Totally confused about whether I should buy?

[confusedftb]

I want to do the sensible thing but I just don’t know what that is! Single, no children.

I am a professional with good job security, but not a huge amount of savings. Deposit and moving expenses would eat up all my savings.

I live in a flat that is costing me £580pcm with bills included. This is a very good deal and I am living comfortably within my means, saving about £500pcm.

I want to buy, but prices have shot up in my area mainly due to lack of supply. 2 bed houses that would have been £170 just last summer now on the market at £210 (the cheapest price point available where I live).

I don’t know whether to buy? I could just about afford to at about 200-210k, but I will be significantly worse off each month because mortgage payments will be about £700 per month and I will have energy bills and higher council tax plus house maintenance and insurance etc to think about too.

It feels silly to buy when I can be living so much more cheaply and saving while I rent.

But if house prices get any higher I will get priced out.

I am also 37 and so not young - I probably need to get on the housing ladder sooner rather then later.

What would you do in my shoes?

I would buy because renting as a pensioner is going to be shit. We hope to buy in the next few years for this reason.

I'm the same age as you, but married with DCs, so much harder as need a bigger home and have less money to save. Still trying desperately to manage it though!

I think you need to get on the ladder sooner rather than later. You could always rent out a room, even mon-fri, to help with costs.

Okay, this is helpful. Thank you!
I’ve been finding the rocketing prices and talk about energy bills and recession etc so scary it made me question whether buying at the max I can afford is a bad idea.
But it sounds like it’s still better than renting.

You will be worse off initially, but you can remortgage when you have more equity at a lower rate which brings costs down plus once you’ve paid the mortgage off you will be a lot more comfortable than renting as a pensioner.

I would buy. The difference between your rent and the mortgage payment is affordable based on your savings, and since rents go up you will be surprised how soon this difference disappears.

Obviously I am assuming that you are happy and settled in your area and plan to remain there.

Yes, think 20-30 years ahead. A mortgage paid off and a house or flat you own with 2 beds (even if the same property) will be a very good investment and make your retirement a much more positive prospect.

You have at least 30 years until retirement, did you calculate the mortgage over 30 years or 25?

Its better to buy if you can in my opinion, and you sound like you can. You can always get a lodger to help with the income

Imagine if your landlord suddenly puts rent prices up, which happens a lot round here. Rental prices are about £500/month more for 2 bed place than they were a few years ago. So then that’d be the worst of both worlds.

Rent is lost money whereas with a mortgage, assuming it's a repayment mortgage, you'll be paying down the mortgage. I'd buy.

Thanks everyone. I calculated a 30 year mortgage.

TBH I am not totally sure I will stay where I am living now forever, it’s quite possible I will want to move closer to my mum in 5-10 years when she becomes more elderly. But that’s a bridge to cross later on I think.

All being well our mortgage is paid off next year (I think), we have some other debts but we would have to put those on a card or something.

But the freedom of being mortgage free way before retirement is a relief

Buy before interest rates rise more. Also get a lodger if you want to save even more and you're single.

You'll be worse off buying a house initially. There's a lot more cost to home ownership than the mortgage, I.e. repairs, maintenance, insurances etc that you don't need to bother with when renting.

You say you're saving about £500pm at the moment. Work out how much of the £700 mortgage payment is interest and the rest is still the equivalent "savings".

I had a great rental / house sitting deal for years, and it definitely wasn't dead money as I invested wisely, then bought a house with a 60% deposit. Ultimately it wasn't a financial decision to buy, but a decision around security, feeling at "home", and emotional well being.

In summary it's OK to rent if you can save/invest enough to pay off most of your mortgage by retirement. If not, buy.

I would buy a property now while you’re still young and get on the property ladder.

Your savings each month are way less than the increase in property price, so you will never in any way be better off by saving cash instead of owning property.