Mortgage free (but small) or wait out and rent

[taffila]

We are in a bit of a predicament and I value some view points. We moved to a new town 13mths ago and as we ended up with a buyers who wanted in quick we moved and rented. Rented house is good- spacious and well priced.

But just found out owners want back in this summer. we need to stay in catchment as I have ds2 to get into school next year. Very little on the market in last year in our budget -most ££.

So our predicament is do we move again but rent (£1300 Realistically) and wait for our long term house to come up or do we buy something ok but too small for us - there is something locally that might do if we put on a £30k extension. We would be able to buy it with cash.

Things are further complicated by the fact there is so little on the market in catchment and as my dh is between job we couldn't get mortage ATM so anything we buy needs to be what we have amassed in last 10 years-we are v fortunate I know to have build up lOts of equity. I would hate to be stuck with a house to sell and miss out on The house when finances are better!

[taffila]

I work part time. Redundancy mainly atm.

[myron]

I would move into a 'make do' rental within catchment in your scenario. Squeezing into a smaller but affordable rental will be fine - as long as there is a garage to store your extra furniture. This is what we did when we relocated to live within catchment of the school we wanted the DC to go to. We ended up renting for 18mths (12mths longer than we'd anticipated) but it was worth it in the end - we had to wait 12mths before a suitable house came on the market for us. Our rental was literally half the size of the house we moved from but we managed it - with a garage chock full of furniture & books.

[RandomMess]

I'd make do and be in the catchment. Once school has been started you can look further afield for a property you really like.

[oreocrumbs]

Does you DH have any work on the horizon? If not then to be honest I would buy the smaller house and extend. If you continue to eat into the redundancy then you will ultimatly weaken your position. Even another year renting will take over £15 out of your savings.

Are you certain that you want to stay in this catchment area, is there another good school in an area that you hadn't previously considered?

If you do want to be in this area then I would buy, live rent and mortgage free, build the extension and settle for a while. Yes you might miss your dream home - but keep looking, and if you find it try and sell your house and buy it, but if you can't then there will be another.

[DonInKillerHeels]

"No point spending money in buying an unsuitable house, that would be silly."

No point wasting money on rent, more like. You'd waste more in rent in three months than it would probably cost in stamp duty, etc.

Buy a small, extendable house in catchment, as long as you think you will get your money back when you want to move elsewhere.

[taffila]

Sorry for disappearing - this is really interesting as you have covered all the arguments going round my head at the moment.

I am leaning toward buying the small cheap house mainly for stability for the kids, who have only moved a year ago to a totally new place..

To answer a few questions, yes we want to be in this catchment as we already have a child at the school. There are so many kids that live in catchment that to move out would be very risky (one child got in out of catchment last year).

Realistically if we rent it will be looking at £15k for a year in costs.

We are buying around the £200k mark so fees should be about £4k (we have nothing to see so only one lot so conveyancing).

The house doesn't have to have an extension - it would just make it much better and easier to sell I think. I think it would cost £25k-30k.

I am pretty confident we won't lose money on it (well no more than £10k worse case and that would be covered by a years rent). We are in a popular area wiht house prices that have not been too hammered.

There is no definite job offer on the horizon, but things are not looking too bleak iyswim.

[Levantine]

Hmm tricky. Don't forget that it will cost you £4k to buy but also £4k-ish to sell (am guessing) so transactions costs will be more than that.

[HerRoyalNotness]

I'd have a chat with the estate agent, outline your plans for the extension and find out in this market what the house would be worth if you went ahead with it. Also check with council for planning permission if you are able to do the extension.

I'd go with buying, I HATE renting with a passion. Add value to your house, when things stabilise, sell and upgrade.