To not buy a house (yet)?

[ThinkerOfThings]

Would we be unreasonable to continue renting?

We are housing association tenants and can do what we like to the house. It’s cheaper than market rent. We do have our deposit in an ISA, but even if we were to use that and buy a two bedroom property like the one we live in now, it would be around 500-700 a month more (gulp) thanks to the current rates.

It’s affordable on paper but we would have zero wiggle room for anything else and we’d be really counting the pennies with little/no disposable cash. I’d not be able to drop any hours at work after maternity leave unless I got a pay rise which is unlikely to happen in our sector. I struggle to see how that is a sensible swap given that we wouldn’t even be giving ourselves more space or a nicer area. We’d be more skint, with less space and probably in a less convenient area - but we’d be homeowners.

DH keen to buy and says if the broker thinks it’s affordable then it will be. I am a bit more hesitant as it would be right to the max of our borrowing.

There’s affordable and there’s affordable. Yes in theory you can afford it, in practice you can afford it but nothing else. That’s the difference. Home ownership comes with decorating, repairs and replacements needed. Without which life gets miserable and repairs ever more expensive the longer it’s left until you can afford it.

Obviously only you two know your life and finances and how you generally do things in life like holidays and other such expenditures. But I would probably opt to stay as you are and just continue to trickle funds into savings as you can. Things do change and perhaps opt to revisit the plan in a years time.

It’s a buyers market at the minute, you may grab yourself a bargain. Houses are not shifting in my area and are being reduced 2/3 times before selling.

However interest rates are eye watering

Its tempting to stay where you are, but consider if you will get a home cheaper due to the current financial climate, pay a couple of years of this higher interest rate and hopefully benefit as the rates stabilise.

I don’t think it will come down much, but as it does, house prices will undoubtedly rise. This is reflected in (very slight!) house price rises in the last month.