Is it worth buying now if I can?

saganaki20

My ex and I are separating and selling our jointly owned home. We will both clear around £45k approx.

I have around £30k in savings plus the sale of the house and a MIP which would bring me to around £160k, which isn’t currently enough to buy a house anywhere on my own in my county. In order to buy something straight away, I could only afford a flat but Im so concerned as I will be putting everything I have into something which ultimately, will only be mine for a few years I hope. This isn’t my forever home is what I’m trying to say.

Also, I don’t know anything about flats, other than a friend who had an absolute horror story of an experience so I’m concerned about being landed for a bill for a new roof for £50k in 6 months time. Likewise service charges and ground rent, it’s all new to me and I’ve heard about ground rent doubling and other scary tales which concern me. On the flip side, my mortgage payments would be around £400 per month

On the flip side, I’ve been weighing up renting for 6-12 months but again; I’m hearing it is a nightmare out there to find places and the cheapest 1 bedroom flat is £700+ per month. 

My biggest concern is prices falling, and I know there is no crystal ball but based on the above - please can you give me your thoughts - is it worth buying a cheaper flat now or just renting for XYZ time? 

Thank you for your thoughts! 

AFF8879

It depends how long before you’ll be able to afford a house that you can see yourself in long term…. If it’s anything under 5 years I would just rent a small flat. Flats seem to be becoming increasingly difficult to sell at the moment and so I wouldn’t want to risk being stuck in negative equity in a property I wasn’t happy with.

nimbo

Is there another county just across the way? 

I live very close to several. And have broadened my search area to find the house I want to buy. The different areas I looked in had massive differences according to who I would pay council tax to. Is there a compromise to be made? 

It’s an extra five minutes to work each day. But I get to live in a pretty cottage with a mint green door. (I’m a girl and it’s a lovely colour). 

Also have I read right? You’d have a deposit of £75 k (minus fees and moving) and the top end of your budget is still £160? 

Is there no scope to go any higher with such a large deposit? 

Personally I hate moving - but I also wouldn’t want to live in a flat that was noisy and cramped. It would make me miserable. 

When I had to move I chose to live in a slightly less well though of area and have a two bed terrace for £450 a month.  Had I lived in an apartment in town it would have cost more. But I wanted to save for a deposit. 

I appreciate form what you’re saying you live in a much more southern town than I do. 🤣🤣

SameOldRoundabout

Is another county totally impossible? I think in your shoes I’d rather buy than risk being priced out of the market in future, as I don’t think prices will fall. Stagnate maybe but not really dip enough to make a difference. 

I’d also be concerned about a flat and the risks that come with leasehold etc. Is there another county that you could make work even if it’s a bit of a pain? 

steve866

Are there any small conversion flats that are share of freehold available?

Gentoo365

You can start the process of looking at flats.

I owned one for about 5 years, despite really wanting a house (same issues, house prices) and even after all the service charges and stuff the fact that my mortgage payments were reducing my mortgage meant I came out better off than if I rented for that period. 

If you think you will be able to buy a house in 2-3 years then maybe things are different, but being out of the property market and 'paying someone else's mortgage' when you have the opportunity to buy a flat. Those are the things to think of.

Only think I would say is try to buy 2 bedroom or above in an area where there is clear demand for rental, as then the value is slightly more stable due to btl/rental possibilities. Also of course you may find yourself deciding to rent it out in future.

[Deleted User]

Don't rent. Property is always a good investment.

saganaki20

Thank you all so much for your thoughts, it’s really appreciated.

In terms of trying to get a bigger mortgage, unfortunately I am on a much lower wage now (£21k basic) after moving industries in the last year due to COVID. I know banks are very nervous now so I thought I shouldn’t try to push to the maximum.

I have an appointment on Thursday with a mortgage advisor so hopefully he can advise me more accurately than me playing around with calculators on the internet 😊

There is a very strong rental market in my area, I hadn’t considered renting it out further down the line, thank you for that idea. 

I would certainly feel better having a 2 bedroom as well, I think both in terms of having some more space for myself when I’m living there and for when the time comes for resale/rental. 

You’ve given me lots to think about, thank you! 

MaryNB

saganaki20 said:

Thank you all so much for your thoughts, it’s really appreciated.

In terms of trying to get a bigger mortgage, unfortunately I am on a much lower wage now (£21k basic) after moving industries in the last year due to COVID. I know banks are very nervous now so I thought I shouldn’t try to push to the maximum.

I have an appointment on Thursday with a mortgage advisor so hopefully he can advise me more accurately than me playing around with calculators on the internet 😊

There is a very strong rental market in my area, I hadn’t considered renting it out further down the line, thank you for that idea. 

I would certainly feel better having a 2 bedroom as well, I think both in terms of having some more space for myself when I’m living there and for when the time comes for resale/rental. 

You’ve given me lots to think about, thank you! 

If you buy a flat check the leasehold terms because some don't allow you to let it. Also letting it can be a big undertaking and can come with significant financial risk. 

Markneath

After going through a divorce I made the mistake of rushing into buying again, the house also had a few jobs that needed doing so spent about 10/15 k getting it right, fast forward 2/3 years I wanted to buy with my girlfriend and hindsight says buying that house was a mistake it would have been cheaper to rent even if renting was more expensive of course if house prices had been flying up it would have been a different story.
It was the only house I have ever made a loss on. 
Take a rental for 6/12 months and think carefully about your next move.

nicknameless

[Deleted User] said:

Don't rent. Property is always a good investment.

What absolute nonsense.