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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

to think it's financially better to rent vs buy?

50 replies

EinyLinky · 29/08/2023 07:30

Hi, my situation is quite specific, so looking for opinions. I currently rent through a family member and only pay a few hundred a month for rent (it's usually triple that on the market) but it does have an issue that would make it not be possible to rent to the market anyway (10k to fix, but isn't an issue for me).

I could afford to buy this place (with a mortgage) simply due to the condition (it really looks and feels fine, it's just more of a deeper wall damp issue, that I keep dehumidifiers running for). Family doesn't want to fix it and would rather just sell once I move, vs paying to have it fixed and it go up in more value than that costs. It's one bedroom.

I'd be keen to buy a 2 bedroom place in around 5 years, but can't afford one right now, especially none in the rest of the parts of this town. There was one that did come up along this same road, but the condition inside wasn't liveable and I'd not really be able to then afford to do it up.

I'm better to keep renting at my cheap price and buy in 5 years, with first time buyer discount, etc. etc. that I could actually live in for a considerable time (as it's 2 bedroom). Right? Or is it actually best to just get on the property ladder ASAP with what I can afford?

Thanks

OP posts:
HerProposal · 29/08/2023 07:32

Much, much better to get on the ladder with whatever you can afford than to rent.

TeaKitten · 29/08/2023 07:32

Would you even be able to get a mortgage on a house with 10k worth of damp issues anyway? I’d stay renting, it’s not like you plan on living your whole life renting, you are just still saving for your deposit.

Tumbleweed101 · 29/08/2023 07:33

If you can stay there for next five years at the cheaper rate of rent without the risk of it being sold I'd probably stay and save like mad to be able to get the property you really want in the future.

Original poster
EinyLinky · 29/08/2023 07:34

Tumbleweed101 · 29/08/2023 07:33

If you can stay there for next five years at the cheaper rate of rent without the risk of it being sold I'd probably stay and save like mad to be able to get the property you really want in the future.

Yes, I can. I can stay for as long as I would like to rent for

OP posts:
Original poster
EinyLinky · 29/08/2023 07:35

TeaKitten · 29/08/2023 07:32

Would you even be able to get a mortgage on a house with 10k worth of damp issues anyway? I’d stay renting, it’s not like you plan on living your whole life renting, you are just still saving for your deposit.

I honestly have no idea? Can you not get mortgages for homes with issues then?

OP posts:
Original poster
EinyLinky · 29/08/2023 07:35

HerProposal · 29/08/2023 07:32

Much, much better to get on the ladder with whatever you can afford than to rent.

What about losing out on first time buyer perks and "wasting" them on this property?

OP posts:
booktokbear · 29/08/2023 07:38

I think that sounds sensible op. If you can't afford what you want now and you're able to live with a cheap rent then it makes sense to save as much as you can as quickly as you can and then buy.

You're right about saving the first time buyer advantages too.

Totaly · 29/08/2023 07:39

Why can’t you get a first time buyers discount?

Also you can get a morgage if you have the funds to fix the issue.

You can open LISA with an extra 25% added on via government

You could buy and rent it out short term.

Or you could buy existing property - fix it and get a better return especially if the family member gives you a decent discount

Original poster
EinyLinky · 29/08/2023 07:41

Totaly · 29/08/2023 07:39

Why can’t you get a first time buyers discount?

Also you can get a morgage if you have the funds to fix the issue.

You can open LISA with an extra 25% added on via government

You could buy and rent it out short term.

Or you could buy existing property - fix it and get a better return especially if the family member gives you a decent discount

I just mean I'd get a better discount for a more expensive property

OP posts:
BIossomtoes · 29/08/2023 07:41

EinyLinky · 29/08/2023 07:35

I honestly have no idea? Can you not get mortgages for homes with issues then?

Show quote history

Of course you can. People do it all the time or nobody would ever buy a doer upper.

Divebar2021 · 29/08/2023 07:41

I don’t know why you wouldn’t buy where you are and fix the issue. You could save up over the next year or so given you are paying below market value on the rent.

JenWillsiam · 29/08/2023 07:43

EinyLinky · 29/08/2023 07:35

I honestly have no idea? Can you not get mortgages for homes with issues then?

Show quote history

It doesn’t sound like you could get a mortgage. In order to get a mortgage the house has to be one they could get money back by selling if need be.

JenWillsiam · 29/08/2023 07:44

BIossomtoes · 29/08/2023 07:41

Of course you can. People do it all the time or nobody would ever buy a doer upper.

Show quote history

It’s not that simple. There’s a line. A property that needs fixing up is quite different from a house that has something like subsidence. You would need a survey done.

Username1107 · 29/08/2023 07:45

Well if you can continue to stay there for cheap rent and save up for something better, I think I would be tempted to do that. Or make a decision in 5 years either way, once you have some savings behind you.

Original poster
EinyLinky · 29/08/2023 07:47

Username1107 · 29/08/2023 07:45

Well if you can continue to stay there for cheap rent and save up for something better, I think I would be tempted to do that. Or make a decision in 5 years either way, once you have some savings behind you.

I do have savings and enough to obviously get this property but yes, in 5 more years I'd have enough to go for a much better place and a place I'd ultimately want to live in for a while

OP posts:
RaininSummer · 29/08/2023 07:47

In this case I would save to buy elsewhere later as you may have trouble selling this one.

Dodgygeezer · 29/08/2023 07:48

In my experience mortgage companies require fundamental damp problems to be repaired before they'll release funds Usually this means the seller foots the bill as the property will take ages to sell otherwise

HamSandwichKiller · 29/08/2023 07:49

Save like mad. Buy yourself a nice 2 bed in a few years. Hopefully rates will have stabilised by then so you'll get a decent place. The only risk is that your current home is sold but that's pretty small if your family member has already told you that you can stay.

JC89 · 29/08/2023 07:50

It sounds like you are better off renting if your rent is cheap - buying/selling houses costs money too (estate agent fees, conveyancer fees, stamp duty, survey, actual moving costs etc).

Richmondgal · 29/08/2023 07:51

EinyLinky · 29/08/2023 07:35

I honestly have no idea? Can you not get mortgages for homes with issues then?

Show quote history

Of course you can to suggest otherwise is totally false info
you have no idea if there will be any f t b discounts available in five years
prices may have increased in five years
min five years you will be twenty percent through your mortgage term

Twiglets1 · 29/08/2023 07:51

It's not a great time to buy a property right now @EinyLinky while interest rates are so high and about to peak, and prices are falling in most areas. I would leave it for at least a year and reassess the situation then. Interest rates will be starting to fall by 2024 though they are unlikely to return to the very low rates we have been enjoying in the last few years of under 2%. They are more likely to settle around 4% for a while, but I still wouldn't get a fixed rate mortgage until they have fallen somewhat, seeing as you don't have to. As house prices aren't rising, there is no hurry.

I wouldn't buy that property anyway as it has issues and is only a 1 bed. I would wait and continue paying low rent (lucky you!) until you can afford a 2 bed or until you see a 1 bed with potential to extend come to market at a price you can afford.

BarbaraofSeville · 29/08/2023 07:52

In your situation it sounds like it's better to keep renting and save as much as you can (also make sure you have a lifetime ISA and other savings if possible, all at the best interest rate you can find).

House prices will probably stabilise/fall rather than increase over the next 2/3 years at least so while you have very cheap rent, you're probably not losing out by not buying right now, so it's good to save so you can afford to buy a property that's right for you in the longer term.

JaukiVexnoydi · 29/08/2023 07:56

In your very specific circumstances yes you are correct - continue to rent this place until you are ready to buy and for heaven's sake do not for a moment consider buying the place you are renting that has these enormous issues - fixing them will be an absolute nightmare and the real cost to fix will be more than double what you have been led to believe. Stay there and save everything you can and buy a place without serious problems when you can

Totaly · 29/08/2023 08:00

What do you pay in rent V what would the mortgage be as a starting point?

Twiglets1 · 29/08/2023 08:04

As @BarbaraofSeville points out, a Lifetime ISA (LISA) could be a good savings pot for someone in your position @EinyLinky

For evey 4k you save in a year, the Government puts in an extra 1k. You can then put the LISA towards your first home up to a maximum of a 450k property.

https://www.moneysavingexpert.com/savings/lifetime-isas/

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