House buying and redundancy

RedFraggle

In addition to service charges ground rent is also a factor. With common hold set to affect new builds lease terms on older flats will become a bigger factor perhaps.

We are lucky, our flat is 20 years old, was built in 2020 and is share of freehold in a block of 42 so no ground rent. I'm on the board of directors and our service charge sits at £92pcm versus a value of £250k.

Those lease terms were pivotal to my choice 3 years ago to buy this rather than a smaller 2 bed house at a similar price.

stevat

The asking price is the market price or even slightly above, although I wouldn't be surprised if they are willing to move by quite a bit. In all our dealings so far they've been very reasonable and very good landlords in general.

If we buy it, the mortgage payments plus service charges would roughly equal our current rent.

pinkshoes

https://forums.moneysavingexpert.com/discussion/comment/82078538#Comment_82078538

If you eventually want a two bed, then I wouldn't even entertain the idea of buying a one bed.

I'd start looking for a two bed, but you will have to base the mortgage off one salary.

stevat

Thanks all for your views on this, it's nice to be able to get some perspective from the outside

SarahB16

https://forums.moneysavingexpert.com/discussion/comment/82080294#Comment_82080294

Please do let us know what you decide to do and I hope the job situation works out well for you both.

TroubledTarts

https://forums.moneysavingexpert.com/discussion/comment/82078538#Comment_82078538

With the benefit of paying off some of the mortgage each month by repayment mortgage and therefore hopefully building up equity.

Herzlos

I think it largely depends on how long you're likely to be in the bought 1-bed waiting to buy the 2-bed and what you plan to do if you don't buy the 1-bed.

If you could get into the 2-bed you want now, or within a year or so and have somewhere you can stay in the mean time, then it'd make sense to jump straight to that.

If you were planning on waiting over a year and saving up, and are ok staying in the 1-bed for that time, buying may make more sense. There's minimal costs in doing so, because what you'd pay in legal fees will be saved by not having to move, and instead of paying rent you'd be building up equity which you can use as a deposit later.
Plus whilst 1-beds may sell slower these days, the price is still higher per room (i.e. a 2 bed costs maybe 1.5x a 1-bed, rather than 2x).

If you're facing redundancy and needing to be careful, then if you get a good price on the 1-bed it's probably the lower risk approach because even if you can't get into the 2-bed you've still got somewhere stable to live whilst you build up funds.