Objective advice needed - renting/buying

[Talktome123]

Have NC as don't want anyone to recognise me! We really need some objective advice on a dilemma.

Background: me, DH and our 5 kids. Live with my Mum paying our way, all is good, everyone is happy. DH works abroad. Looking to move out, it's only fair my Mum gets her own space, and she is debating downsizing.

We can't get a mortgage - been to all brokers including those specialist in expat mortgages. DH's line of employment not acceptable as apparently too high risk of "escaping jurisdiction" ie buggering off to a country where he couldn't be pursued for debt. Ironically, when we lived abroad, we bought and sold 2 properties there with no problem, I think the problem this time is that any property in the UK wouldn't be his primary residence.

Option 1: using savings, a loan against his pension pot, as a loan from ILs, buy a place. BUT, given the market in our area we only have the budget for a tiny 3 bed terrace which is too small, with no room for extension, expansion or loft conversion. Also would have to buy in an area inconvenient for schools, kids in 2 different schools, and not on any school bus routes, logistically difficult, and I have to do it all myself.

Option 2: a house to rent had come up opposite the school where 3 of the kids go. Stable rental, owners looking for long term tenants. Great house and perfect size and location. If we were to rent the place, we would use some savings to fund an investment property (potentially to use in the future when kids have left school etc), in a totally different part of the country which is much cheaper - location tbd.

So, which option would you choose?

Option 2. I think day to day practicality when you are on your own for long spells with 5 children must be your priority.

There's a choice? Option 2, no contest

option 2!! You have a longer-term plan, it suits your needs now...where's the issue?

Are you an only child Talktome?
If it wouldn't fall foul of any siblings you could try renting a small place for your mother and you all stay where you are, see how that works out.
Obviously making it balanced financially with your mother.
That could be a third option.

Otherwise Option 2. Would that be mortgage free? You'd need to choose wisely for best investment return.

Yes I am an only child! How did you guess?!

I think the problem is we're in Greater London, so anything we were to buy here would be a good buy. The neighbourhoods are all extremely popular around our way, and there is a lack of properties on the market. Combined with plenty of families and investors looking, it is keeping the market good, but not as overly crazy as other parts of London.

Another option would be to buy here, see how we go living in it and possibly rent it out after a few years and rent bigger for ourselves.

Hen - my Mum came up with the idea of us buying her out partially and then with the money, get the house extended, and all live in it together. In the end, when we studied the possibilities for extension, we realised we couldn't do what we really needed.

Anyway, thanks for the responses! I really thought everyone would say to buy at all costs, it's given me real food for thought! We're giving it a good long consideration....

Yes I am an only child! How did you guess

Thought you probably were but that idea wouldn't work if you had a large birth family I don't think.
I am Hen eye five, it's my job to know these things

Food for thought is very good, sometimes you need a creative solution.