Paralyzed by choice

dgerrard · 14 August 2018 at 8:30AM

I feel like I'm in a situation many would be envious of, so why is it causing me sleepless nights?

Situation

Wife and I married just under one year
Late 20s/Mid 30s
Make a combined £84k (£54k and 30k respectively)
I work from home for a technology firm, she's an office manager
Currently living in London, paying £1175 pm to rent a 1-bed flat

Have £38k in Savings:
£4k each in a LISA
Just over £7k each in Help to Buy ISAs with 2% interest (fully aware we can't cash these AND the LISAs out, just has a decent interest and will be moving it into LISAs once we can)
£4800 in a 3% interest savings account
She's got about £3500 in a minimal interest savings account
And we've got about £7500 in a joint savings account

We're looking for a 3-bed 2-bath semi-detached, end of terrace or detached, max budget £300k.

Variables

Because I can work from home, we could technically move anywhere. However, if we stay within commuting distance to London (within 1 hour on train is max for us), then my wife can keep her job when we move, which would make us much more secure. Otherwise, we COULD get a Help to Buy equity loan, and use the 5-year grace period for her to look for a new job wherever we go, but that puts a lot of pressure on my job. Firm is very successful but only about 6 years old. International company so more Brexit-proof than others, but not exactly the safest position in history.

Brexit with a capital B. I've heard both sides of it from different advisors. I've heard only a fool would wait to buy, because banks will be slamming the brakes on any new mortgages if we go out with no deal. I've heard only a fool would buy now, because the market will crash immediately afterwards and you could get the same house for half the price.

I stand to potentially be gifted around £150k when a relative sells their home next year. It's not something that is 100% guaranteed, but it is something that has been promised by someone who I trust implicitly.

There is a bold red line between places we want to live, and places we could realistically live. Our favourite place in the UK is Deal in Kent, and there are some houses we've seen that we love and are in our price range, but no jobs and crap travel links. Love Guildford, but it would mean buying a flat not a house, and we've already completely outgrown our one-bed, and are really looking for a house. Basically, everywhere we've looked, choices are: affordable, but no jobs or travel links. Or unaffordable, with jobs and travel links galore. We want decent links to Wales (wife's from there) and London (friends are mostly there), either commutable to London so the missus can keep her job, or decent enough local economy so she can find something new easily. Her skillset is very transferable, and anywhere with a moving economy she'll find something with little problem.

Sorry for the rant, has just been going around in my head for a long time.

Basically the question of this whole post is:

Do we try to buy now, or no?

If I potentially have this £150k coming, is it better to wait and use it as part of a massive deposit? Or do we buy now, and use it as leverage when it comes time to re-mortgage? Or use it to over-pay, making sure we get a mortgage with no overpay penalties up to a certain point?

With Brexit looming, do we hold fire or dive right in?

Pixie5740 · 14 August 2018 at 8:43AM

There's an entire section of the forum dedicated to Debating House Prices and the Economy. If you want to read people's views on Brexit and how they think it will impact the UK housing market I suggest you head over there.

jonnygee2 · 14 August 2018 at 9:47AM

On your situation, my opinion is that if you can afford to buy, and you are fairly sure you'll be settled in the same place for the next 8+ years or so, then buy. Buying will never be a risk free endeavour. So if you postpone because of risk, you will end up renting for the rest of your lives.

However, I would sort your personal lives out first. Choose where you want to live - and then set up camp there by renting nearby. Let your missus find a job nearby, get settled in, know the area, then buy a house. Don't just move somewhere because the house prices are cheaper!

max budget £300k.

Why? You can afford more on your combined income.

westernpromise · 14 August 2018 at 9:53AM

Nobody knows what effect Brexit will have, although personally, I think it's been fully priced in since June 2016. Leavers will insist it'll be fine and Remainers that it'll be catastrophic. If you think about it, they both have to, really.

What can be said is that you will be in a better position as a buyer with £190k in your pocket than with £38k. If you're looking for a £300k house with I presume a £262k loan (which is a very conservative mortgage multiple on £84k earnings), that's an 87% mortgage. Sellers will know that if the valuation survey comes back at £290k, suddenly you can't get your mortgage anymore, because you're at more than 90% LTV. So you're a slightly risky buyer versus someone who needs a mortgage of say £150k.

Prices in London are definitely falling at the moment as well, so in a year's time your position is likely to be better not worse. If you borrowed 4x your joint salaries and added your savings, you'd be on a budget of £375k, which could make quite a difference if you want a house. If you need to be handy for Wales you are better off west of London than in Kent, but of course that side is quite a lot dearer.

I wouldn't worry about replacing either of your jobs though. £50k and £34k are not exactly rare money in London.

getmore4less · 14 August 2018 at 9:55AM

I would forget all the economy stuff and focus on what you want to do next

You can't plan for the unknown so best to react when needed.

A few things
How big is the commute for the Mrs now?
If that increases that's a backward step when you work from home.

At some point you need to decide if you want to keep the London lifestyle, many once they move out soon get fed up commuting for regular social.

Why not move out of London and rent for 6 month to a year at a location you guess may be right for you.

I would focus on West and north west of London more tech jobs and easier for Wales.(A41 round to the A3)

if you cant give up London move back.

Leave the Kent coast for retirement.

Forget the £150k for now that can be for the next move up.

When you say London do you mean a particular bit of London?

davidwood681 · 14 August 2018 at 9:56AM

Pixie5740 wrote: »

There's an entire section of the forum dedicated to Debating House Prices and the Economy. If you want to read people's views on Brexit and how they think it will impact the UK housing market I suggest you head over there.

Is Brexit allowed to be discussed on that board?

It's been banned in discussion time

westernpromise · 14 August 2018 at 9:58AM

It's not really discussed as such. It's basically just Remainers and Leavers shouting "you're stupid scum and I hate you" at each other.

sal_III · 14 August 2018 at 10:02AM

300k for a 3-bed 2-bath semi-detached, end of terrace or detached in London isn't really possible nowadays, unless it's a abysmal area and the house is a heap. Anything within 1h commute from London is false economy in terms of cost, mortgage+train ticket(s) are more or less the same as mortgage in London. And with kids someday the commute will "kill" you. It's still worth it for more "rural" feel, but not as a cost saving.

Take a good look at the HTB equity loan. I was in a similar position to you, not being able to afford a decent place, despite high income and absolutely refusing to trow money at cramped Victorian terrace and the like. At the end decided to get a spacious flat in a great area with HTB equity loan, so we can at least stop wasting money on rent for the next 5-6 years.

Pixie5740 · 14 August 2018 at 11:19AM

I never said anything about the quality of the Brexit discussions.

hazyjo · 14 August 2018 at 11:22AM

If I were in your shoes, my budget would be more like £385k. Add to that the £150k, that gives you over £530k.

I would not in a million years be buying something for up to £300k.

I would wait a year. Nothing to do with Brexit, just because a £500k+ budget is absolutely no comparison to a £300k one. Even if you keep it at £300k and wait for the £150k, £450k is way better than £300k. It will buy you a hovel.

I have a fairly long commute, but don't mind it at all. In fact, much prefer it to my old commute from Chingford.

One year is naff all in this market. It's not exactly shooting up, apart maybe from the first time buyer sort of places (which is exactly what you'd end up looking at and possibly overspending). I would be looking for a house in a decent area, not a million miles from London.

[Deleted User] · 14 August 2018 at 11:23AM

There are plenty of other areas in Kent with quick transport into London, where property prices aren't too bad. Just check out areas on the high speed line and see if any properties/areas appeal. I live in Gravesend, 16 mins to Kings Cross St Pancras.

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Paralyzed by choice

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