 95% LTV product, mortgage product fees, loss of first time buyer stamp duty relief ... that won't be far off 2 years rent. 

If you think you will be able to afford a longer term home in 2-3 years time, personally I would aim for that. Making the most of Lifetime ISAs. 

namieco

We do have to move out- the landlord has emailed us asking us to.

We already have a LISA and everything set up to buy, but we haven't saved to enough to buy in the range we need. 

Thanks for the advice- we will look at renting for another couple of years and continue saving.

grumiofoundation

namieco said:

We do have to move out- the landlord has emailed us asking us to.

We already have a LISA and everything set up to buy, but we haven't saved to enough to buy in the range we need. 

Thanks for the advice- we will look at renting for another couple of years and continue saving.

For clarification for your rights. 

You need to be served notice by the landlord - them telling to you need to leave isn't sufficient.
https://england.shelter.org.uk/housing_advice/eviction/section_21_eviction

Even if you are served notice you do not have to leave when it expires. Also it may well be invalid (see link below includes reasons it may be invalid - e.g. deposit not protected, no up to date GSC). 

https://forums.moneysavingexpert.com/discussion/comment/67759913#Comment_67759913

However whatever the reality of notice validity etc you will have to leave at some point, and since your position seems to be that you will need to save for a couple more years will need to find somewhere else to rent.

But you should bear in mind the above so as not to be pressured to move out before you need to, you have time to find suitable alternative accommodation. You certainly don't have to move ASAP. 

If the landlord wants you gone ASAP to sell they may be willing to help make your move easier. I. e. paying you, releasing deposit early etc - after all it sounds like they may be asking you to agree to a legally binding tenancy agreement contract before you need to. 

RAS

Listen to what you have been told and stop panicking.

1. You do not need to move out of your current rental "ASAP".

2. There is a strict legal process that the LL has to follow, and if he can't comply with that the chances of him actually been able to comply with the requirements for sale are small.

3. Even if the LL issues a valid S21 notice, that is only notice that he will go to court if you don't leave, likely to be 2023 given current back-logs. 

4. Meantime, you are on a periodic tenancy. Read your tenancy agreement to find out what you need to do give notice.

5. Meantime start looking for an alternative rental but do not take anything just to enable your LL to sell.

Leggitte

How is your relationship with the LL? If the relationship is good then this can be solved amicably. I was in a similar position a couple of years ago and when the LL told me he wanted to sell the property and it would sell better if it was empty, I told him that I was looking to buy in the neighbourhood (which was true) and that the sale was already in an advanced stage (which was true). He decided not to serve S21 and I handed in my notice when I could move into my new house. Best result for both of us. 

namieco

Leggitte said:

How is your relationship with the LL? If the relationship is good then this can be solved amicably. I was in a similar position a couple of years ago and when the LL told me he wanted to sell the property and it would sell better if it was empty, I told him that I was looking to buy in the neighbourhood (which was true) and that the sale was already in an advanced stage (which was true). He decided not to serve S21 and I handed in my notice when I could move into my new house. Best result for both of us. 

Pretty good. We've basically been the perfect tenants for years. The place is too small for us so we do need to move anyway, but its cheap, so we hoped to hang on and stay there until our deposit had built up enough to buy a suitable home. So we aren't going to battle it and will take it as our opportunity to move somewhere a bit bigger. We have until December under the extended Covid timings. 

Was just not sure whether continuing to rent while saving up or buying a cheap place was more financially sensible.