Renting/buying/landlord aaaarrrgggghh dilemma!

[MrsStatesAttorney]

Name changed so as not to out self. Would really appreciate any advice.

We live in 3 bed rented semi, we pay what is essentially a knock down price of 500 quid a month to live here, we have lived here since 2009 except for a 7 month period where we moved out after the landlord decided he wanted to sell in 2011 (he approached us at our new rental and asked us to move back in as he couldn't sell it for the price he wanted to). DS goes to school in the village we live in, DD goes to school in another village about 2 miles away (not walkable) DD's Best friend recently moved to the new school village having previously lived over the road from us. DS has 5 years left at his current school and DD has 3 years left at hers, our preferred next school for star girl is right on our catchment border where we live now, if we lived in next school village she would likely get in. At the minute DS and I can walk to school together in the morning, he loves doing this. DD gets to school via a lift from her best friends mum as she still has to make the trip to our village to take her other child to school (this will stop as of September). Oh the house also has a south facing back garden. Which we absolutely love.

So that's a bit of background.

Mr SA has a bit of a chequered past with regard to finances, he's sorted and this year everything finally drops off his credit report (aside from a couple of settled accounts that had one late payment on from approx 5 years ago) so we were looking to maybe buying our own home again this year. We don't have a huge amount saved for a deposit however we are possibly in a position to borrow 10k to use as a deposit. This isn't certain.

So the landlord decides he wants to sell the house again, he wants approx 135k for the house and has offered us first refusal. Houses like this are common in this area, in reasonable nick they can go for approx 140-150k....

See example www.rightmove.co.uk/property-for ... 31153.html
This house has also been extended and has a porch on, making it more desirable than the one we are in.

The house we live in needs work doing to it. Quite a bit of work, it still has an old back boiler so central heating needs entirely replacing, some double glazing needs to be finished (2 small windows) there is a large crack/hole in the kitchen ceiling from old water damage, the kitchen needs replacing as does the bathroom and the electrics are looking a bit dodgy. I estimate approx 10-15k worth of work just to begin. I think a fair price for the house would be 120-125k. However if we borrow the money to out up as a deposit we won't have anything to do the work with. *ETA, we could most likely pull together a 5% deposit for this if we tightened our belts and cashed in a few bits and pieces without having to borrow.

The other thing is we're always considering having a third child, at the minute the house would not easily accommodate a third child although could be doable in the short to medium term and there is room to extend over the garage as many other houses have done.

To buy a bigger house in this village we'd be looking at approx a price of 160-180k (the upper end of which is out of our price range), examples of which are here... www.rightmove.co.uk/property-for ... 38282.html and www.rightmove.co.uk/property-for ... 36965.html however we wouldn't be able to muster up much more than a 5% deposit for these houses (assuming that we could even do so).

Village B (where DD goes to school) and the surrounding area are quite nice, however we wouldn't be able to buy a bigger house there, it would be 3 bedrooms or nothing. www.rightmove.co.uk/property-for ... 08389.html or www.rightmove.co.uk/property-for ... 57750.html (again assuming a deposit could be borrowed).

So. We weren't wanting to move for around 6 months (if we moved at all) and we wanted to use that time to increase our savings and look into borrowing the money to use as a deposit.

So. What would you do... (If you managed to wade through all of that)

[MrsStatesAttorney]

It appears links aren't working, sorry. I think the story works without them.

[expatinscotland]

You can't afford a third child or a house.

[MrsStatesAttorney]

Wow thanks for the help.

[DameFanny]

Sorry but I agree with expat - if you can't put down more than 5% and wouldn't have money for repairs you really shouldn't go into home ownership. The chances of interest rates increasing substantially are higher than not, and a lot of people are going to find themselves in unaffordable positions when that happens.

Sorry.

[expatinscotland]

Well, what did you expect? Someone to say, yeah, take out a mortgage you cannot afford and have a kid you can't afford too,it'll all be fine?

You have to borrow even the deposit, your spouse has dodgy credit, which will still impact the lending rate.

[MrsStatesAttorney]

My spouse no longer has dodgy credit he did have, almost 6 years ago, we've worked hard to pay it off, that is all finished this year, because we've been doing that we've not been able to save as much as we would have liked. We've got some savings and other assets we could cash in to get a quick 5% deposit together for a cheap property, if we had more time we could get more together, we have an increasing amount of disposable income due to debts being completed. But thanks. You've really kicked me when I'm down and upset about losing the stability we've got. I know it's a risk when renting. But it doesn't make it less upsetting. I shouldn't have posted.

[specialsubject]

Unfortunately asking for advice does risk hearing what you don't want to hear.

mortgage rates WILL go up - there are plenty who remember what happened last time when they did.

you say you get the place for cheaper than normal in the area, and that is because it needs work - fair enough. So the landlord will also have to accept a lower sale price. Would he be prepared to wait the six months for you to get in a position to buy it at that price?

[MrsStatesAttorney]

Yes there is that possibility although he's trying to fund a separate project so it's not certain. I know interest rates will go up that's why we have a certain price that we can't go over for affordability both now and in the future, it's just the deposit that I guess is the main sticking point. I take the points about not being able to afford that but I don't suppose I'm the only person in the world to not have a lump sum of cash to access at my whim. I was emotional and upset earlier when I posted and felt like I was failing my kids for not giving them a stable home and didn't take criticism well. I apologise.