Rent or Buy?

[soxboy]

Looking at getting a place with GF, however the houses within our current budget don't fill me with enthusiasm so I'm not too keen to rush into buying anything.

The plan is to buy something and have it for 1-2 years then move on to something better after that.

I've suggested that rather than buy somewhere straight away we rent for that time, not because I don't want to rush into anything but because having done my sums I've worked out that it will cost £8000 in fees alone just to buy and sell a house and we are in a stagnant, if not declining, market. Rent then find somewhere we like rather than be lumbered with what I consider to be a compromise which may hold up moving somewhere better. This has met with as much enthusiasm as if I had told her I had a dose.

So, rent for 18 months or buy?

[soxboy]

Not sure about the dumping idea!

Unfortunately my flat is in wrong location (and being rented out), her flat is in right location but tiny.

[soxboy]

selmahoos said:

G'kar said:

[
Aren't you a landlord?

Yes, so is the OP. But I don't rent the house I live in.

Indeed I am, I have two flats and some commercial stuff. I've owned for years and didn't think I'd be asking the question so it does seem strange looking at it this way.

Sure mortgage payments go towards owning a little more of your asset, my question surrounds the fact that in a stagnant and possibly further declining market is it worth sticking money into it over a relatively short period when c5% of the cost will go in fees to agents,mortgage cos, solicitors and stamp duty.

Edited by soxboy on Monday 16th March 22:49

[soxboy]

For a £200k property you are looking at purchase costs of £2k stamp duty, £750 legals, £350 survey & £900 mortgage fee = say £4k. To sell in 18 months will pay 1.5% sales fee, £400 HIP, £750 legals = £4150, so without any mortgage payments thats over £8k.

If rent is £700 pcm that's a year's rent.

[soxboy]

Jasandjules said:

Why would you want to move in 1-2 years?

I am confused (easily done) but isn't it better to live in the GF's flat for two years and save heavily (or keep an eye on the market and as soon as it starts to rise buy) OR live in the GFs house until the notice period of the tenants in your place is up then move into your place and save and/or buy when the market is right?

Indeed, all very valid points. These are however out of the window as we are dealing with a woman's logic.

[soxboy]

BERGS2 said:

[we were looking at a similar situation but moving to a £500k house -

when the stamp duty alone is at £15k it makes simple sense for us to rent for a year.

Yes - i know it will still need paying when we do buy, but as the OP point out in a stagnant/declining market its not like you're losing out on capital appreciation....

Plus we get to 'test drive' our area of choice..

looks like these quite a disparity between rental yields and mortgage payments where were looking too.....(Elmbridge, Surrey)

for example this place
was up at over £600k initially think it sold for just shy of £500k and is now available to rent at £1700.....

That's exactly what got me thinking. It was this place

On market for £399,500.

Edited by soxboy on Tuesday 17th March 13:08