Advice on current situation - rent or buy

[BlindMelon123]

Looking for some guidance really as DH and I seem to be going round in circles. There are a lot of moving parts and I think we’re both just exhausted by the options!

We’re renting at the moment in SW London and have a toddler and one on the way (due Nov). Our landlord has given us notice as he wants to sell and we need to be out by the end of May. We’ve been trying to buy since last year but the pandemic has made that more complicated and has pushed prices up, now the market is dead. We had hoped more would come on since stamp duty was extended but unfortunately not.

We’re looking at Teddington and St Margaret’s areas for schools. Our toddler is 20 months so we’d like to be in the catchment of a good school ASAP so we can give ourselves the best shot at getting a place. I’d also like him to go to nursery in September in time for the new baby arriving, and frankly I want to feel settled. I’m also desperate to buy for that reason and also because I’m fed up of broken and grotty things that we can’t fix.

We’re conscious of the market being likely to drop when furlough ends. Another aspect is my husband is likely to receive a financial windfall in the next few years (although timing isn’t certain) which would significantly change the house we can afford. At the moment our budget is £1m currently and the ‘4 bed house with a garden that needs no work in an outstanding catchment’ just doesn’t seem to be within reach.

If I’m honest I also think we’re hesitant for lots of reasons, we’re mid 30s and haven’t bought yet (DH bought a flat years ago that turned out to be a not so good investment), we’ve saved the deposit ourselves with no family help, so our life savings, on top now we now have two kids to think about with schools and a safe place to grow up, feels like a lot of pressure to find the right place. But on the other hand we’re also spending 3.5k a month on rent and that feels like a huge waste.

I guess I’m looking for views on what we should do - keep trying to buy now before baby 2 arrives (accepting we will likely have to go into a short term rental until a house purchase completes), or rent for a year until baby 2 is past newborn stage. Or another option we haven’t considered!

I'd buy, but you are looking at very pricey areas. Do some research and look a little further afield - you don't say where you be for work. You can't plan the timings so precisely- just go in to another rental (you'll have to anyway) and keep looking, moving with a baby is hard but not impossible.
As for the windfall, as you say, it may be years, and you are spending over £40,000 a year on rent!

@Midlifephoenix
Thank you for your kind reply, yes the areas are really pricey and it feels like we’re already priced out compared to what we could afford last year. We actually just missed out on a house in teddington that we offered £10k over asking price for and it went for £50k over after sealed bids, so now we’re feeling complete despair and like there’s no chance of us finding a house there now!

My husband will be working centrally once his office reopens. We’ve considered further out in cobham, Marlow/cookham, henley, but they’re areas we have no real attachment to and don’t know well at all. Our family live hours from London so not an option to move closer to them. The great schools also seem to be much fewer and far between in those places, and the thought of starting our search again with a new area is quite daunting tbh. I agree we will have to rent. I just really want us to rent somewhere that we would eventually buy so that I can get our toddler into a nursery and some classes before the baby arrives.

I’m hoping the spring market might refresh things on the house front, but as you say perhaps we need to look further afield.

If you can’t afford the 4 bed OP, get the 3 bed. Lower your expectations a bit and just get on the ladder ASAP!!

@SandysMam thank you! That’s our plan now, three bed will be good enough for now