AIBU to think they should buy rather than rent a tiny flat?

@IngaMingeryes it makes much sense to save longer & go straight for a house.

Most people have to compromise & a lot of areas end up getting better.

Flats can be difficult to sell. Depending on house prices in your area then losing their first time buyers status before they buy a house could be costly in terms of stamp duty. Also means they can continue to save in a LISA and get an additional £1,000 each every year.

All round sounds very sensible to me. The extra they pay in rent is probably less than what they would pay in maintained/upkeep, buying and selling fees, stamp duty, and interest/LISA bonus on deposit savings.

YABU

In London flats are cheaper to rent than buy.

Just because you can afford to buy something doesn’t make it a smart financial decision to do so.

Keep renting, saving for a bigger deposit, increasing salary and then buying a house in 5 years is the smart thing to do.

Have you looked at home much a property where they live would be?

Do they see themselves being there long term?

We rented at various points because we didn't know where we wanted to live longer term.

This is tiny deppsot, after paying all fixed costs. They should first see if 1 bed is at all big enough for them. And the area as well.
My son and his bf just rented a 2bd maisonette for the same amount as yours but it took them 2 weeks to find one. I advised them to rent first, to sèe how much space do they need for both of them etc. And also to try the area of where to buy in the future. They earn much more between them and have bigger deposit, that doesn't mean they should buy before trying for those reasons I mentioned.

What is this obsession that some people have - in this country - with owning a property? Your PIL sound annoying!

Just because they're paying £1700 in rent doesn't mean that lenders will consider that an affordable mortgage for them either. Lenders can be pretty conservative with their affordability checks. When we bought, the actual mortgage we were offered was well below what we had been paying in rent, despite never missing payments. The lenders want to know you can afford the mortgage even if rates increase or your outgoings increase (because let's face it, both are pretty likely right now)

PIL thought this with DP and I. Properly nagged us.

They were actually emailing us 2 bed flats for circa £250k because they knew we had over £25k saved.

We had the earning capacity to be able to buy a 3 bed house so it just made more sense to spend another 2-3 years renting and save up another £20k to get a better deposit and other associated costs. Flat prices in our area have been stagnant for 15 odd years and are now selling for less than paid for.

With that deposit and salary they'll be able to afford to buy a house in the home counties. Maybe they just want a few more fun london years before making that type of move? Buying something in London with a mortgage of £1,700 pm is going to be tough.

As a Londoner they probably can’t afford a flat. With their deposit and salary they’d need one for around £300k. Not many nice safe places that are affordable in that range and commutable.

I live in London and we earn a joint salary of just under £100k - can't afford to buy anywhere I would want to live.

50k is hardly a 10% deposit for most places in London, unless they want to buy a flat (which isn't always the best idea). They may be saving for a bigger deposit and get a house, however mortgage repayments will be even bigger than their current monthly rent. I'm from NE but lived in London since inwas 19 and my family were shocked and appalled at how much rent I paid in 15 years, but it's hard to buy on their salary (my husband and I were on exact same household income of 65k), mortgage on a 390k tiny 2 bed house in our area (which was way out in zone 6/Surrey border so not even central) meant repayments of near 2k a month! It's a different world there.

They probably couldn’t afford to buy a flat similar to what they are renting, even with the deposit.

Where in London are they? Have you actually looked at the prices of two bed flats in safe areas?

Edited to add, they might not be planning on staying in London medium to long term either.

Lots of people are struggling to sell flats at the moment, so unless they want to live in a flat long term I don’t blame them.

You are right.

Dont buy a flat

You're taking a very naive, narrow, short term view.

£1700 a month, and it's in London? I know a couple who were paying that in Chester and another couple who were paying it in Shrewsbury. 1 bed tiny flat. What are they going to buy in London for £1700 a month? Even a cheaper 1 bed flat that cost £500K would have a mortgage repayment that is double the rent.

Where are they going to buy in London that costs £250K @LindorDoubleChoc ?? To enable £1700 a month repayments?

Better off renting imho. Especially if the relationship breaks down.

It's probably to ensure that their parents can't come and stay.

They're doing well to have £50k on a very average combined income.

Perhaps they're saving until they have enough to skip the flat and find a small house.
Perhaps they don't want to commit to a mortgage before they're 100% sure they want to build a life together?
Maintenance - they currently call someone and it gets fixed.
Stamp duty - it's crippling and every week someone's suggesting it's about to change.
And maybe they're enjoying the London life but plan to move elsewhere in a few years & get better VFM when they're ready to settle down?

You've got to let them do their own thing.

YABU to think this is any of your business.

How old are they? I bought in my twenties at my parents insistence and regretted it - I didn’t like the responsibility and it meant I couldn’t move easily.

You might want to have a read of this OP
https://www.bbc.co.uk/news/articles/cwyz7332dd6o

And I agree, lenders aren't going to offer them anywhere near what they'd need to buy in London, the fact that they're managing to pay the high rent isn't something lenders are interested in at all.

With a joint income of £60-65k, no they probably can’t buy something in London, even with a £50k deposit.

I assume given the salary level for that location, they are early in their careers - better to earn more / work out if London is where they want to be, than buy a crap but still overpriced flat in a grotty area (and then probably struggle to sell it on).