Would you buy if you were me?

[Psychgrad]

Some back story… dh and I are mid thirties, first time buyers and plan to have a baby next year.
We both have ties to London (non negotiable) for at least 4 years due to our jobs.

We have a lovely flat in a nice part of zone 2 that we rent now but the lease is up in February and rent will increase by ALOT by then (they’ve told us). Anyway, we have dogs and want a larger property with garden for more space when baby comes etc.

We recently decided to buy, have our AIP etc, our thinking was that it would be better than renting in the long run and even with inflation rising, buying is cheaper than renting.

my dilemma is.. I’m not sure I want to be in london for much longer, as I said we are tied here for a least 4 years but I’m just not excited about property here, we seem to be only able to afford small, cramped spaces on busy roads, in crap areas, even further out in zone 6 we could definitely get more for our money but then it’s the long commute and the costs of transport you have to factor in. We’ve also thought about moving out to essex or kent and commuting in but I’m thinking would it not be best to buy within london in the hope of making a profit in a few years? I realise it might not work out like that due to the current market but wouldn’t the properties in london do better than kent or essex?

We’re both from Dublin and want to move to the outskirts of there, close to the sea when we are finished with London. I feel impatient but I know it’s likely better to buy now as house prices are coming down. We viewed a property yesterday that was 400k in feb and now it’s reduced to 325k. It was also on the Elizabeth line so I can only imagine the value going back up in time?

So my question is, would you buy or just keep renting for the remaining few years? I say we’re here for 4 years but when you factor in time spent looking for properties/ selling with baby in tow we’re likely looking at 5 or 6 more years here. If we don’t buy now and wait four years, we’d be in our 40’s by the time we get around to buying our first home.

How do you get excited about buying properties in areas you don’t particularly like in a city you are becoming tired of?

@Psychgrad It's going to be a struggle to leave Melbourne. I love living here, and my only regret is not coming back sooner.

@Fooksticks do you have to leave?

Thanks so much for the advice here!

I really don't know, honestly.

If you were planning to stay for say 7 years or more, I'd certainly say buy.

If you were planning to stay for a couple of years, I'd certainly say rent.

Four years is very much somewhere in the grey area where it's difficult to weigh up a number of conflicting financial and non-financial considerations. The one-off fixed costs of buying [stamp duty, fees, removals, etc] are not to be easily dismissed. In your shoes I'd look long and hard at the numbers, work out what a few plausible increases or decreases to rents/interest rates/house prices etc would do to your calculations.

In this market, I’m not sure you would make much profit in 4/5 years. Ignore posts about how much profit people made in the last few years. We are in a different era now. I wouldn’t continue renting though. I’d either buy in London and consider the possibility of having to stay 7-10 years to make a profit or buy in Dublin now and rent it out whilst continuing to rent in London.

I’d been looking less whether you’d be making a profit and more as to whether you’d be making a loss.

In my mind, removal costs to grand you’ve got to alive for at least two of those in a four year period. We actually had four and a four year period.

Additionally you there might have to pay storage because some of your stuff doesn’t fit in the new flat or house.
Then of course the Will you won’t to get your deposit back so you’ll need the cash flow to circumvent that plus you end up using your bloody holiday to move.

And then on top of that, you’ve got your £96 grand in rent.

equally, I would also move to Melbourne immediately, if not sooner and stay there.

I’m assuming you’re a med student? If your partner is already qualified, the hospital will sponsor you, and will pay him such a large amount of money that it might cover your foreign student fees. My daughter was born in Melbourne and she’s doing medicine and I have pulled my hair out trying to explain to her that yes you will pay $30,000 upfront per year, but you will earn so much more money when you graduate and you’d be paying £9000 so what’s that $15,000 as a domestic student here anyway. As long as your partner or husband is being paid an additional £25,000 ($45,000) to cover whatever you would get in Student Finance loans, with the emphasis on loans, so it’s not like it’s free money, which he most certainly will be. You’re actually at the same Financial point, but my goodness your lifestyle will be better.
And if your husband or partner is already a qualified doctor He can pretty much negotiate whatever terms he needs to make it work.

We bought a flat in Zone 3 in 2019, fully knowing we'd only want to live there a few years. We sold late 2022 and I was surprised how much we had in equity for a deposit on our next house - we did do some renovations and sold for more but this was about the amount we'd spent on renovations. I'd be cautious of leasehold with a private company, ours was council leasehold which was fine. At the moment, I wouldn't rely on making a profit but you will have those years of mortgage payments which will build up equity.

Oh, and we weren't that excited when we bought our flat, but we tried to find the best we could in an area we liked enough. We just kept in mind it was short term.

I think you need to decide whether space trumps zone 2 location. We went for space.

We moved out to Hertfordshire and loved the garden and 4 bed detached house we got for a 2 bed flat in zone 2.

We now find ourselves in Berkshire - I bloody love the Lizzie line - if you buy on this line it should hold or increase its value

Agree re the Elizabeth line
There was a pp who lives out of reading the other way which has a massive effect on travel time.

If you lived in twyford or Maidenhead close to the station it would significantly change things. Or even caversham where you can pretty much walk to reading station.

Would it be cheeky to offer 25% under offer if there’s a bit of work to do? Nothing crazy but it needs a new shower tray and painting throughout. It sold for 248k in 2011 and now they’re asking for 325k. It’s on a main road but in a nice are with good schools. It’s only on the market 3 weeks. It’s also share of freehold (50%) and is a 2 bed ground floor flat with private, direct access garden. I don’t want the agents to think we’re not serious. The upstairs flat have a baby so potential issues with noise but that could happen anywhere, cities will always be noisy, we have dogs so will also be noisy.

Ah it’s too cheeky isn’t it, maybe 15%.

Work out what the work would cost and offer the asking less that amount.

The price sounds fair minus the cost of shower tray work. A 25% or 15% reduction is taking the biscuit.

And they would be mad to accept it.

Happy that it sounds like you are now set on buying Op, as you would be mad not to. 4 years mortgage is better than 4 years rent and who knows, you may stay in the home longer.

Yeah I agree. Definitely better to buy. Was just reading that apparently it wasn’t uncommon to offer below 10% even when the climate was good.

Do your due diligence, look at sold prices in the area then you can work out if they are taking the mick with £325k

Would be worth seeing if there are any houses for a similar price in the area. Buy a house that needs doing up then sell on.

Buy a house in Dublin and rent it out?

Their asking price is what they think their house is worth. It is not priced to reflect what others think it’s worth. Look at sold prices on Land Registry in the immediate surrounding area (there’s a 3-6 month lag) and offer what you think it’s worth, not what the % reduction is from their finger in the air asking price

Yes 25% below is too cheeky.

The EA will have taken the condition of the property into account when they valued it.

Were you reading that on here, though? People always suggest it but most sellers will just dismiss you as not being a serious or trustworthy buyer.

@GoodChat i read it somewhere when I was Googling but saw it here too.

You need to buy in an area that has great primary schools.

In London (perhaps more than other places) there are motivated sellers, so if you're truly worried about overpaying and not fixed on one area you could let quite a few agents know that you're looking for a lower price for faster completion and leverage your chain free status?

That’s good to know @BigGreen thank you