About buying or renting

[HAhome]

Would you buy a house soon in this situation. Housing association property, cheap rent and was brand new when we moved in in sought after location.

House prices seem high currently, we were househunting then stopped. We have been given an agreement in principle for a mortgage but the only properties we can find to buy would have very expensive monthly repayments thanks to interest rates and we don’t have a huge deposit. The monthly repayments would be about 25-30% of our combined income - closer to thirty percent if anything.

Me and my husband earn equally, average salaries but by no means high.

We are planning to have a baby soon and trying to get our heads around what a budget for that might look like. In our current home with lower outgoings we could afford me having a longer maternity leave and to not be as worried about cash generally.

If we bought a house soon we would be paying at least £500 more a month than what we pay now, which feels like a big chunk (basically all of SMP after tax, right?)

We don’t want to stitch ourselves up just to actually be more skint at a time when we could do with the funds. After having a baby I hope to be able to go back to work full time or close to, and DH is on track for a promotion in the next couple of years which will increase our income.

AIBU to stick deposit in a LISA type account and just chip away at it?

I probably wouldn't. We owned a house which we sold just before property prices collapsed. We are now happily renting. We could afford a mortgage but renting allows us more flexibility and no financial commitments (our previous house was a constant money drain with all the things that needed fixing). We are going to wait until the situation is clearer with the mortgage rates, inflation and likely long-term outlook with COL crisis.
If we had an LA/HA rent, we would be even more comfortable taking our time to figure out the next step.

Thank you! That sounds like a disaster. I suppose the responsibility of being a homeowner doesn’t end with the mortgage, it’s everything else to do with the house which we don’t even have to think about in our current situation. It sounds like you’re doing the right thing.

Personally yes I would, but it depends on so many factors. Rates are a bit lower now but that depends on you having a decent deposit, which you say you don't really. Age - if you're 21 I'd prioritise the house, if you're 41 I'd prioritise the baby obviously. My concern would be that once you have a baby your focus shifts. You say now you'd go back FT, but with the cost of childcare maybe you'd change your mind. If you're worried about costs now you'll probably be even less confident of affordability once you have a child to consider. So if you don't buy now you might never do it (disclaimer - I don't know much about HA, if you're happy to stay there long term then fine, can't see why you wouldn't)

Stay where you are save in an LISA or an ISA why move from a nice new house in a good area
just to say you own something which comes with a host of added expense.

This is my thinking, I don’t want to sacrifice a nice area and move to somewhere unsafe or inconvenient just for the sake of saying we own it

I rented to keep costs as static as possible before my DD finished nursery. After that, costs are more manageable. That's just my experience as a (now) single Mum.

Have now bought a house and she's 7, and we can easily afford £1k per quarter three times a year for breakfast and after school club instead of £1200/£1300 per month on nursery but this depends on if you are opting for full time care.

Just what I did....and it wouldn't have worked the other way round.

Once your child has born you become part of a local community and network. When you buy a house if you are going to be buying in a cheaper area, you might need to start to build that network again. Not necessarily a problem (lots of people do it) but in your shoes I would try to move before reception/ year 1 so you have plenty of time to meet new families when your dc starts school.

HA flats are like gold dust. If I was you I would stay there, save, save, save and invest your money (maybe in property, or maybe in something else) when you can.

Precisely a home is a home and you are not at the mercy of a private landlord selling up so I wouldn’t worry. Enjoy your home and new baby.

As others have said, I'd stay where you're happy and where your outgoings are predictable. I would save hard though - all that money you'd have spent on increased housing costs, put it in savings.

Then when your kid is older and childcare costs go down you've got a pot of money, you've still got a stable home, and you decide then how you want things to look wrt home, job and schools.

This sounds like our situation too. You don’t often hear of people doing things your/our way round so it’s good to hear it worked for you.

A lot of it depends on your age tbh and whether time is on your side. Myself and my DP bought our house in 2022 (both our late 30's) when we were in a good position salary wise and a deposit, paying very little in childcare as my youngest in school. We knew we wanted a baby of our own, but were advised by the mortgage advisor to get the mortgage first, as once you're stuck paying insane childcare fees for years you have no chance of getting a mortgage then, especially not on average salaries!

Newsflash, you can never really afford kids, nobody can, but you get by and cut back where you can to make it work.

That’s true. I was more thinking of the timing given our HA home is secure and won’t be sold from under us

We can definitely save where we are. With a mortgage right now we’d have no chance