To buy or not to buy?

snacksarecompulsory

Hoenir said:

When you retire would you consider moving to a cheaper area? 

Yes, that's a possibility 

snacksarecompulsory

SarahB16 said:

snacksarecompulsory said:

Hi, I earn a modest income and am lucky enough to rent a decent sized house in a nice place via a housing association.  No quibbles there.  I have an inheritance quietly sitting earning me a small amount of extra income.  I'm at a point where I figure I need to do something about this money.  I retire in about 10yrs, never been in a position to be able to buy a house prior to this.  The money could potentially buy a very modest home in a different area (high costs here) outright and I would save the money I pay on rent.  However, there is a lot of safety surrounding being in a housing association house, with repairs covered, I've also lived here a very long time and have connections and a job tied to the area.  I literally cannot decide what is best.  Health for me and partner may be an issue long term and I am the only one earning so it all falls to me.  Need some more experienced people than me to guide me here.
Also, my current earnings are so modest that taking on a small mortgage is out of the question - it's buy outright or not at all.  Thoughts please?  TIA.

Based on the information you have shared to date my current thinking is you may very well be better staying renting from the housing association.  

If, in the future, the stairs were to be difficult for you and you wished the housing association to place you in more suitable accommodation do they have quite a lot of suitable accommodation in the area?  This would be another factor in favour of staying with the housing association.  

I'm not sure whose name the housing association house is in, i.e. just your name or you and your partner's name?  I'm not quite sure what the situation will be for your partner though if you were to pass before your partner.   

If you do decide to continue to rent from the housing association I would check you can continue to afford the rent but I  presume if not you would just downsize to smaller accommodation offered by the housing association.  They will know accommodating you/helping you move will free up a house so they will look to accommodate you quite quickly I would think as soon as suitable accommodation was available for you.  

You say your earnings are modest and perhaps in retirement you may get help with your housing costs.  I wouldn't take on the purchase of a house with only modest earnings as you run the risk that you would not be able to fund the cost of repairs.  

In summary, whilst I would normally suggest buying I do think in your circumstances considering the above it may be that continuing to rent would be the better option for you and having friends/connections nearby as you get older is something quite often overlooked as a consideration and is even more important as you get older. 

Hi, I would assume the HA would adapt if we needed, say, a chairlift or similar.  Unsure about capacity to move as would assume my savings would prevent me from being considered 'in need' of another HA house?  I need to explore this option.

RHemmings

I was in your position, almost exactly assuming you're 57. I bought. I don't regret it and would do the same again.

Myci85

This might be an unpopular opinion, but if you are in a position you can afford to buy a property outright, surely that would be the right thing to do as there is a massive shortage of HA properties and this would free one up for a family who may be currently homeless and living in temporary accommodation. 

FlorayG

Difficult. If you are 100% sure your rental property is secure for as long as you want it, I would stay there and enjoy your money when you retire ( keeping back enough for the rent, obviously)
If you're not 100% sure of security where you are then equally 100% buy your own house

BungalowBel

Will you be able to afford the rent once you have retired?

snacksarecompulsory

Unsure at this point.  My partner and I will have full pension, I have a small amount of personal pension, and a decent work pension.  It may enough for rent and bills but perhaps not for fun stuff...

Bigphil1474

If you've got a lump sum in the bank though, you may be able to pay the rent from interest and some capital and enjoy your pension for fun stuff, or vice versa. Think it's as long as it is short. If you bought a house, you'd have no mortgage/rent to pay and can use your pension for fun stuff, but you'd still have to find the money if the boiler goes kaput.

EssexHebridean

Myci85 said:

This might be an unpopular opinion, but if you are in a position you can afford to buy a property outright, surely that would be the right thing to do as there is a massive shortage of HA properties and this would free one up for a family who may be currently homeless and living in temporary accommodation. 

It's not really our place to talk about the "right" thing to do - and in any event we don't know what the right thing would be for the OP - allowing that we have no idea about their pension provisions in relation to their other outgoings, the state of their and their partners health, and a whole host of other factors. This question is about the financial aspects for the OP IMO - not about the moralities, whatever we perceive those to be. 

ReadingTim

EssexHebridean said:

It's not really our place to talk about the "right" thing to do - and in any event we don't know what the right thing would be for the OP - allowing that we have no idea about their pension provisions in relation to their other outgoings, the state of their and their partners health, and a whole host of other factors. This question is about the financial aspects for the OP IMO - not about the moralities, whatever we perceive those to be. 

Well, yes and no.  Many Housing Associations have eligibility criteria relating to income and savings, and whilst the OP's income might be limited, their savings (AKA inheritance) sounds reasonably significant.  Therefore they may wish to ascertain if their HA has any eligibility criteria and what action the HA might take for people who no longer qualify- they assume their tenancy is secure, but it might not be.  It may therefore be prudent to buy now whilst one has the luxury of time, than need to find somewhere ASAP when under threat of imminent eviction.