FTB confused ...... continue to rent? or to buy?

swingjune

We have savings of GBP150k and currently renting a 4-bed bungalow @ GBP695 per month. Our rental is due for renewal in September. We have no kid and no debts.

We are looking at houses in a very desirable area and the asking price of a typical 3-bed is above GBP250k which we find it ridiculously high. These houses need some modernisation e.g. change hideous carpet and outdated kitchen.

We have a pre-approved mortgage of GBP150k (on OH's income only) from Halifax which is valid for 6 months.

Should we extend our rental for another 6 months and wait for drop in house prices :rolleyes: or try buying a house with a cheeky offer

PasturesNew

I'd wait. There's no rush and your deposit is growing every month as you add to it + the interest is grossing £900/month even if you've just stuck it in high interest bank accounts.

Just make sure your savings are safe (no more than £35k in any one banking organisation - if unsure follow the links from the top of the page and you'll find a grid of who own who)

You'll be able to pay cash in 3 years for the house you want.

epz_2

put it like this prices are falling 2.4% a month (that 6k a month in your price bracket), the cost of living is going up fast and there is serious talk about interest rates going up 2-3 times (0.75%).

hey its your call but one months fall will pay your rent for 6 months

Zammo

Can you see prices going up or staying level over the next year?

Rent !!!!!!.

IveSeenTheLight

Make sure you do your market re-search correctly.
You can view http://www.hbosplc.com/economy/inclu...TownsData3.xls to see how your town has faired in the last 20 years and during the last house price "crash"

You have to weigh up falling house prices and how far you think they will drop with mortgage / interest availability.

If you decide to rent for a little longer, you could have the option of moving to somewhere a little smaller to pay less rent and then you can save more.
I do understand that comfort can be decisive as well should you wish to stay in the 4 bed

Good Luck

P.S. Pastures New gave good advice about safegaurding your money in the bank.
Not sure about buying for cash in three years time, it may depend on what the market does and what you do with your savings but it may be possible, who knows

obsessed_saver

Just weigh up your rental cost vs your mortgage repayment interest for a similar property. You will have your answer. (Don't forget to also include the interest you are gaining on your £150k at the moment).

SquatNow

RENT!!!!!!

swingjune

Thank You so much for sharing your thoughts :beer:
Obsessed_saver, we will do the sum per your suggestion.

Our rental is in the same area, so we could monitor those houses everyday. We already saw 2 houses back to the market after the sales fell through.

We love the area and hubby could walk 20 mins to his workplace (no costly fuel expenses and great for health :T )

:A