Buy or rent or just procrastinate forever

[BetteDavis01]

Hello all, I'm hoping for some advice and a fresh perspective as DH and I are driving ourselves mad and cannot decide what to do for the best.

We are currently renting a house but were hoping to buy ourselves a family home to live in; however prices where we live have gone crazy and the sort of houses that we like and need, have shot up in price by about 60k in a year! It's crazy.

So......this is our dilemma. What do we do?

1. Buy a house now and have a massive mortgage that will scare the crap out of us

1. Just carry on renting and leave our deposit sitting in the bank.

1. Buy a cheaper property in a different area and rent it out; whilst continuing to rent ourselves.

These are the only options I can think of, but I would really appreciate your advice/ input because we are making ourselves feel a bit ill with all the indecision.

To complicate matters my eldest DC starts infant school in Sept; so we are established in our current area; plus it's where we grew up and our family/ friends are here.

Thank you for reading. If you can offer advice please do.

TBH I'd suggest sticking with renting for at least the next two years.
Invest the deposit money carefully - but not in property - and keep adding to it if you can.

THe UK housing market is holding its breath at the moment.
You are in a good place if you can watch and wait
BUT
keep an eye on the market as there are still bargains out there - generally needing work.

Gosh I hope you are right! I'm so worried that we have missed our chance to buy round our way, but then another part of me says that for a house to increase in price by 60k in a year is absolute madness.

What a nightmare!

Whereabouts are you?

SE London / Kent border

In that case sit tight.
After the next election, whoever wins, steps will be taken to pop the bubble of speculative investment in London property.
Out round Bromley distance it will result in some really good bargains IMHO

Hi Bette, we were in your situation until very recently. We have been renting for years as we couldn't afford to buy and prices where we are have shot up massively in the last few years. We had saved a 10% deposit, which took us nearly 10 years, plus stamp duty and solicitors fees. Our landlord served us notice on our rental just before Christmas, so we had to make that decision too. We looked at other rentals where we are, but they ranged from 1200 a month to 1500 a month for a 3 bed. In the end we bought somewhere. We found a decent sized ex-local authority house round the corner, much bigger than our rental we were in and we decided to take the plunge. Our mortgage is about the same as our rent would have been and we were terrified to make the commitment, but we have fixed for 5 years. We are not planning on moving any time soon and we are really happy now. I know houses are over priced and there will be probably be a correction, but I could not go on like we had been for years, with the instability of renting with 3 dc and schools to consider. I'm glad we've bought now. I know rates will rise, but as we've fixed, we know what we're paying for 5 years and in 2019, we'll hopefully be earning more and will have paid off 5 years worth of mortgage. I don't what the answers are. The UK housing market is screwed, but good luck with what ever you decide.

TBH - I'm not sure whether the bubble around London (or even just the South) will ever burst. People have been saying that for YEARS… and nothing ever happened really...

Are your jobs secure? Are you in line for pay rises or promotions in the near future? Do you have adequate "rainy day" savings and insurances? It's tricky to say whether the SE is a bubble or not, and London is an international housing market so international appeal is as important as national conditions.

Remember as house prices / interest goes up so will rent.

I was in your position many years ago buying my first house.
I waited and watched the house I wanted. the price dropped and then dropped again to almost half the original price and I pounced.
7 years later I sold it for the price that it had originally been up for and had I paid that price I wouldn't have made a penny.
just be careful of getting a mortgage that scares the crap out of you.

What is your family income and what is the price range of the type of house you want?

Chicken
This house www.rightmove.co.uk/property-for-sale/property-45785633.html
is a pretty basic family home on the SE London / Kent Boundary

and its WAY beyond my buying power !

Check out somewhere like Bexleyheath and it would be 100k less.

I think Most people feel like you when they buy their family home OP, it's such a big thing. I'd go for it unless the mortgage takes up a stupid amount of monthly salary. Have you looked at having the mortgage over a longer term to make repayments more affordable?

True.
The less trendy the name, the better the prices. Erith or Barnehurst or Welling or Belvedere or Welling around Danson Park
just stay outside of the Kent school system if you can!

I was a lucky one who passed my 11 plus living in Bexley.

I agree with TalkinPeace. I will tell you what I did if it helps. DH and are are both 32 (DH) 33 me. We have 3 DC DD1 6 1/2 DD2 3 and DD3 1 we bought our flat only 2 years ago in a south after location in SW for 250k cash. We saved £1600 per month for 10 years, living off one salary, plus work bonuses and a second job for DH at Tesco in the night and me earning extra writing students dissertations ( yes it wrong) but at £1000 a pop was good money ( no time to do that now) we lived in a house share basically occupying 2 bed rooms for all of our marriage life to get a good deposit for a house in the same area. We invested the money, put 80k away with NatWest for 4 years in 2007 and gained an extra 12k in interest (that rate has gone now) and invested some in children accounts 25k in each account for 3%. We resisted the temptation to buy earlier with a mortgage, despite prices going up, we remained firm in our saving. Then we had £264k saved up we were offered a mortgage of £650k plus our deposit which meant we could buy a nice house with good catchments for around 900k. We then looked at flats and missed out on a 2 bed flat for £180k on one of the most sought after roads in the area but found a lovely garden flat for £250k needed work but the potential. We went for it. Fits our family we have a bigger garden than friends with houses and much more space. Sorry for the long post but it was meant to just save, keep renting, move to a cheaper rental if possible, save the money, you might just find soon you can purchase a smaller property outright. We love the fact we can educate our 3DC privately 1 in school and 2 in private nursery and 4th on the way because we have good careers and no mortgage worries. Our flat has been valued 2.5 times what we bought it for. Scale down your your wants and you can get something well within your budget. Our home is not our dream home, in our dream area but not our dream home, but it works for us. FWIW friends laughed at us for renting for so long, but some bought at high prices and with interest only payments are still struggling. Our story is not unique. We met at uni, then lived like students even after DD1 and 2 came just to save save save. 3 jobs between us. So worth it.