Should I buy a second home?

vijayrao

Hi,
We have a house in Aberdeen which we are currently renting out. We are currently based in England( moved here during the COVID time) and thinking of going back to Aberdeen. Aberdeen's housing market has been in a downturn for a few years. It's been falling for a few years and our own home is in negative equity. 

We are really confused if we should move back and even more confused if we should simply go back and buy one more property. For the last few years, we have saved a reasonable deposit for a second home. Since the market has fallen in Aberdeen we were thinking if we should take the advantage and invest in a second home. 

We wanted to buy in England but we cannot afford it as the prices are absolutely crazy and even if we can afford it we don't see value for money for the asking price. 
A reasonable 4 bedroom detached house in an outstanding school area is around £625,000 to £750,000 in Wokingham. A similar or in fact more fancy house in Aberdeen would cost just around £375,000. 

My work does not require me to be based in England anymore as it is now fully remote. I am in mid 40's and don't plan to move jobs. 

Other benefits we see of going back to Aberdeen are:

• Better NHS access 
• Less crowded compared to England
• More open space and greenery 
• House prices are less so you get more bang for your bucks 
• Less mortgage burden( even if we buy a second home ) 
• Free College education for kids 
• Clean fresh air and better-tasting water  
• Aberdeen is Oil & Gas economy but my job is not in the Oil & Gas sector

On the other side, since we moved to England only a couple of years back and were thinking if we should give some more time and wait for the house prices to come down? I don't see any hope the prices will ever come down in England. 

I just wanted to get some thoughts and opinions from others to see if the above makes sense. 

Cheers

Flugelhorn

really depends what you want to do - yes Aberdeenshire is lovely but  there are pros and cons to everything (the free uni thing has a sting in the tail as places are limited for Scottish students but it may not be a problem).


I was tempted to move to Scotland but ultimately decided I liked the better weather down south, so when I retired I turned south on the M6 rather than north. 

vijayrao

Flugelhorn said:

really depends what you want to do - yes Aberdeenshire is lovely but  there are pros and cons to everything (the free uni thing has a sting in the tail as places are limited for Scottish students but it may not be a problem).


I was tempted to move to Scotland but ultimately decided I liked the better weather down south, so when I retired I turned south on the M6 rather than north. 

Agree the weather is definitely much better in England. That is one thing we will miss if we move back. 

Snakes_Belly

The Midlands is a good area to live. Shropshire, Staffordshire, Derbyshire and Nottinghamshire all have some good areas where the housing prices are comparable with Scotland. Communications are good. We do tend to escape the worst of the weather. That does depend on where you live as some areas do suffer flooding. Lichfield is a nice City. The river is outside of the town so you don't get the same issues as some of the towns in Shropshire.        

GDB2222

Why do you want a second home? You have not really explained that bit.

vijayrao

GDB2222 said:

Why do you want a second home? You have not really explained that bit.

 Simply as an investment( for retirement ). We also put some money in stocks and pensions. So instead of keeping cash in the bank, we thought to invest in a second home. 

vijayrao

Snakes_Belly said:

The Midlands is a good area to live. Shropshire, Staffordshire, Derbyshire and Nottinghamshire all have some good areas where the housing prices are comparable with Scotland. Communications are good. We do tend to escape the worst of the weather. That does depend on where you live as some areas do suffer flooding. Lichfield is a nice City. The river is outside of the town so you don't get the same issues as some of the towns in Shropshire.        

Thanks. We will explore this area. The only reason we were thinking of Scotland and Aberdeen is we have lived there for more than 10 years and know the area better. But we are open to considering other areas. 

GDB2222

vijayrao said:

GDB2222 said:

Why do you want a second home? You have not really explained that bit.

 Simply as an investment( for retirement ). We also put some money in stocks and pensions. So instead of keeping cash in the bank, we thought to invest in a second home. 

The BTL boat may have sailed, but leaving that to one side why have both properties in Aberdeen?

Snakes_Belly

vijayrao said:

GDB2222 said:

Why do you want a second home? You have not really explained that bit.

 Simply as an investment( for retirement ). We also put some money in stocks and pensions. So instead of keeping cash in the bank, we thought to invest in a second home. 

I do understand as the stock market can be very volitile and you don't want all of your eggs in one basket. 

There is a demand for quality rental property. It's not just people who can't afford to buy. Some people take short term contracts for a couple of years and may not want to buy or may already have a property and rent out their own while undertaking a short term contract.

Thrugelmir

Are you mortgage free on the existing property?

GDB2222

Thrugelmir said:

Are you mortgage free on the existing property?

The op says negative equity. 

https://www.investopedia.com/terms/m/martingalesystem.asp