Where is our incentive to buy a house?!

[pinkfishbluefish]

We are fortunate to have the option of really cheap rent (just under 600pcm). Price is fixed and will not fluctuate for at least another two years. We have a lovely little home, everything’s recently refurbished and modern. Very much a 2 up 2 down home, the rooms aren’t huge but we have two bathrooms and a large garden.
We are on average incomes that, 5 years ago wouldve bought us a 3 bed home in a nice area but we were 18 then and in no position to buy obviously! We work in the same profession and incomes are similar to that of a teacher. If we were to buy the house we are in, the mortgage repayments at current interest rates would be about £1200-1300. Over double what we pay in rent! I cannot comprehend that. We could afford it, just, but we would have significantly less disposable income and not much to save with.
To buy the same size house now we’d have to compromise on area and move away from the suburb we are in. We feel secure and can relax where we are as crime is very low. Everyone looks out for each other and works hard, there’s a real community feel and schools and amenities locally are great.

We can keep renting at this price or pay 2x the amount if we bought an identical place and in doing so have hardly anything for fun/holidays- the things that make life fun- all just to pay off a mortgage so we will own a small property of this size in 35 years time. Forget a bigger terraced house or semi. And in and amongst the horrendous repayments we’d have a bill to foot if the boiler broke, or the oven packed in. What is our incentive to buy?
Other than, as time goes on we will need a larger house than this. It does work for now and we are space savvy. We’re hoping to TTC next year and could happily afford a child within our budget but if an additional 800 from the disposable income pool were to go on a mortgage, things would be so much tighter especially when maternity leave came to an end and extortionate childcare costs kick in.

Am I missing something really obvious or is the system just not designed to help FTBs anymore? I know compromises have to be made but believe if you’re working things should be easier than this!

So you’re 24, not on the property ladder and you want to have a baby, there lies the problem. You’ve got another six years of graft ahead of you before the baby enters the equation which will give you two major advantages. First of all you have built up a nice amount of equity in your house with the repayments you’ve made. Secondly you will not been through six more years of ups and downs with your other half which point you should really know him. Thirdly you will be a more patient better parent in my experience.

My grandparents were 28 when they had the first child, and they were still living in rooms at that stage, trying to save up to buy a house. There was no question of my grandmother’s income being taken into account anyway, but it was still incredibly helpful that they’d manage to save up for a few years whilst they had two incomes.

And that really is the key.

Agree with @Justthisonce12 why do you need to have a baby now?

Save up for the next two years, buy a property when your cheap rent ends and only then TTC.

Much harder to cover rental costs out of a pension than a wage, OP.

I've given the same advice that you have, wait and see for now and save. I haven't suggested they never buy.
House prices rising hugely in excess of inflation is a recent phenomenon because of cheap credit and loose lending. There is no guarantee that this will continue. That is an assumption based on recent experience.

Fair enough but I don't think she is intending to stay in the situation forever and it isn't a binary choice between renting forever and buying right now. I suggested waiting for now (as prices come down, etc) and saving up.

I also agree about postponing the baby if you are only 24. That will massively add to your expenses unless you have free childcare and lots of support.

Renting is a pain when you have DCs, you just never know when the landlord will want you out. You may have to move them from a school or nursery that they are settled in because you can't find a rental in the catchment. Our landlord wouldn't let us paint or hang pictures so I never got to decorate a nursery for my DCs. I didn't get pets until I owned a house either as a friend of mine had to give hers up in order to secure a suitable home after she was evicted.

Two years will fly by and you are only young still. Wait until you have a house of your own.

Usually rent is more than a mortgage. Do you rent from family?

Maybe it’s because I’ve always been in the SE or London where things are more expensive but I don’t know anyone whose first mortgage was on a house. We all bought a one bedroom flat. Then maybe sold that a few years later and bought a two bedroom flat. Then sold that and bought a house, probably each time getting a little further away from the city centre. The house was, on average, the third purchase for most of us.

I would agree with Justthisonce12. Your only 23 and it's not the right time for you to have a baby. If your clever now long term it will work out far better for you.

You and your boyfriend are paying low rent. This is going to give you a great chance to save for a house deposit say over the next 2 or 3 years. Wait until you own a home before having kids. Once you have kids you won't be able to borrow as much.

Also if your renting your landlord could decide to sell the house or need it back for a family member. Then your looking for a new place to live in. Rent has gone up a lot in some areas and in some places their is very little to rent. So your then dealing with the stress of finding a place. I know people who ended up moving because of this situation and it caused them a lot of stress especially if they needed to stay in an area due to kids schools.

I know couples who saved hard for a house deposit. They had a house before getting married or having kids. I won't say it was easy saving for a house but long term they had a place to live in without worrying that the landlord could sell the house. Also they could sell house A to buy house B. Long term they were not going to be paying rent when they got to pension age.

You couldn't rent a 2 bed flat for £600 where I live. The mortgage on our 3 bed house is £700. You're very lucky that your rent is so cheap. If I were you I'd stay put for now, see where the market goes and save in the meantime. You can reevaluate in a year or two.

Are you my tenant ? We aren't planning on putting the rent up until our fix ends in a few years. You don't know what the LL is planning some might want to sell we don't. I would save and buy when house prices start falling.

If you want to start a family and having a child, I would buy.
Don't want to move with child when landlord ask you to leave with little notice time.

My rent is £400/month on a 3-bed house. I’ve zero desire to saddle myself with an enormous fluctuating debt - so when I see something I like, I’ll buy outright.

I know a few families who have bought 1 bed flat because they couldn’t afford anything else and rents were eating up their salaries and moved in with children in the bedroom and mum and dad on a sofa bed in the living room.

It was very cramped. A couple of them put a cabin in the garden so it was a place to go to watch tv or do homework or chat in private. They are all in houses now but they couldn’t have done it without stopping renting and buying what they could afford and making it work for a couple of years.
I do know someone who lives in rented and is a protected tenant and he boasts his rent is only £60 per month.

if he had bought back in the 70s he wouldn’t be paying anything now.

I once worked out the amount of money he spent compared to a mortgage if he had bought. He could have bought his flat 3 times over with the money he has spent.

The sad thing is he never got married, never had children, he got stuck in this room and wouldn’t move because everything was a little more expensive than his rent and he wasn’t being a sucker paying out on a house each month on a mortgage and giving banks your money
Girlfriends came and went as they realised their vision of happy families, 2 children and working their way up to one of the bigger houses on the road wasn’t going to happen.
The thing is I also know someone else who has also gone down this path and his gf stayed for a few years but she got to about 34 and he wouldn’t leave the rented place so they could buy somewhere and start a family so she left. Bought her own place and met someone else and the last time I heard from her they had moved out to a house in very nice village and they had 3 children together.
Her ex is still living in a one bed flat

Of course it does. inflation requires interest rates to go up x

I think for rentals this depends on how your landlord is funding the property. Those with btl mortgages are passing rate increases on or selling up when they can’t.

You sound like you have a great set up- personally I’d stay put, but might think about buying a small cheap property and renting it out, just to get on the ladder.
looks like the spring might be a good time to buy as prices are falling.

You pay £1200 for the next 25 years = £360k and then you are 50ish and mortgage free with 15 years of earning power left where you get to “save” what you don’t spend on rent or mortgage into a pension, and end up with an with an asset worth (say) £300k

or you pay £600 until at you are 85/
die (also about £360k in total) and you have no asset value at the end.

Lots of assumptions in those broad brush cals obvs to fill in gaps in the OP bit you get the idea

I am you from the future. We are buying our first house now in our 40s and I am so anxious and depressed about the fact we didn’t do it sooner. We had relatively cheap rent and didn’t want to worry about fixing things.

I regret it so much, when I add up the amount of money we’ve wasted on rent over the years I just want to cry. I wish we weren’t just getting started with a mortgage. It’s one of my biggest regrets in life.

Just to add we are buying a lovely house and are very happy about that! But I so regret not doing it sooner.

I remember my dad in 1998, pulling faces and basically saying you’re bloody mad for buying a three bed Sammy with the garage and 100 foot garden for £67,000. When I earnt 26,000. I wish I could go back in a time machine buy Next Door too

Haha @Tintime2022 my dad said exactly the same in 2004. We were living in central London and he just loved dropping by and staying overnight . Originally I was paying mates’ rates as I was friends with the estate manager’s niece. But then it started to go up year on year, we had a baby and took the lunge on a maisonette in south London. Dad was horrified we paid £199000 and told me it was a huge mistake . I popped by my old flat a couple of years ago, the rent is now £2000 pm.

If it doesn't make sense for you to buy right now then don't. But make sure you take advantage of your current situation and save lots!