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Hi
I'm looking at moving in with my girlfriend and I have been doing a little reading on the internet about the options of renting or buying - we are both currently living with parents.
Does anyone have any experience or advice to give about renting or buying?
Thanks
Dan
I'm looking at moving in with my girlfriend and I have been doing a little reading on the internet about the options of renting or buying - we are both currently living with parents.
Does anyone have any experience or advice to give about renting or buying?
Thanks
Dan
if you can afford it i'd buy. get yourself in somewhere with plenty of potential and decorate it it'll cost more to get a mortgage etc but atleast you'll have the value of the house, whereas renting you have nothing when you move out.
wish my girlfriend wanted to move in with me , I could do with splitting the mortgage!! still looking for a lodger but i dont think anyone wants to live in my neck of the woods!
wish my girlfriend wanted to move in with me , I could do with splitting the mortgage!! still looking for a lodger but i dont think anyone wants to live in my neck of the woods!
In reply to Richard Carter: buy!
In reply to CJD:
Sad thing is that it never looks like the right time to buy.
The right time was 10 years ago
> (In reply to Daniel Duerden)
>
> it doesn't look like the best time to be buying at the mo...
>
> it doesn't look like the best time to be buying at the mo...
Sad thing is that it never looks like the right time to buy.
The right time was 10 years ago
In reply to The Lemming:
okay, let me rephrase - the market looks *particularly* shaky at the moment. Apparently repossessions are on the up.
<caveat: I rent, so I'm a bit clueless apart from what I read in the news>
okay, let me rephrase - the market looks *particularly* shaky at the moment. Apparently repossessions are on the up.
<caveat: I rent, so I'm a bit clueless apart from what I read in the news>
In reply to CJD:
generally buy if in it for the long term, rent for the short term. given you're talking about moving in with the girlfriend for the first time renting would seem wise for a bit as the downside of being caught in a shared mortgage in negative equity with an ex would be massive.
generally buy if in it for the long term, rent for the short term. given you're talking about moving in with the girlfriend for the first time renting would seem wise for a bit as the downside of being caught in a shared mortgage in negative equity with an ex would be massive.
In reply to Daniel Duerden: rent until the bubble bursts
In reply to erikb56:
yeah, that, and woolsack's comments, are the sort of things I'm thinking of. I know you *can* get out of shared mortgages but it could all be rather messy.
yeah, that, and woolsack's comments, are the sort of things I'm thinking of. I know you *can* get out of shared mortgages but it could all be rather messy.
In reply to CJD: I think Buy, but then we bought. Depends on the area. But my mortgage is £620, and our rent in Glasgow 2 years ago was £600, so we lost 7k a year while renting, so far our house has increased by around 20k in a year, but we live in a good area for buying.
I'm not sure the market will crash, it will slow down, but I'm not sure we'll see a crash.
I'm not sure the market will crash, it will slow down, but I'm not sure we'll see a crash.
In reply to Daniel Duerden:
My father in law has made many many millions from property is buying very little at the moment, make of that what you will.
My father in law has made many many millions from property is buying very little at the moment, make of that what you will.
In reply to Daniel Duerden: Rent while you save a good deposit. Don't necessarily view it as "wasted money" in that respect as it'll form part of a 30-odd year property investment strategy
In reply to Mooncat:
Your father in law is in it to make money, if he had to either rent a property, or buy one to live in, ask him what he would do then.
If the OP can afford to buy on his own then he should, unless he expects to have to move to another part of the country for work. Shared mortgage, get married first then both people are liable for it and one cannot just walk away.
Your father in law is in it to make money, if he had to either rent a property, or buy one to live in, ask him what he would do then.
If the OP can afford to buy on his own then he should, unless he expects to have to move to another part of the country for work. Shared mortgage, get married first then both people are liable for it and one cannot just walk away.
In reply to sutty:
Absolutely, definitely rent for now, obviously you'd need a crystal ball to be 100% sure, but he generally gets it pretty much spot on.
The tricky bit is buying at the right time, he always tells me to buy when I think the price is right rather than waiting for things to bottom because things can change so quickly.
Absolutely, definitely rent for now, obviously you'd need a crystal ball to be 100% sure, but he generally gets it pretty much spot on.
The tricky bit is buying at the right time, he always tells me to buy when I think the price is right rather than waiting for things to bottom because things can change so quickly.
In reply to Daniel Duerden: It depends where you are, and how much you can afford. If you can buy for a similar (or even slightly higher) monthly payment, if your job situation's stable then I'd buy - but don't forget if you own it you've got to fix it so your outgoings can be higher.
You'll see some localised negative HPI but you won't see a 'crash' anytime soon - interest rates are historically low, and may well have peaked, there's still a major shortage of housing in the UK and unemployment is low, so despite the doom and gloom mongers I think you'll still see house prices increasing steadily.
You'll see some localised negative HPI but you won't see a 'crash' anytime soon - interest rates are historically low, and may well have peaked, there's still a major shortage of housing in the UK and unemployment is low, so despite the doom and gloom mongers I think you'll still see house prices increasing steadily.
In reply to andy:
Another way to look at it is to see how much it would cost to rent a place. If you bought a place for the same money as rent then had to sell it in a year for say 5k less than you paid for it you may still be in pocket taking into consideration the rent you would have paid.
Any comments on that?
Another way to look at it is to see how much it would cost to rent a place. If you bought a place for the same money as rent then had to sell it in a year for say 5k less than you paid for it you may still be in pocket taking into consideration the rent you would have paid.
Any comments on that?
In reply to sutty: I think the costs of buying would mean that if you think you'll have top sell in the first year or two woukd mean renting would be better - stamp duty, solicitor's costs, surveys - you can reckon on paying something over 2 grand for a £130k place - as well as any arangement fees on your mortgage (and of course the mortgage exit fee, which will by nw have been renamed to ensure you can't claim it back!).
In reply to Daniel Duerden: Rent! It will be cheaper when you split up!
In reply to andy: In some areas there's a shedload of former student lets coming onto the market as students reject scruffy old houses in favour of large new student villages created by very forward thinking developers.
In reply to andy:
That is the sort of information I was after, for the OP to see what was involved.
I thought exit fees were now outlawed unless detailed in the original document? Mine seems to have dropped a lot in the last six months when I asked about it and queried it.
That is the sort of information I was after, for the OP to see what was involved.
I thought exit fees were now outlawed unless detailed in the original document? Mine seems to have dropped a lot in the last six months when I asked about it and queried it.
In reply to Daniel Duerden:
Get married ( its easy to get divorced the days eg Henry) and ask both sets of parents for a deposit on a house instead of a fancy wedding.
You'll get the house kitted out by closes friends who use your wedding list, but have the wedding at a crag, minimsing the cost.
Erm, I can rent you house if you really want one, its in the Midlands
Get married ( its easy to get divorced the days eg Henry) and ask both sets of parents for a deposit on a house instead of a fancy wedding.
You'll get the house kitted out by closes friends who use your wedding list, but have the wedding at a crag, minimsing the cost.
Erm, I can rent you house if you really want one, its in the Midlands
In reply to sutty: The original exit fees were stopped when the FSA said they expected lenders to charge what was in the roginal contract - which is now what you'll pay - however most lenders have simply changed the name and made it a "core term" (ie part of the price of the product as opposed to an admin fee) so for new customers whilst it won't increase during the life of the mortgage it'll still be up to £300 to consider when you close the mortgage down.
It's really good to hear peoples experiences and advice.
thanks
Dan
thanks
Dan
In reply to Daniel Duerden: i cant believe you would even consider buying somewhere jointly with someone you have never lived with before
rent with your bird for a year at least, and then decide
rent with your bird for a year at least, and then decide
In reply to Daniel Duerden: If you have not lived together before, I think you would be a fool to buy a house at this stage in your relationship. Living with a partner is a big jump in a relationship and the last thing you both need is the stress of buying a house when you also have to worry about why you don't put your dirty socks in the laundry basket and she always leaves her hair dryer out.
My first "proper" girlfriend and I just didn't get on when we moved in together and split up as a result. Having to sort out a house in such a case must be an absolute nightmare.
Rent somewhere for 6 months - 1 year and if you are getting on like a house on fire, you will have the confidence to buy somewhere.
My first "proper" girlfriend and I just didn't get on when we moved in together and split up as a result. Having to sort out a house in such a case must be an absolute nightmare.
Rent somewhere for 6 months - 1 year and if you are getting on like a house on fire, you will have the confidence to buy somewhere.
In reply to fxceltic: Erm, millions of people did it in the past, most of our parents would have.
But I suppose that was after marriage. I do agree with you and Jon on the whole though that in this case it may be better to rent.
But I suppose that was after marriage. I do agree with you and Jon on the whole though that in this case it may be better to rent.
In reply to IainRUK:
Have to disagree with you on that one
'It demonstrates a lack of commitment to one another.' If you are renting with a view that the relationship ' might not work out, why rent with someone whom you dont love or want to *be* with.
I have read books on relationships. Very interesting ones, there is a specific one, that states , many relationships fail exactly because, neither party is committed.That living with one another before you marry is a mistake. Its a controvertial book, but makes *some* valid points.
Written by a Christian, not that I'm a follower though.
Have to disagree with you on that one
'It demonstrates a lack of commitment to one another.' If you are renting with a view that the relationship ' might not work out, why rent with someone whom you dont love or want to *be* with.
I have read books on relationships. Very interesting ones, there is a specific one, that states , many relationships fail exactly because, neither party is committed.That living with one another before you marry is a mistake. Its a controvertial book, but makes *some* valid points.
Written by a Christian, not that I'm a follower though.
In reply to Daniel Duerden:
My opinion a few days ago. Still my opinion.
http://www.ukclimbing.com/forums/t.php?t=258498
My opinion a few days ago. Still my opinion.
http://www.ukclimbing.com/forums/t.php?t=258498
In reply to tobyfk: Good point and still valid. A few sunny days of calm don't remove the problems
In reply to Richard Carter:
The comparative amount you'd have when you moved out would be: profit/loss on sale price vs purchase price - (the amount your mortgage interest cost more than equivalent rent x the number of months you lived there) - redecoration costs - interest you could have earned on the money spent on redecoration - legal and agency fees - stamp duty
There have been plenty of periods over history in which the answer would have been negative. 1990-1994 for instance.
> if you can afford it i'd buy. get yourself in somewhere with plenty of potential and decorate it it'll cost more to get a mortgage etc but atleast you'll have the value of the house, whereas renting you have nothing when you move out.
The comparative amount you'd have when you moved out would be: profit/loss on sale price vs purchase price - (the amount your mortgage interest cost more than equivalent rent x the number of months you lived there) - redecoration costs - interest you could have earned on the money spent on redecoration - legal and agency fees - stamp duty
There have been plenty of periods over history in which the answer would have been negative. 1990-1994 for instance.
In reply to Daniel Duerden: As you've never lived together i'd say "rent" for a year or 2- you really dont want to get into a £120k joint morgage then find you cant stand being together so much of the time in 2 months!
However, long term renting is bad. You cant (usually) decorate, you get paranoid about damage to the house, and you get nothing back for the £whatever you spend each month. At least with a morgage you get a tiny % of a house every month and you are free to knock holes in the walls all you want!
However, long term renting is bad. You cant (usually) decorate, you get paranoid about damage to the house, and you get nothing back for the £whatever you spend each month. At least with a morgage you get a tiny % of a house every month and you are free to knock holes in the walls all you want!
In reply to ceri:
> At least with a morgage you get a tiny % of a house every month
Only with a repayment mortgage. Most people just pay the mortgage interest these days. The notion that mortgage interest isn't wasted, whilst rent is, is a classic financial fallacy.In reply to tobyfk: most people?? most people - where did this assumption come from - i certainly pay back on it all and not just interest. (well ok so it's only a small amount each month - but such is having a mortgage in it's early stages).
In reply to gingerdave13: I think for first time buyers nowadays it is very common to have interest only mortgages. This means that the financial advantage of buying a house relies soley on house price increases. In effect you should view your deposit as the investment and mortgage payments as 'rent'. If the house price increases are less than what you expect to get through other investments then its arguably not worth it. This presuposes that you will stick to a interest only mortgage.
Otherwise buying houses has the advantage of being able to decorate and modify them and have a bigger sense of belonging. They do seem to tie you down and limit your options even if only psycologically.
Otherwise buying houses has the advantage of being able to decorate and modify them and have a bigger sense of belonging. They do seem to tie you down and limit your options even if only psycologically.
In reply to gingerdave13:
A quick google didn't throw up much more than the proportion of interest-only mortgages being "substantial" and "growing". To some extent, the difference between repaying and not repaying is only a psychological one. As long as you are saving the amount you would have otherwise repaid. In fact, someone who struggles to meet the burden of a repayment mortage and ends up maxing out on credit cards to afford other stuff is worse off than if they didn't re-pay. IMO those flexible mortgages where the mortage debt is continually offset against what you hold in a bank account are best.
> (In reply to tobyfk) most people?? most people - where did this assumption come from - i certainly pay back on it all and not just interest. (well ok so it's only a small amount each month - but such is having a mortgage in it's early stages).
A quick google didn't throw up much more than the proportion of interest-only mortgages being "substantial" and "growing". To some extent, the difference between repaying and not repaying is only a psychological one. As long as you are saving the amount you would have otherwise repaid. In fact, someone who struggles to meet the burden of a repayment mortage and ends up maxing out on credit cards to afford other stuff is worse off than if they didn't re-pay. IMO those flexible mortgages where the mortage debt is continually offset against what you hold in a bank account are best.
In reply to tobyfk: Just had my mortgage statement.
Paid off 7k this year, but the mortgage rose by 5.5k, so paid off 1.5k, but each year I pay off more and more of the actual debt as opposed to the interest.
Anyway to settle now would cost me 106k, we bought the house for 11k, and would sell for at least 140k easily, just over a year later due to house price rises and improvements. So it's a good investment.
Paid off 7k this year, but the mortgage rose by 5.5k, so paid off 1.5k, but each year I pay off more and more of the actual debt as opposed to the interest.
Anyway to settle now would cost me 106k, we bought the house for 11k, and would sell for at least 140k easily, just over a year later due to house price rises and improvements. So it's a good investment.
In reply to Daniel Duerden:
In reply to Daniel Duerden:
Most home buyers do not consider the risks of home buying and consequently house prices are driven more by prevailing mood and availablity of credit/mortgages than underlying value and so house prices become overpriced by historical standards.
Considering home buying purely as an investment is there any other investment (say shares) you would consider borrowing money for make the investment when there was no protection from market fluctuations on your outlay ?
If say an investment such as house prices has performed well over a number of years ahead of historic trends the general reaction is that it is a 'safe' investment. In my view it is a more 'risky' investment as it has become overpriced. Similarly when an investment has dropped it is considered 'unsafe' but in my view the reverse is true and it is a safer investment as the downside of it going further lower is minimised. Another feature is that markets overreact in either direction from underpricing to overpricing. The difficulty is timing the market (which is frankly impossible) but the point of entry for the first time buyer is critical in terms of future financial security and return on the investment. Once on the ladder the risks to your initial outlay of trading properties are lower assuming you have some some equity already behind you but that assumes that house prices have advanced since your first purchase. Even if they stay level they may have reduced in real terms relative to inflation and the interest payments you have made are effectively wasted.
Onm the other hand a consideration with home ownership is that it is not just an investment but also a utility where you are saving on rental costs. Another view is that providing you are able to meet the repayments the fluctuations of house prices are irrelevant if you are not planning to sell. On the other hand renting gives you more flexibility to move for jobs etc and avoiding unexpected home repair costs.
In my view the risks of buying are high at the moment and from what I understand the cost of renting is low but that doesnt make buying a home unjustifiable.
In reply to Daniel Duerden:
Most home buyers do not consider the risks of home buying and consequently house prices are driven more by prevailing mood and availablity of credit/mortgages than underlying value and so house prices become overpriced by historical standards.
Considering home buying purely as an investment is there any other investment (say shares) you would consider borrowing money for make the investment when there was no protection from market fluctuations on your outlay ?
If say an investment such as house prices has performed well over a number of years ahead of historic trends the general reaction is that it is a 'safe' investment. In my view it is a more 'risky' investment as it has become overpriced. Similarly when an investment has dropped it is considered 'unsafe' but in my view the reverse is true and it is a safer investment as the downside of it going further lower is minimised. Another feature is that markets overreact in either direction from underpricing to overpricing. The difficulty is timing the market (which is frankly impossible) but the point of entry for the first time buyer is critical in terms of future financial security and return on the investment. Once on the ladder the risks to your initial outlay of trading properties are lower assuming you have some some equity already behind you but that assumes that house prices have advanced since your first purchase. Even if they stay level they may have reduced in real terms relative to inflation and the interest payments you have made are effectively wasted.
Onm the other hand a consideration with home ownership is that it is not just an investment but also a utility where you are saving on rental costs. Another view is that providing you are able to meet the repayments the fluctuations of house prices are irrelevant if you are not planning to sell. On the other hand renting gives you more flexibility to move for jobs etc and avoiding unexpected home repair costs.
In my view the risks of buying are high at the moment and from what I understand the cost of renting is low but that doesnt make buying a home unjustifiable.
In reply to CJD:
Repos are up, but they have been up year-on-year since the base rate started climbing from 3.5 a few years ago - a record post-war level - and times are still good.
The base rate won't top 6% this year and repos will keep rising but other market factors are so strong that there is sufficient a cushion for a crash to be prevented. We've just survived (or rather are still surviving) the US Sub-prime turmoil, which in 'shakier' times would have shafted the economy.
Prices will stop rising by the same amounts but they won't start 'falling', not unless another wheel falls off the economic band-wagon, and still it's unlikely. This is of course only an educated opinion like all the ones you get in the press, but the aye's still have it for safe investment.
Verdict: Buy if you're going to keep hold of it.
> (In reply to The Lemming)
>
> okay, let me rephrase - the market looks *particularly* shaky at the moment. Apparently repossessions are on the up.
>
> <caveat: I rent, so I'm a bit clueless apart from what I read in the news>
>
> okay, let me rephrase - the market looks *particularly* shaky at the moment. Apparently repossessions are on the up.
>
> <caveat: I rent, so I'm a bit clueless apart from what I read in the news>
Repos are up, but they have been up year-on-year since the base rate started climbing from 3.5 a few years ago - a record post-war level - and times are still good.
The base rate won't top 6% this year and repos will keep rising but other market factors are so strong that there is sufficient a cushion for a crash to be prevented. We've just survived (or rather are still surviving) the US Sub-prime turmoil, which in 'shakier' times would have shafted the economy.
Prices will stop rising by the same amounts but they won't start 'falling', not unless another wheel falls off the economic band-wagon, and still it's unlikely. This is of course only an educated opinion like all the ones you get in the press, but the aye's still have it for safe investment.
Verdict: Buy if you're going to keep hold of it.
In reply to Simon Lee:
very interesting reading all of this. The costs of buying/rent does depend on the area (but all the other costs of buying to factor in). In the SE, buying is generally much cheaper than renting, in terms of mortgage payment vs rent, but that's without factoring in all the buying costs, repair, redecoration etc etc.
To the OP:
Some of this is quite interesting:
Most couples today cohabit before they marry. The crucial issue here is whether they moved in together with the full intention to get married, or whether they moved in together just because it was the logical thing to do, since he was always at her place anyway. You might think that living together is a sort of "trial period" that helps prevent bad marriages, since they can break up before taking an oath to each other. But the odds suggest the opposite; they divorce more. Why doesn't this filter work? Very likely, whatever it was that made them not want to get married in the first place ended up becoming a problem long-term.
http://www.time.com/time/nation/article/0,8599,1209784,00.html
http://www.economist.com/world/na/displaystory.cfm?story_id=9218127
American not UK articles, and a bit beyond what you were asking but there's some discussion of it on this thread.
> (In reply to Daniel Duerden)
>
>
> In my view the risks of buying are high at the moment and from what I understand the cost of renting is low but that doesnt make buying a home unjustifiable.
>
>
> In my view the risks of buying are high at the moment and from what I understand the cost of renting is low but that doesnt make buying a home unjustifiable.
very interesting reading all of this. The costs of buying/rent does depend on the area (but all the other costs of buying to factor in). In the SE, buying is generally much cheaper than renting, in terms of mortgage payment vs rent, but that's without factoring in all the buying costs, repair, redecoration etc etc.
To the OP:
Some of this is quite interesting:
Most couples today cohabit before they marry. The crucial issue here is whether they moved in together with the full intention to get married, or whether they moved in together just because it was the logical thing to do, since he was always at her place anyway. You might think that living together is a sort of "trial period" that helps prevent bad marriages, since they can break up before taking an oath to each other. But the odds suggest the opposite; they divorce more. Why doesn't this filter work? Very likely, whatever it was that made them not want to get married in the first place ended up becoming a problem long-term.
http://www.time.com/time/nation/article/0,8599,1209784,00.html
http://www.economist.com/world/na/displaystory.cfm?story_id=9218127
American not UK articles, and a bit beyond what you were asking but there's some discussion of it on this thread.
In reply to Cerulean:
I still reckon that trying out living with someone in a relatively risk free environment (i.e. renting, or both of you living in a house that one owns, rather than going into a joint mortgage straight off) is the way forward. You can work out in 6 months if you can live together.
I still reckon that trying out living with someone in a relatively risk free environment (i.e. renting, or both of you living in a house that one owns, rather than going into a joint mortgage straight off) is the way forward. You can work out in 6 months if you can live together.
In reply to rock waif:
good point - I'd quite like to buy, to be able to decorate how I want, but my rent payments are soooo much lower than a mortgage would be that it's just not viable. I also get the benefit of someone else having to fix dodgy roofing, etc...
> (In reply to Simon Lee)
> [...]
>
> very interesting reading all of this. The costs of buying/rent does depend on the area (but all the other costs of buying to factor in). In the SE, buying is generally much cheaper than renting, in terms of mortgage payment vs rent, but that's without factoring in all the buying costs, repair, redecoration etc etc.
>
>> [...]
>
> very interesting reading all of this. The costs of buying/rent does depend on the area (but all the other costs of buying to factor in). In the SE, buying is generally much cheaper than renting, in terms of mortgage payment vs rent, but that's without factoring in all the buying costs, repair, redecoration etc etc.
>
good point - I'd quite like to buy, to be able to decorate how I want, but my rent payments are soooo much lower than a mortgage would be that it's just not viable. I also get the benefit of someone else having to fix dodgy roofing, etc...
In reply to CJD:
Sorry, didn't pick up on the emotional side of the argument. I was just dealing with the financial side.
In terms specific to the OP I'd agree, get a 12 month rental contract (6 if possible) and see if you can work together financially, when you're ill, when you're angry/ upset/ bored/ irritating/ needy etc, and then consider a long-term financial committment/ investment with a person you're happy doing it with.
A safe financial environment is never a fail-safe for hideous personal arguments about thousands of pounds and '...who gets the f*ckin house...'
> (In reply to Cerulean)
>
> I still reckon that trying out living with someone in a relatively risk free environment (i.e. renting, or both of you living in a house that one owns, rather than going into a joint mortgage straight off) is the way forward. You can work out in 6 months if you can live together.
>
> I still reckon that trying out living with someone in a relatively risk free environment (i.e. renting, or both of you living in a house that one owns, rather than going into a joint mortgage straight off) is the way forward. You can work out in 6 months if you can live together.
Sorry, didn't pick up on the emotional side of the argument. I was just dealing with the financial side.
In terms specific to the OP I'd agree, get a 12 month rental contract (6 if possible) and see if you can work together financially, when you're ill, when you're angry/ upset/ bored/ irritating/ needy etc, and then consider a long-term financial committment/ investment with a person you're happy doing it with.
A safe financial environment is never a fail-safe for hideous personal arguments about thousands of pounds and '...who gets the f*ckin house...'
In reply to CJD:good point - I'd quite like to buy, to be able to decorate how I want, but my rent payments are soooo much lower than a mortgage
If you have the self-discipline try and save the difference between the two into a cash ISA or similar high interest account then if the difference between the cost of renting and buying switch places you then have a good deposit to buy and furnish a home.
If you have the self-discipline try and save the difference between the two into a cash ISA or similar high interest account then if the difference between the cost of renting and buying switch places you then have a good deposit to buy and furnish a home.
In reply to Simon Lee:
other financial obligations mean that that's not entirely possible at the moment - I don't have £400/500 free every month - but I'm working on it...
other financial obligations mean that that's not entirely possible at the moment - I don't have £400/500 free every month - but I'm working on it...
In reply to CJD: round here rental is higher than a mortgage for most people (private renting) on an equivalent property
but if it's much lower to rent, I don't think renting is "dead money" imho. there's also quality of life, and all those climbing holidays and weekends
but if it's much lower to rent, I don't think renting is "dead money" imho. there's also quality of life, and all those climbing holidays and weekends
In reply to rock waif:
it seems like monthly mortgage payments on something like a 'starter home' (around £120k for a terraced house in an area I'd be happy to live in (i.e. not worrying about my car getting nicked, etc)) would be around £800... my current rent is £300. Makes sense for me at the mo...
it seems like monthly mortgage payments on something like a 'starter home' (around £120k for a terraced house in an area I'd be happy to live in (i.e. not worrying about my car getting nicked, etc)) would be around £800... my current rent is £300. Makes sense for me at the mo...
In reply to Cerulean:
> We've just survived (or rather are still surviving) the US Sub-prime turmoil, which in 'shakier' times would have shafted the economy.
>
Premature comment of the day!! :O) The truth is that hardly any of the financial institutions actually know what their exposure is >
In reply to woolsack:
I take it you read (or rather are still surviving)?
The ones that I work with now have a clearer picture and have offset risk accordingly.
> (In reply to Cerulean)
> [...]
> Premature comment of the day!! :O) The truth is that hardly any of the financial institutions actually know what their exposure is
> [...]
> Premature comment of the day!! :O) The truth is that hardly any of the financial institutions actually know what their exposure is
I take it you read (or rather are still surviving)?
The ones that I work with now have a clearer picture and have offset risk accordingly.
In reply to CJD: Presumably the rent you are paying isnt for a house equivalent to the one you would buy though? If it is, i'm suprised at the differential you quote.
We went from £450 pm rent to £650pm morgage by moving down the road into a marginally bigger house (£120k, 95% morgage).
We went from £450 pm rent to £650pm morgage by moving down the road into a marginally bigger house (£120k, 95% morgage).
In reply to ceri:
If I was to buy I'd end up paying more and living somewhere inferior to where I live now.
> (In reply to CJD) Presumably the rent you are paying isnt for a house equivalent to the one you would buy though? If it is, i'm suprised at the differential you quote.
If I was to buy I'd end up paying more and living somewhere inferior to where I live now.
In reply to ceri:
yeah, it's for a very big one bedroom flat, with offstreet parking (in a garage) etc... not really that different. A two bed terrace would be likely to be smaller in terms of floor space.
hey ho. As I say, I'm not in a position to take on that financial position at the moment, certainly not on my own.
yeah, it's for a very big one bedroom flat, with offstreet parking (in a garage) etc... not really that different. A two bed terrace would be likely to be smaller in terms of floor space.
hey ho. As I say, I'm not in a position to take on that financial position at the moment, certainly not on my own.
In reply to rock waif:
That is quite surprising, where is 'round here'?
Round Oxford, rent is significantly cheaper than the equivalent mortgage repayments and, I would say, now cheaper than just the interest on a mortgage.
> (In reply to CJD) round here rental is higher than a mortgage for most people (private renting) on an equivalent property
That is quite surprising, where is 'round here'?
Round Oxford, rent is significantly cheaper than the equivalent mortgage repayments and, I would say, now cheaper than just the interest on a mortgage.
In reply to Daniel Duerden:
Blimey, lots of factors to consider.
Annual Rent = all money goes to landlord
Annual Rent = Landlord pays for up keep of house etc
Annual Mortgage = most goes to mortgage company, some to capital repayment (look the number in the price bracket and mortgage term you are looking at).
Try and get the term as short as possible - 10 - 15 years if you can afford it. Use ANY spare cash to pay off capital. Much better way to use money rather than invest or put into pension
Annual Mortgage = you will pay for all up keep of house and insurance of house. Rent may include council tax and some utility bills?
Buying a house = not cheap if you are above threshold for Stamp Duty, plus Solicitors costs.
Make sure you have written agreement on what happens if you split or one of you (or both of you) dies.
My recommendation - buy if you see a future together of >3-5 years.
Blimey, lots of factors to consider.
Annual Rent = all money goes to landlord
Annual Rent = Landlord pays for up keep of house etc
Annual Mortgage = most goes to mortgage company, some to capital repayment (look the number in the price bracket and mortgage term you are looking at).
Try and get the term as short as possible - 10 - 15 years if you can afford it. Use ANY spare cash to pay off capital. Much better way to use money rather than invest or put into pension
Annual Mortgage = you will pay for all up keep of house and insurance of house. Rent may include council tax and some utility bills?
Buying a house = not cheap if you are above threshold for Stamp Duty, plus Solicitors costs.
Make sure you have written agreement on what happens if you split or one of you (or both of you) dies.
My recommendation - buy if you see a future together of >3-5 years.
In reply to Jay Ledder: I've manged to go higher
http://www.rightmove.co.uk/viewdetails-7885086.rsp?pa_n=1&tr_t=rent
Although you do have to share the loo
http://www.rightmove.co.uk/viewdetails-7885086.rsp?pa_n=1&tr_t=rent
Although you do have to share the loo
In reply to Jay Ledder:
What's the point of these links? You can pay a lot more in London.
They're usually short term lets for international clients.
What's the point of these links? You can pay a lot more in London.
They're usually short term lets for international clients.
In reply to El Greyo: round here = South East (not London, no idea about that!) I think I said that somewhere...
In reply to Daniel Duerden: Not read all the comments so don't know if anyones covered this already as I'm considering buying at some point. My advice...
Don't buy .........yet!
Interest rates still look that they may move up another quarter or possibly two. The world stock markets are particulary volitile and prices may slide in some areas.
If your in it for the long term and can afford interest rates to rise then its not so much a problem as over time the value of the property will rise but nothing like we've seen over the past 10 years.
If your not in it for the long term definitely don't buy.
At the root of the probelm is a shortage of supply but with the long term trend in cheap money coming to an end more houses from the so called buy to leave will become available as well as some buy to let owners offloading their property due to reducing or negative returns. This combined with increased housebuilding will reduce the rate that property rises in the future.
Don't buy .........yet!
Interest rates still look that they may move up another quarter or possibly two. The world stock markets are particulary volitile and prices may slide in some areas.
If your in it for the long term and can afford interest rates to rise then its not so much a problem as over time the value of the property will rise but nothing like we've seen over the past 10 years.
If your not in it for the long term definitely don't buy.
At the root of the probelm is a shortage of supply but with the long term trend in cheap money coming to an end more houses from the so called buy to leave will become available as well as some buy to let owners offloading their property due to reducing or negative returns. This combined with increased housebuilding will reduce the rate that property rises in the future.
In reply to Cerulean: Well for the first one at £10,000 per month a 25 year tenancy would make you pay £3,000,000.
The house will be worth less than this to buy therefore to answer the question posed earlier - where is it that rental is more expensive than mortgage - Beaconsfield.
That was the point of the links.
Hope that helps.
The house will be worth less than this to buy therefore to answer the question posed earlier - where is it that rental is more expensive than mortgage - Beaconsfield.
That was the point of the links.
Hope that helps.
In reply to Jay Ledder:
ummm. the first one is available to buy. monthly mortage cost £18,000!!!! interest only £13,000 so def cheaper to rent!!!
as for buying cheaper in the south east. it certainly aint in any town i know.
ummm. the first one is available to buy. monthly mortage cost £18,000!!!! interest only £13,000 so def cheaper to rent!!!
as for buying cheaper in the south east. it certainly aint in any town i know.
In reply to Cerulean:
Is it not?
Golly.
> (In reply to Jay Ledder)
>
> Ah right. Not really an every day example though eh?
>
> Ah right. Not really an every day example though eh?
Is it not?
Golly.
In reply to erikb56:
Was that for a 100% mortgage?
> (In reply to Cerulean)
> and as i've pointed out not an accurate example either.
> and as i've pointed out not an accurate example either.
Was that for a 100% mortgage?
In reply to Jay Ledder:
(fwiw is i wanted to live in such a property and would be there for the next 25 years i would buy)
> (In reply to erikb56)
> [...]
>
> Was that for a 100% mortgage?
relevance being??? if the interest payments are greater then the rent then your example is faulty. adding in factors such as £1mill deposits changes the whole issue!!!!> [...]
>
> Was that for a 100% mortgage?
(fwiw is i wanted to live in such a property and would be there for the next 25 years i would buy)
In reply to Daniel Duerden:
I think most people I know who cohabit started out by renting. Aside from the questions of marriage etc, I do think it is the logical way to do it. Otherwise you're looking at making what is probably the largest financial commitment you're going to make in your life, without knowing if you can actually live together! (Then again, it worked for plenty of folk in the times when people didn't cohabit before marriage.)
I agree that in the SE it tends to cost slightly more to buy than to rent, but I think that reflects the fact that people tend to upgrade when buying, eg I rented a flat before we bought a house, and you can't really compare a 1 bedroom flat to a 3 bedroom house/garden etc. The other benefit is that you tend to pool resources to buy, so relative costs go down as you only have one set of bills rather than two.
I think if you don't live together already then it would make sense to rent first, as it gives you a chance to see what you like (eg what you'd want to change about a place if you owned it) as well as a trial period for the relationship. That said, if you are committed enough then go for it, but I would ensure you have a legal agreement (available from solicitors) that says how you're going to split costs/what happens if you split up. Not romantic but it covers your back (to be fair, I haven't done this!).
We bought a while back and it was one of the best things we ever did. We're both enjoying living in a place that's ours, that we can make changes to and not have to deal with landlords, and have whatever pets you want, etc... big garden... I think it's a bit of a cliche but it does make you feel more settled. And there's a lot to be said for how you feel about committing to the relationship.
I think most people I know who cohabit started out by renting. Aside from the questions of marriage etc, I do think it is the logical way to do it. Otherwise you're looking at making what is probably the largest financial commitment you're going to make in your life, without knowing if you can actually live together! (Then again, it worked for plenty of folk in the times when people didn't cohabit before marriage.)
I agree that in the SE it tends to cost slightly more to buy than to rent, but I think that reflects the fact that people tend to upgrade when buying, eg I rented a flat before we bought a house, and you can't really compare a 1 bedroom flat to a 3 bedroom house/garden etc. The other benefit is that you tend to pool resources to buy, so relative costs go down as you only have one set of bills rather than two.
I think if you don't live together already then it would make sense to rent first, as it gives you a chance to see what you like (eg what you'd want to change about a place if you owned it) as well as a trial period for the relationship. That said, if you are committed enough then go for it, but I would ensure you have a legal agreement (available from solicitors) that says how you're going to split costs/what happens if you split up. Not romantic but it covers your back (to be fair, I haven't done this!).
We bought a while back and it was one of the best things we ever did. We're both enjoying living in a place that's ours, that we can make changes to and not have to deal with landlords, and have whatever pets you want, etc... big garden... I think it's a bit of a cliche but it does make you feel more settled. And there's a lot to be said for how you feel about committing to the relationship.
In reply to Jay Ledder:
being an uber bear doomster can never resist rising to a property bubble linked bait.
> (In reply to erikb56)
>
>
>
>
being an uber bear doomster can never resist rising to a property bubble linked bait.
In reply to Cerulean: You are either dreaming or on drugs if you think the sub prime fiasco has played out. The wardrobe is packed with skeletons
In reply to Daniel Duerden:
I've not read all the above responses Dan, but my opinion for what it's worth is this. Your decision is based on two things really - one is the stability of your relationship, and the second the housing market.
If, and only if you are absolutely certain that your relationship will continue to work well when you live together should you consider buying together. I do not say this to put a question over it but living together for the first time does put a lot of strain on a relationship, and you will learn a lot more you didn't know about one another! Most of the time this will be all for the better, but it can go the other way too. You shouldn't see this as questioning your relationship, but more considering whether you are ready for taking two big steps together.
Re the housing market, the decision to rent or buy is dependant upon your ability to pay the mortgage in the long term and the way the housing market is likely to go. If you have a stable and guaranteed income (i.e. should your firm make you redundant, how quickly could you find a role of similar standing/remuneration), and have the flexibility to cope with rises in interest rates beyond the current level then you are in a good position to buy. You must consider longer than the fixed term of any mortgage though - the market may be in a worse position when it ends so your payments could rise significantly at that point, question whether you could cope with a 2.5% increase in interest rate for example.
If you are not in this position then you are more at the mercy of the market. My own view is that the bottom end of market is likely to fall out some time in the next 12-18 months, with lenders calling in debts from defaulters - i.e. repossession. This will result in lower house prices in the lower end of the market, but should you have the ability to pay your mortgage through this you will not be affected - until you come to sell.
It's a complex situation and can't be answered with a simple 'buy' or 'rent'. Consider your position fully before diving in, it is anybody's guess how the market will change.
I've not read all the above responses Dan, but my opinion for what it's worth is this. Your decision is based on two things really - one is the stability of your relationship, and the second the housing market.
If, and only if you are absolutely certain that your relationship will continue to work well when you live together should you consider buying together. I do not say this to put a question over it but living together for the first time does put a lot of strain on a relationship, and you will learn a lot more you didn't know about one another! Most of the time this will be all for the better, but it can go the other way too. You shouldn't see this as questioning your relationship, but more considering whether you are ready for taking two big steps together.
Re the housing market, the decision to rent or buy is dependant upon your ability to pay the mortgage in the long term and the way the housing market is likely to go. If you have a stable and guaranteed income (i.e. should your firm make you redundant, how quickly could you find a role of similar standing/remuneration), and have the flexibility to cope with rises in interest rates beyond the current level then you are in a good position to buy. You must consider longer than the fixed term of any mortgage though - the market may be in a worse position when it ends so your payments could rise significantly at that point, question whether you could cope with a 2.5% increase in interest rate for example.
If you are not in this position then you are more at the mercy of the market. My own view is that the bottom end of market is likely to fall out some time in the next 12-18 months, with lenders calling in debts from defaulters - i.e. repossession. This will result in lower house prices in the lower end of the market, but should you have the ability to pay your mortgage through this you will not be affected - until you come to sell.
It's a complex situation and can't be answered with a simple 'buy' or 'rent'. Consider your position fully before diving in, it is anybody's guess how the market will change.
In reply to rock waif:
Yes, I did see you had said that which was what I found surprising as in my part of the southeast, the contrary is true and quite considerably so. But the southeast is quite large and varied so I didn't want to say 'I don't believe you'.
Yes, I did see you had said that which was what I found surprising as in my part of the southeast, the contrary is true and quite considerably so. But the southeast is quite large and varied so I didn't want to say 'I don't believe you'.
In reply to El Greyo:
When I was considering buying an equivalent property in Kent to the one I was renting in Surrey, the payments would've been pretty much the same for 2 bedrooms (needing some work) vs 1 bedroom purpose built (I was renting).
Apparently Sussex has some of the highest house prices. We definitely didn't save money by buying (just under double monthly payments). But we could afford it, and the way I see it is that you're actually saving money in a way because it'll belong to you at the end, whereas a rented property won't. So any improvements you make won't be lost.
When I was considering buying an equivalent property in Kent to the one I was renting in Surrey, the payments would've been pretty much the same for 2 bedrooms (needing some work) vs 1 bedroom purpose built (I was renting).
Apparently Sussex has some of the highest house prices. We definitely didn't save money by buying (just under double monthly payments). But we could afford it, and the way I see it is that you're actually saving money in a way because it'll belong to you at the end, whereas a rented property won't. So any improvements you make won't be lost.
Can't be bothered to read the whole thread but my advice would be to rent first. Renting will help you to identify what you want from a house. This may sound silly, but after renting for 10 months our priorities when buying a house were very different to when we first moved in.
Long term I would agree that buying is the best option but don't underestimate the benefits of renting first. Yes it may cost more upfront but by renting first we avoided an expensive mistake when we came to buying.
Long term I would agree that buying is the best option but don't underestimate the benefits of renting first. Yes it may cost more upfront but by renting first we avoided an expensive mistake when we came to buying.
In reply to Daniel Duerden:
When you say that you are looking to move in with your girlfriend, what exactly are you both looking for?
Sit down and talk to her about it. Are you both planning a committed, life long relationship?
Or are you both fed up of living at home and don't particularly want to live together but just want freedom from your parents?
Also - what sort fo income do you have and how reliable is it?
How much does it cost to rent in the area that you live in, and how much does it cost to buy?
Your decision isn't just a financial one - it is also what is right for both you and her - so only you will know what is right for you at the end of the day.
When you say that you are looking to move in with your girlfriend, what exactly are you both looking for?
Sit down and talk to her about it. Are you both planning a committed, life long relationship?
Or are you both fed up of living at home and don't particularly want to live together but just want freedom from your parents?
Also - what sort fo income do you have and how reliable is it?
How much does it cost to rent in the area that you live in, and how much does it cost to buy?
Your decision isn't just a financial one - it is also what is right for both you and her - so only you will know what is right for you at the end of the day.
In reply to woolsack:
Woah there!
I said 'played out'?
The markets are coping, a few big players have taken hits, but lets leave the sensationalism to the tabloids eh?
> (In reply to Cerulean) You are either dreaming or on drugs if you think the sub prime fiasco has played out. The wardrobe is packed with skeletons
Woah there!
I said 'played out'?
The markets are coping, a few big players have taken hits, but lets leave the sensationalism to the tabloids eh?
In reply to Daniel Duerden:
I'd rent for 6 months to see if you get on together ok, seeing as you both live with your parents still. You'll be amazed at how different it feels to actually live with someone as opposed to staying over the odd night or spending a couple of weeks together on holiday. Though I do admit I don't know your exact situation.
In that time you can search for the right house, in the right area, see how the mortgage rate goes and get the best deal for you both without jumping in too quickly.
Anyway, good luck.
I'd rent for 6 months to see if you get on together ok, seeing as you both live with your parents still. You'll be amazed at how different it feels to actually live with someone as opposed to staying over the odd night or spending a couple of weeks together on holiday. Though I do admit I don't know your exact situation.
In that time you can search for the right house, in the right area, see how the mortgage rate goes and get the best deal for you both without jumping in too quickly.
Anyway, good luck.
In reply to Nao:
Sounds very much like you bought your house for the same reasons that we are wanting to buy: not a hard nosed financial decision, more that you want somewhere to make your own. So long as you can afford the repayments, with some contingency, then it's a good thing to do.
For us too, we're looking at mortgage repayments double what we are currently paying in rent. Unfortunately that still doesn't seem buy us anywhere we'd actually want to live and definitely not as nice as where we're living at the moment. So we've put buying a house on the back burner for while. Maybe it'll be for the best and tobyfk and lowersharpnose will be right and there will be a 'readjustment'.
Sounds very much like you bought your house for the same reasons that we are wanting to buy: not a hard nosed financial decision, more that you want somewhere to make your own. So long as you can afford the repayments, with some contingency, then it's a good thing to do.
For us too, we're looking at mortgage repayments double what we are currently paying in rent. Unfortunately that still doesn't seem buy us anywhere we'd actually want to live and definitely not as nice as where we're living at the moment. So we've put buying a house on the back burner for while. Maybe it'll be for the best and tobyfk and lowersharpnose will be right and there will be a 'readjustment'.
In reply to rock waif:
FWIW I have a Brit friend here in the Gulf who has just bought a large-ish house in Hertfordshire. Even though his mortgage is less than half the price he paid (ie he put down a very fat deposit) he still can't let it for enough to cover the mortage interest.
> (In reply to CJD) round here rental is higher than a mortgage for most people (private renting) on an equivalent property
FWIW I have a Brit friend here in the Gulf who has just bought a large-ish house in Hertfordshire. Even though his mortgage is less than half the price he paid (ie he put down a very fat deposit) he still can't let it for enough to cover the mortage interest.
In reply to Cerulean: Exactly - the situation here very different to the US, and with the exception of Northern Rock and the non-balance sheet lenders (who we'd be better off without as they'fre the ones pushing daft lending criteria) most of the UK market has a more balanced funding mix and isn't so reliant on wholesale.
In reply to sutty:
Yes, it's wrong.
Over the year that the property was owned a lot of interest would have to be paid. You don't get interest back.
Also, the frictional costs of moving are high.
Stamp duty on purchase, estate agent fees on sale, legal costs, removals, decorating, sorting out problems.
When it is said 'If you can afford to buy, then buy'
What is normally meant is, "If you are able to borrow a large enough chunk of money to buy, then buy".
rgds
lowerSharpnose
> (In reply to andy)
>
> Another way to look at it is to see how much it would cost to rent a place. If you bought a place for the same money as rent then had to sell it in a year for say 5k less than you paid for it you may still be in pocket taking into consideration the rent you would have paid.
>
> Any comments on that?
>
> Another way to look at it is to see how much it would cost to rent a place. If you bought a place for the same money as rent then had to sell it in a year for say 5k less than you paid for it you may still be in pocket taking into consideration the rent you would have paid.
>
> Any comments on that?
Yes, it's wrong.
Over the year that the property was owned a lot of interest would have to be paid. You don't get interest back.
Also, the frictional costs of moving are high.
Stamp duty on purchase, estate agent fees on sale, legal costs, removals, decorating, sorting out problems.
When it is said 'If you can afford to buy, then buy'
What is normally meant is, "If you are able to borrow a large enough chunk of money to buy, then buy".
rgds
lowerSharpnose
I've really enjoyed reading all your comments.
It's good to hear peoples advice on the relationship side of it as well as the finicial side of it.
I think we are probably going to rent to start with, largely because of the cost.
thanks for all the advice - and keep it coming if you still have more.
Dan
It's good to hear peoples advice on the relationship side of it as well as the finicial side of it.
I think we are probably going to rent to start with, largely because of the cost.
thanks for all the advice - and keep it coming if you still have more.
Dan
In reply to andy:
Another statement that I believe is often assumed true without pause for thought. If there was really a shortage of housing in the UK there would have been massive rises in rents as well as in house prices. In fact, rents have risen very slowly over the last couple of decades; far less than prices have risen.
> there's still a major shortage of housing in the UK
Another statement that I believe is often assumed true without pause for thought. If there was really a shortage of housing in the UK there would have been massive rises in rents as well as in house prices. In fact, rents have risen very slowly over the last couple of decades; far less than prices have risen.
In reply to tobyfk: If there was really a shortage of housing in the UK there would have been massive rises in rents as well as in house prices.
As well as a lot of people living in tents !. Lot of places advertised for rent with immediate availablity in the Sheffield Telegraph at least.
I think that 'a shortage of housing' is usually shorthand for a 'shortage of affordable housing'. The only reason suitable properties are not affordable is that it is over priced rather than the mix of housing stock being wrong.
Nice to see Gordon hyping up the shortage issue to distract from failures to reform the public sector.
As well as a lot of people living in tents !. Lot of places advertised for rent with immediate availablity in the Sheffield Telegraph at least.
I think that 'a shortage of housing' is usually shorthand for a 'shortage of affordable housing'. The only reason suitable properties are not affordable is that it is over priced rather than the mix of housing stock being wrong.
Nice to see Gordon hyping up the shortage issue to distract from failures to reform the public sector.
In reply to Simon Lee: Would agree, 'affordable' is an interesting phrase: affordable for who?
In reply to woolsack:
Quite.
Affordable currently appears to mean able to pay the interest on an interest-only mortgage at the current rate insofar as you can 'afford' to pay it and probably expect continued capital gain. However, just because its affordable does mean its prudent.
The changing use of words and meanings that reflect the current economic climate and fashions are interesting and opinion forming and can help give a sense of illusory security in a bubble and also fear in a recession.
Quite.
Affordable currently appears to mean able to pay the interest on an interest-only mortgage at the current rate insofar as you can 'afford' to pay it and probably expect continued capital gain. However, just because its affordable does mean its prudent.
The changing use of words and meanings that reflect the current economic climate and fashions are interesting and opinion forming and can help give a sense of illusory security in a bubble and also fear in a recession.
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