would you buy just to get on the ladder?

Sarah1Mitty2

Sarahspangles said:

Around 1990 my OH’s family were like a stuck record ‘renting is dead money’ and ‘house prices can only go up’ and ‘if you don’t get into the ladder now you’ll be renting for life’.

So we bought a flat. Then we went into recession, jobs changed as a result, and we ended up selling after two years. The value of the flat fell by only a small amount, but we lost the money we spent on the cost of buying and only avoided losing money on the cost of sale because a new employer paid relocation expenses.  Oh, and although we had a fixed rate mortgage this wasn’t cheaper than rent and we were very, very lucky with our timing as we managed to avoid an early repayment charge or going onto the SVR which kept going up.

‘Frictional costs’ has been part of my vocabulary ever since.

Not good, imagine buying a flat now though, how much worse it could get?

Sarah1Mitty2

ReadingTim said:

Sarah1Mitty2 said:

A market going down or sideways isn`t really a ladder though is it? Buying a flat or a BTL is probably a bad idea for many reasons, cash in the bank is probably your best bet just now, money market accounts, high interest savings accounts and some premium bonds is my choice at the moment.

Whatever interest you might to earn there is likely to be wiped out by the rent rises landlords are likely to impose on you whilst you pay to live in their property rather than your own.

Smart landlords won`t price themselves out of the market.

Martico

Sarah1Mitty2 said:

ReadingTim said:

Sarah1Mitty2 said:

A market going down or sideways isn`t really a ladder though is it? Buying a flat or a BTL is probably a bad idea for many reasons, cash in the bank is probably your best bet just now, money market accounts, high interest savings accounts and some premium bonds is my choice at the moment.

Whatever interest you might to earn there is likely to be wiped out by the rent rises landlords are likely to impose on you whilst you pay to live in their property rather than your own.

Smart landlords won`t price themselves out of the market.

But the market is dictating higher interest costs for landlords. You can't have it both ways. Rental costs are rising

jimbog

Sarah1Mitty2 said:

Sarahspangles said:

Around 1990 my OH’s family were like a stuck record ‘renting is dead money’ and ‘house prices can only go up’ and ‘if you don’t get into the ladder now you’ll be renting for life’.

So we bought a flat. Then we went into recession, jobs changed as a result, and we ended up selling after two years. The value of the flat fell by only a small amount, but we lost the money we spent on the cost of buying and only avoided losing money on the cost of sale because a new employer paid relocation expenses.  Oh, and although we had a fixed rate mortgage this wasn’t cheaper than rent and we were very, very lucky with our timing as we managed to avoid an early repayment charge or going onto the SVR which kept going up.

‘Frictional costs’ has been part of my vocabulary ever since.

Not good, imagine buying a flat now though, how much worse it could get?

Nor renting to be fair
https://www.bbc.co.uk/news/business-65103937

[Deleted User]

Just beware that the ladder is kinda broken for a lot of people. Around here an additional bedroom, really more of a cupboard, adds £100k. The gap is too big for a lot of people, and is getting wider, and low interest rates are long gone.

jonnydeppiwish!

When you’re on a set budget, I don’t think that there is even a small chance that’ll you find your perfect house, just because they’ll always be one better.
For us, location and financial stability were key. Once in, you can start to enjoy the house and change it to suit imo

lookstraightahead

Glad you're looking properly at your options. 

Owning a house really isn't everything. And if the timing isn't right it can be a ball and chain round your ankles (especially if you have a lifestyle that isn't house-centric). 

Renting gives you flexibility but less security, but as you already have money as a back up, there's no risk in renting, as you can always buy if you find yourselves unable to find somewhere to rent etc.

Also you'll be in a better buying position with no house to sell and will make money back on that, when you feel the time is right.

I just don't think renting is for everyone. It's not always the money, but just how things are 'done' in this country. We place so much emphasis on 'home ownership' when there are so many other important things in life.

I bought too young due to nagging that you had to get on the housing ladder. Biggest mistake of my life as my life wasn't linear. I know people who bought 30 years ago who have loads of equity but they've never moved on, not changed jobs, etc. my life wasn't like that 🤣.

MultiFuelBurner

I fear the rental system is broken.

For anyone that can get on the ladder now whilst prices have dipped they should and buy whatever they can imo.

The future for a number of landlords is unclear. There is a great proportion of rental stock at EPC grade E potentially needed upgrading to grade C by 2025(this is not law yet) investment will disappear and some landlords will take the opportunity to sell up and get out of the renting business. I personally forsee a severe decline in the amount of rental stock.

Anyone pushing the rent life and all the positives I wonder if they have considered the above.

[Deleted User]

MultiFuelBurner said:

I fear the rental system is broken.

For anyone that can get on the ladder now whilst prices have dipped they should and buy whatever they can imo.

The future for a number of landlords is unclear. There is a great proportion of rental stock at EPC grade E potentially needed upgrading to grade C by 2025(this is not law yet) investment will disappear and some landlords will take the opportunity to sell up and get out of the renting business. I personally forsee a severe decline in the amount of rental stock.

Anyone pushing the rent life and all the positives I wonder if they have considered the above.

Might be better to hold on. A lot of landlords have sold up due to interest rates, and the EPC thing should force even more out. That will increase the supply of property, even if a lot of it needs extensive renovation to bring it up to a liveable standard.

The rental system is broken, but getting rid of no-fault evictions (Section 21) should help provide much needed stability for renters. And push more landlords out of the market.

Now is a good time to be making low offers on former rental properties. Landlords are keen to get out of the market, sometimes desperate.

TheJP

I would say options 1 & 2 are common for FTBs, i bought my first house later in life and had a good deposit, income etc so we skipped this phase but if i had to then yes 1 & 2 would have been a reality.