Rent for a year before buying again

barneyfish_2

Hi - wondered if I could ask what peoples thoughts on my situation are.  I've got a 2 bed flat in London , never really settled in it, and now after 5 years here really want to move out of it for various reasons. I want to try living further out of London, and going to a wfh model at work - which i can, 3 days in office 2 out.  I'm thinking of renting for a year (would do 3-6 months but doubt I'd find somewhere), to see if this works for me being outside of London, after a year I'll look to buy again. I dont want to rent my place out, as regardless of what happens I dont want to come back here. I could buy somewhere outside London but dont want to be committed for another 5 years if I bought in case it doesnt work out for me. Everyone's telling me its daft going back to renting but I'm think it allows me to workout whats going to work best for me before I make a commitment.  Wondered what people thought, as only one person i've spoken to seems to think it makes sense.

RHemmings

It can make you a good prospect for a seller if you are in rented and are on a rolling contract or similar. Particularly if you have a lot of equity in your flat which could possibly make you a cash buyer outside of London. 

You would have the risk that house prices rise faster than your savings grow. Again, depending on the amount of equity you have in your flat, and therefore your mortgage costs (if any), and transport into London, your expenses could go up, which could mean that your ability to save goes down. 

While I'm not suggesting that you move there, in my head I use Milton Keynes as an example of a city outside London where (last time I looked) commuting to London seems reasonably simple and comparatively inexpensive compared to other possible locations. And, house prices (for buying) seem reasonable, again compared to other potential commuter locations. Using MK as a yardstick, then a two bed flat will probably cost you about £1100pcm. And it can easily be more for 'better' flats, in various ways. Higher than I expected, but I guess there is more of a 'London effect' on rentals compared to purchase. Maybe. 

I'm just a random person on the internet, but I think it would help us think about your situation if we knew things such as:

1] Equity in your flat
2] Mortgage outgoings (if any)
3] Appetite for risk
4a] Where you would consider living
4b] Acceptable commute time/distance to London

barneyfish_2

Hi - thanks for your response,  I've got some inheritance coming in the next year, and with savings and ISA's etc.  Ill have nearly 450k by end of 2025, if i manage to sell my flat, which i know is no guarantee.  Its big with a huge garden, and if i got what i paid for it it in 2019, would get me to the figure of 450 with everything else.  Milton Keynes was actually somewhere i looked at, but also Oxted in the south, Tunbridge etc.  I know house prices are probably only going one way, but my thoughts are ill potentially be able to buy outside of London outright, but want to be sure its going to work for me first.  I havent enjoyed living in this flat since i moved in and dont want to go through it again, so want to be alot more sure im happy living somewhere - i know there;s no guarantee's

RHemmings

With 450k (but hopefully more), you'll be able to buy extremely easily in MK. I've had a look at Oxted, and there are some 2bed and more properties less than £450k there, but not a large amount. I was surprised how quickly the prices rose to £450k. Only 11 2bed or more properties in Oxted less than that. It looks as if rental is going to be at  about £1500 or more, and easily much more depending on what you want. 

£325k in 'near to' Oxted is getting you this:



When I first lived in London I used to ride the Caterham train. Oxted looks to me to be an easy commute. Particularly if your workplace is more South than North London. 

I was surprised how affordable Tunbridge Wells is. The commute is a bit longer, but for 3 days a week I personally would find it fine. There are a lot of retirement complexes, but there are 2 bed flats from about £200k. And, plenty of 2 bed houses (if that's enough for you) in the £300-400k range. Rent of a 2 bed flat is about £1300 or (mostly) more. 

Your money will go further north rather than south, but if it's only one year you're out of ownership, that's less risk than a longer term wait. Also, if MK is a possibility, then if you did find yourself overtaken by unexpected (for me anyhow) house price inflation, you're not going to be priced out of buying outright in MK. Even if it happens in Oxted and Tunbridge. 

Personally I think your plan looks fine. Even better if your costs will be such that you can still save while renting like that. It's quite common on here that people will be advised to rent first if they are moving somewhere to buy. 

Mr.Generous

As a landlord my last 2 rental properties had 100+ and 50+ enquiries to rent I'd say just a word of caution - It might not be easy to rent somewhere.

barneyfish_2

Fairpoint - do you mind me asking where abouts your properties are ? 

SandyShores

We did the sell, rent for a while then re-buy again. 

Negatives were:

• missing our own home - we'd lived there a while and had renovated it top to bottom; 
• having to get rid of a load of our stuff/rent a storage unit because it wouldn't fit; 
• the rentals just always seemed to have something missing (including storage); 
• not feeling quite settled, and possibly not as secure - there is something about having your own place;
• house prices rose and lending criteria changed so we ended up renting for longer than planned;
• and there was just something that felt odd to me (having been a homeowner for so long) about not being able to tick the 'homeowner' box on forms. 

The positives were:

• being able to live in lovely houses/locations without having to commit; 
• having a break from house renovations (and any costly repairs); 
• when you get back on the property ladder again its so easy not having to deal with a sale at the same time; 
• it makes you do a declutter, which is great when you move into your new home;
• you can have a cross over period with the sale/rental and then the rental/purchase - we moved ourselves gradually into our new home purchase over two weeks - gave us a chance to sort through/sell stuff (although there are extra costs involved with this it was much less stressful than doing it on one day).

Everyone's experiences are probably slightly different, but those were some of the things I remember.  I felt the same as you about not renting our old house out - I could regret it because of the house price rises, but I didn't want the stress and it made moving into our lovely new home so much easier.

Albermarle

 I want to try living further out of London, 

This is a very large and diverse area, so you could move to many different types of location, at varying distances from London. Personally I would spend quite some time scouting around potential locations, before doing anything. Maybe even staying in a hotel/airbnb for a couple of days/nights.

For example you mention MK, which is a small modern city quite some distance from London. What about a smaller town/big village somewhere nearer to the M25. Prices will normally still be significantly cheaper than most of London. Or down by the coast in Kent/Sussex/Hampshire. Or North Downs. Or an older city/big town like Reading or Guildford or Maidstone or St Albans. Or go more East for generally cheaper property.

All of these places will be 'further out of London' but will all be quite different.

Mr.Generous

barneyfish_2 said:

Fairpoint - do you mind me asking where abouts your properties are ? 

Warrington (Cheshire), Leigh (Greater Manchester) and  Haydock (Merseyside). The rental market in the entire North West is crazy, and looking at the industry stuff I get not much different anywhere else in the UK.

Albermarle

Mr.Generous said:

barneyfish_2 said:

Fairpoint - do you mind me asking where abouts your properties are ? 

Warrington (Cheshire), Leigh (Greater Manchester) and  Haydock (Merseyside). The rental market in the entire North West is crazy, and looking at the industry stuff I get not much different anywhere else in the UK.

Although according to this, the London rental market has cooled.
London rents drop by 10 per cent as landlords under pressure to review prices | Evening Standard

Zerforax

Your work in office/home might be 3-2 days now but have you thought about what it might look like in 1-3-5 years time? There seems to be a moving trend towards more time in the office. Is there a risk you could end up expected to be in 5 days a week again?