What can we do?

[DMC6274]

First off, I just want to say I'm well aware it's our own fault we are in this situation and we've been irresponsible!

My husband and I are in our early 30s. I was always told I couldn't have children and I guess that gave us a very care free attitude. Despite both having good jobs, we never saved. We've always lived within our means, don't use credit cards or anything but we've always spent all of our disposable income. Mostly on holidays and travelling. We were never particularly bothered about owning a home, we've rented our house for 4 years now but always thought it was good that we could move if we needed to as we had no ties. Talked about moving abroad many times.

Then miraculously I got pregnant with our baby who is now 6 months old. Suddenly we are in this situation where I'm very aware we have no financial security and I feel like the most irresponsible parent in the world that we are in this situation. I never cared when it was just us, but it's totally different now.

So our first priority is buying a house. I'm aware our landlord wants to sell, he asked when I was pregnant if we wanted to buy but we don't have the deposit. We are currently in contract until next January (2025) and then he wants to sell. I've calculated we can save enough for a deposit by January 2026. He offered for us to buy it at under market value, he's a lovely man but honestly a bit lazy! We pay significantly less rent than similar houses in the area, he's never been fussed as we are good tenants and he seems to very much want an easy life. So one option is to ask him to extend for another year but agree that we will then buy it in January 2026. I don't know if he would agree to this as he definitely wants to sell next year, but we could offer to pay more?

The only thing is this isn't where we want to live in the very long term. It's fine for primary schools but we'd need to move before our little one goes to high school. It also needs quite a bit of updating. In an ideal world this definitely wouldn't be the house I'd choose to buy, but it does seem like our easiest option if he agrees.

If we don't choose that option, or the landlord doesn't agree, it will become much harder for us to be in a position to buy in January 2026. The money we are currently able to save for a deposit would be swallowed up by the extra rent we would be paying if we moved to a similar house in the area.

In this case, my husband suggested we rent in a cheaper area for a year so we can continue to save. This would be away from all our family and friends and in a not very nice area about 40 miles away. But our little one won't be in school yet, and it would mean in 2026 we could buy a house we actually wanted in the area we want (5 miles from where we live currently).

Sorry this is so long and I've rambled, but what I'm essentially asking is in our position would you:

A. Do everything we can to get our landlord to extend our rental agreement for a year and buy our current house, with a view to selling it in within 5-10 years and moving to the next town where we want to live long term

B. Have a crappy year renting in an area we don't want to live, away from our support network, but meaning we can buy in the area we want in 2 years time

C. Stop stressing about it so much and just rent somewhere in the place we want to live next year, but accept we will be nearly 40 by the time we could buy a house as it would take longer to save

Thank you if you've read all this!

Sorry just to add if it makes a difference, we both work from home so commuting isn't a factor

B

I’d do the crappy year renting elsewhere because a) your landlord could get a better offer and b) selling after 5-10 years costs a lot of money in stamp duty and moving fees providing you aren’t in somewhere cheap and undesirable

Well you've got nothing to lose by exploring option A. You would save money by not having to move too. If your landlord is lazy it may be easier for him as well and selling takes time and is a pain in the neck. Maybe email him and list all the plusses of selling to you in the future. No agents fees for him either and that's several thousand. I wouldn't pay over market rate though.

I'd try option A first, you might have a totally different idea of where you want to live in 5-10 years!

I have sold to tenants before as a LL and it is great from a LL point of view as you don't have an empty property for months whilst it is being sold, and as the market is slow right now there is much in your favour.
If you want to stay or feel it is a good investment as it is good value (do your research ) and can be improved adding value, then l would negotiate with your LL
Do it up yourselves and look to move on later, this is a good time to be a buyer.
Think carefully how to present this to your LL, l suggest a ton of research of similar properties, look at Sold prices (not asking prices ) on Rightmove for similar properties.
Really look carefully at size, location, condition..everything that has sold within a couple of miles over the last year.
Work out the value of your house yourselves first, then have a couple of EAs around to value. You need to still do your research as EAs want business so can be overly optimistic on value.
Once the value is established consider that he won't need to pay an estate agent @ around 2.5 % plus vat so take that off the value.

Get to an independent mortgage advisor,( L and C are good,) see how much you can borrow, and what deposit you will need, don't forget stamp duty and solicitors fees.

Work out how to raise that amount fast, second jobs maybe? Loans perhaps? family loan?...once you have looked at all options make a formal written offer to the LL with your timescale to buy. Offer amount, etc.
Good luck

If the landlord won't agree to the extension, then option B sounds like a reasonable option it's only for a year.

Could you live as frugally as possible and even take on extra work to boost your deposit? Also look into opening a LISA each. soon as I think they need to be open for a year before they can be used to buy a house.

As you are paying less than the going rate for your house I'd go with A.

High schools change and improve - especially across a decade. I would go for A

A

A. As it's under market rate, you could explore borrowing the deposit short fall. As you are first time buyers and under 40, You may want to use a LISA (a no brainier IMO) to help save.

Good Luck.

Pension planning next... The fun never stops as you get older ...,

Thank you so much for all the replies. As a few have pointed out, we don't have anything to lose by trying option A so we've asked the landlord if he's free for a chat tomorrow.

Worst case scenario he says no and then will look at option B. Really appreciate all the advice!

This is so so helpful, thank you!

Yes we've opened LISAs and a cash ISA each as well for anything over the 4k allowance.

The mortgage when we buy will be more than we currently pay in rent, so we want to avoid borrowing the deposit if possible but if we absolutely have to then it's an option. Thank you!

I would go for option A initially. Moving away from your support network when you have a young child does not sound a great option but if it is not too far away and means you buying in your preferred area in 2026 then option B as a second option.

A

we bought our first house from our landlord and it was breeze, no viewings, no messing about with estate agents, no packing, no stressful moving day.

if you would be happy living there for 5-10 years I’d defo go for that option if you can persuade him to hang on