When you need somewhere to live - rent/buy?

SecondStar

My ex partner and I broke up a week ago. I live in Northern Ireland.

We are joint tenants on a house we bought for 115k with a 15% 50/50 deposit, 2 years ago.

I am staying with a friend temporarily. I am meeting with my ex on Friday to discuss finances, the house, our pets, and our living situation.

I cannot afford to buy out my ex from the house - I would have to remortgage at 100k, and I couldn’t afford the repayments & rates by myself.

Either he will buy me out somehow, or we will need to sell the house.



I have 6k of personal savings. If we sell the house for the 115k we bought it for, we should each walk away with about 8.4k cash, after selling expenses. So I’ll have about 14.4k cash in total, after selling the house.

My take home pay is 1.5k a month. After essential bills & basic expenses, I’m left with £630 to spend on housing costs. 

As of today, there are only 8 properties within 20 miles available to rent for <£600, that don’t explicitly exclude pets (I have a dog, a cat, and a rabbit). 

However, as of today there are 19 properties within the smaller area that I would like to continue living in available for sale, for <90k. With a 10% deposit, a property of 90k would have monthly costs of approximately £475. A property of 80k would have monthly costs of approximately £400.



What I’m pondering is - everyone needs to live somewhere.

Is it more financially aware to pay £600 a month in rent to live in a crappy flat, living on bare expenses and unable to save any more money, and trying to hold onto that 14.4k cash in the bank?

Or, is it more sensible to buy a crappy flat for 80-90k, live on bare expenses but be able to save £200ish each month, but have my cash money reduced to 2.5-3.5k in the bank?



I don’t know where I want to live, or what I want to do, long term. For now, is it worth buying a cheap property while knowing it’s not a ‘forever home’, but that I need a roof over my head? Is buying in this type of situation the best option for a ‘roof over my head’?

Any things or opinions appreciated, but if they could come with some gentleness - it’s a rough time right now.

Helenochka

I'm very sorry that you're in this situation.
I'm from Northern Ireland myself although I haven't lived there for a long time. I travel back regularly and absolutely love the place.
Apart from the issue of whether to rent or buy, will your dog be OK living in a flat?  Especially if you're out at work most of the day. Have you considered re-homing him/her? And the cat and rabbit for that matter. 
Any possibility of moving in with this friend long-term? In return for rent of course. 
If not, is house-sharing with someone else an option?
Again, having pets is going to make that more complicated.

Re. renting/buying, my first thought is that £2.5-3.5 is a pretty small emergency fund for a property owner. You'd be living very close to the edge. 
That, together with the fact that you don't know where you want to live or what you want to do long term, inclines me to think you'd be better off renting. Just for now. 
I truly wish you the best of luck and hope things improve soon.

SecondStar

Helenochka said:

I'm very sorry that you're in this situation.
I'm from Northern Ireland myself although I haven't lived there for a long time. I travel back regularly and absolutely love the place.
Apart from the issue of whether to rent or buy, will your dog be OK living in a flat?  Especially if you're out at work most of the day. Have you considered re-homing him/her? And the cat and rabbit for that matter. 
Any possibility of moving in with this friend long-term? In return for rent of course. 
If not, is house-sharing with someone else an option?
Again, having pets is going to make that more complicated.

Re. renting/buying, my first thought is that £2.5-3.5 is a pretty small emergency fund for a property owner. You'd be living very close to the edge. 
That, together with the fact that you don't know where you want to live or what you want to do long term, inclines me to think you'd be better off renting. Just for now. 
I truly wish you the best of luck and hope things improve soon.

I appreciate the reply.

My dog and cat will be fine. My rabbit will be fine, if I’m able to buy or rent somewhere with either an outdoor space, or +1 bedroom. They are my highest outgoing, but they are also seniors, my responsibility, and my only family, and I’ll not be rehoming them.

I can stay with my friend until June at the latest, after that she has a pre-agreed arrangement for another person to be her lodger. My other local friends all live with partners, and no space at the inn.


My inclination towards buying rather than renting would be that I wouldn’t be adding any money to my savings if I rented. So if anything cropped up, it would only diminish my cash, and hurt my chances of buying in the future. I can see myself getting stuck in a cycle of renting without being able to save, and having a potential deposit of savings slowly disappear.

I feel that if I’m able to buy somewhere, at least I can take out credit if dire emergencies arise, and I’ll be able to save money each month with lower payments.


But if anyone sees flaws in that that I’ve not accounted for, please tell me.

Annisele

SecondStar said:

I don’t know where I want to live, or what I want to do, long term. For now, is it worth buying a cheap property while knowing it’s not a ‘forever home’, but that I need a roof over my head? Is buying in this type of situation the best option for a ‘roof over my head’?

I think that for now - as in, for right now, a week after you've split from your partner - it's a terrible idea to be making any long term plans at all.

You won't have your £14k of cash until you've sold the house, either to your ex or to somebody else, and you won't be doing that for a few months at least. Until you know who you're going to be selling to, you're not in a strong position to go making offers on flats even if you were absolutely certain you wanted to buy. As of right now, you don't even know if you're going to be in a chain or not. (It's something of a buyer's market right now where I am, which isn't NI. So that might not be a big issue. But you're still unlikely to be an attractive buyer while everything is up in the air. In a couple of months you might be a very attractive buyer indeed, but not right now.)

If your friend is able to put you up until June, I think you should take at least a couple of months of breathing space before even trying to decide.

I think I'd be leaning towards renting in your shoes - mostly because you don't sound sure you want to stay in the area - but the pets might make that extremely difficult.

Helenochka

As an animal lover I’m pleased and relieved that you’re taking your pet ownership responsibilities so seriously. 

Flats in Northern Ireland - especially crappy ones - are not generally a good investment. They barely hold their value in my experience. 

A small house would be a better bet. When you’re eventually ready to buy. 

Another thing that strikes me is that your pay seems low for someone so articulate and who’s clearly well educated. Any chance of boosting your earnings? Investing in your skills might be a better investment right now than buying a (crap!) flat. 

SecondStar

Annisele said:

SecondStar said:

I don’t know where I want to live, or what I want to do, long term. For now, is it worth buying a cheap property while knowing it’s not a ‘forever home’, but that I need a roof over my head? Is buying in this type of situation the best option for a ‘roof over my head’?

I think that for now - as in, for right now, a week after you've split from your partner - it's a terrible idea to be making any long term plans at all.

You won't have your £14k of cash until you've sold the house, either to your ex or to somebody else, and you won't be doing that for a few months at least. Until you know who you're going to be selling to, you're not in a strong position to go making offers on flats even if you were absolutely certain you wanted to buy. As of right now, you don't even know if you're going to be in a chain or not. (It's something of a buyer's market right now where I am, which isn't NI. So that might not be a big issue. But you're still unlikely to be an attractive buyer while everything is up in the air. In a couple of months you might be a very attractive buyer indeed, but not right now.)

If your friend is able to put you up until June, I think you should take at least a couple of months of breathing space before even trying to decide.

I think I'd be leaning towards renting in your shoes - mostly because you don't sound sure you want to stay in the area - but the pets might make that extremely difficult.

Thank you for the input, I appreciate it.

I’m not running about booking viewings or making offers, I’m just a person who finds security and takes comfort in well-explored options, and so I’m research and opinion gathering.

It would be a couple of months to get the house ready for sale anyway, so I’ll probably be staying here, unless he comes to me on Friday and offers to move out to his parent’s house.

It’s not that I don’t want to stay in the area, but I also…don’t have anywhere else to be?

My job is here, but I could get transferred to Scotland or England. I have some friends here, but I also have some friends in Glasgow, and some friends near my hometown in the Midlands. The family I’d be closest to are in the Midlands, but we’re also not THAT close. My mum died 2 years ago, my dad has always been absent, and I have no siblings.

My pets are my family and my priority, and I know I would struggle with renting with them.

I do like living in Northern Ireland, and in my area, there are just mixed emotions in there, too!


I suppose when you say ‘an attractive buyer’, you mean one who has listed and accepted an offer on their current property; if not already sold and in rented with the cash waiting to buy?

SecondStar

Helenochka said:

As an animal lover I’m pleased and relieved that you’re taking your pet ownership responsibilities so seriously. 

Flats in Northern Ireland - especially crappy ones - are not generally a good investment. They barely hold their value in my experience. 

A small house would be a better bet. When you’re eventually ready to buy. 

Another thing that strikes me is that your pay seems low for someone so articulate and who’s clearly well educated. Any chance of boosting your earnings? Investing in your skills might be a better investment right now than buying a (crap!) flat. 

Thank you. I already have a 1:1 arts degree, and no time or money for any more study! My salary is 22.4k before tax - I work for the civil service, albeit currently on the lowest rung of the ladder. I’m in a good position for career progression, but obviously there’s no guarantees. It pays more than retail, and so I count my blessings!

I understand what you mean about flats in NI. I’ve been living here for almost 11 years now - the housing market in County Down is one of my special interests, and I’ve been actively following it for the last 6 years. No one particularly *wants* to live on a paramilitary estate.

It circles back around to my thread title pondering - everyone needs somewhere to live. I’ll admit, I’m not particularly interested in something being a money-making investment right now, I’m just weighing up which is the better option to get a roof over my head, and to sort my life out and pick up the pieces of myself over the next few years.



Perhaps I’m being too romantic (though it’s good to be optimistic, and think of your future, after a big break up, right??), but I can picture myself being perfectly happy and content in some small property (either a small 90k house, or a crappy 70k flat on a paramilitary estate!) because it’s my space even if it’s crappy, I don’t have to share it with anyone else, and I have my pets with me.

The cheaper it is, the more I can save to care for my pets in their current senior years, and the more I can put towards continuing therapy. Hopefully I’ll be promoted within the year, and maybe again within 3 years, at which point I’ll probably have lower outgoings (*senior* pets, after all), and can consider a more expensive property in a nicer area. Or move areas, if I have no more ties here.


I want to be free of him, and to put my energy towards myself and my pets.

mi-key

Have you double checked your figures to see how much would actually be left ? any ERC, agents charges, solicitors charges, moving costs etc... all eat into the equity  

SecondStar

mi-key said:

Have you double checked your figures to see how much would actually be left ? any ERC, agents charges, solicitors charges, moving costs etc... all eat into the equity  

Double, triple, quadruple… I’ve been running figures for over a year, and refining them in the last month.

If we sell for 115k that gives:
95k to pay off the mortgage
1k for the ERC
1.5k estate agent (1%)
1k solicitors selling costs

Leaving 16.5k, split 2 ways is £8,250 (alright, maybe you caught me with double checking the figures!)

Plus my 6k is £14,250.

By separating finances and splitting the bills in our jointly owned house until it sells, I’ll also be able to personally save £500 each month.

MovingForwards

Try not to think of 'only' having upto £3.5k in savings if you were to buy. 

In a perfect world everyone would have a year's wages spare in the bank when getting keys, in reality many of us have had a loss less than £1k and slowly built up savings.

It would be easier to consider renting or lodging for 6+ months, give yourself time to come to terms with what's happened and then decide. Having pets does make it harder. 

Move in to your friends, sort out the former property and have a think. 

I assume family are not able to help financially so you could buy your ex out or increase your buying power if that's what you decide?

Boat_to_Bolivia

This is just in my humble opinion, but paying a mortgage is always preferable to paying rent. 

I agree that you need some breathing space and having somewhere to stay until June gives you that.

I understand the need for an emergency fund, but sometimes that isn't practical. 

I bought because the rent was double what my mortgage payments would be. Yes I exhausted all my savings but in the long run I was better off.