Opinions about buying now or waiting

[wendyredredrobin]

I'm fed up of being in rented - 15 months now and was meant to be temporary. A house has come up which looks ok and has a bit of potential for extension etc. We have been waiting 15 months for a house to come up in the catchment area which we like - they just haven't!! We are picky i.e. no main road, detached, 4 beds etc and there aren't that many of that type of house in our town, lots of semis and lots of main roads.
We are arranging a viewing - if we like it should we buy?

In the long term renting is dead money no matter which staistics you look at.

There is no doubt house prices will rise again one day and as long as you view your house as a long term investment then its not throwing money down the drain

Renting is definitely not dead money in this market. We pay £1k a month to rent so £12k last year. We are looking at houses in the region of £700k which dropped 20 per cent in value i.e £140k.

We're quids in. renting is financially sensible at the moment and anyone who jumps into the market now on the back of the estate agents hyping the glitch in the figres last month is bonkers unless they've negotiated a really good deal.

As I said it depends when you buy, why pay £250,000 and the interest on that when you can be paying £150k and the interest on that amount instead. The difference is £500 per month, £6k per year.
Shares have always out performed property so renting your home and putting the difference between the rent and the repayment mortgage into shares would be a better long term plan, however most do not have the discipline required to do that, myself included.

I spoke to an agent yesterday who told me property prices have stopped falling and in fact increased slightly last month! She maintains I will not get a better deal than NOW! and did I want to offer on a house I saw last week!

Hmmm lets think Jampot why would an estate agent say that

Don't buy now. I saved a fortune in 1991 and got a house instead of a flat. Then my mate five months later got a bigger place with garden for the same price as mine. The market kept falling for about 2 years and that wasn't a full blown out recession. Just sit tight, summer is around the corner and you can go out more.
Oh! Estate agents One lot on a new Estate were doing wine and cheese and it was lovely wine and cheese so I sat there with them going on and on. When I got up to leave they were begging me to buy. I said NO thank you and tried to leave this bloke stopped me and was really really rude. I can't remember what he said now as I was to squiffy. But not squiffy enough to sign on the dotted line or not remember what he had said or his name. Wrote to the boss and an got apology and flowers

It's quite funny; they all leap on last month's Halifax figures (which were contradicted by the Nationwide ones for the same month and, er, all the others too, but never mind that...) and start ramping like hell, then when the bad news comes in again they say "Well it can't get any worse now! About to go up any day!"

Can't really blame them - so many are losing their jobs now.

We rented for 15 months at 1k a month.In that time we made about 20k in interest on our sale money and the house we bought went down bi 125k renting is v wise atm.

Loved that little graph!

Yes the reality is WHEN 'activity' results in 'sales' house prices might rise. At the mo the market may be being stimulated by wildly low interest rates- but you can bet your maternity knickers that won't last long as it's an artificial situation dreamt up by a flailing government trying to 'stimulate the economy'.

For us the issue is no-one's selling where we want to buy! We have 300K sitting in a (fortunately) overseas bank account just waiting to be spent on a house in catchment but the catchment in question isn't 'bonus-land' or 'first-time buyer in trouble' land - and only marginally London commutable, so most folks can afford to stay put.

I DO fear the Private Parents onslaught so we think we may 'take the hit' and pay too much now rather than wait til there's nothing left to choose from!

There's another issue or 2 about selling your house then renting, putting the 'excess' in an account waiting to pounce when houses have 'bottomed':

You need to put your cash in an account that earns sensible interest but is very accessible. Good luck!

Generally you get 6 month tenancy, then it becomes short term, month by month. You get precisely 60 days security. Balance THAT against local schools, work, Cubs, friends etc.

One reason there are so many rentals out there are people who've tried to sell but failed but who may well sell for whatever they can get in 6 months time- and not maybe to YOU if you've 'traded up' in your choice of property, thus you'll be out on your ear!

3 monthly inspections by some pimply youth.

The fact you may not be able to rent what you want as your salary only is taken into account thus you, like us, may be sitting on 300K in the bank but that counts for nothing against your salary which will dictate how much you are deemed capable of paying each month!

Appalling colour schemes.

Second class citizenship as a tenant.

So not perhaps when weighed up, quite such a great idea!

kayspace, what kind of rental arrangement are you describing?
Not that grim, is it?

Well, I rented for 25 years and never regretted it once.

Renting a house for 50% of the cost of an interest only mortgage for the last 10 years and not having to pay for repairs insurance etc and being able to move when and where I liked was a big advantage.

Now my firends who almost all own houses really envy me that I am not losing money hand over fist while they are terrified they will lose their job and be repossessed.

I will buy when owning a home is cheaper than renting. Not quite there yet though.

I'm describing a typical 'short term tenancy agreement' that most modern private tenants hold (80% I believe). Typically it starts with a fixed period (either 6 months or a year) then becomes month by month in that the landlord has to give the tenant 60 days notice to quit, a tenant has to give 30 days.

Whilst your reasons for buying v. renting appear to be based purely on finance (which is of course completely fair enough!), I am merely pointing out the pitfalls of renting. I mean, would your home-owner friends envy you quite so much if you were suddenly served notice? Or your landlord suddenly became remiss about repairs? Or took you to court over stains on the carpet? Or your credit rating not being as water tight as theirs, being a 'feckless tenant'?!! You can lose your job, thus your rental home just the same as they can. Note the government hasn't made a provision for leniency from landlords towards struggling tenants like it is insisting upon from mortgage lenders!

A point you make which I think raises issues: IF a person is heaving a sigh of relief in paying rental equivalent to '50% of the cost of an interest only mortgage' perhaps they're they sort who should've been spending the last 5 years lobbying the government for a better deal for tenants (like the 'European model') rather than ATTEMPTING to buy property privately! I know you're not suggesting 'interest only' is a good mortgage idea (if it ever was as a long term proposition!) but THAT strategy is partly what's lead to the housing market situation we now see!

Ime I've never found a place where a repaiment mortgage was more expensive than a rent. maybe it depends on location. the problem with renting is that you could be asked to move at the owner's will, which is a real pain when single but cannot think of it with a family.
for me owning is always a winner.

Owning your place is nice, there is no doubt.
The deal has to be right, thought.
Which it isn't at the moment.

DamonBradleylovesPippi

I have no idea where you have been living - but I have never seen interest only or repayment mortgages cheaper than rent over the last ten years once you factor in the other costs.

Blimey you lot! Went to view today. Well the house, which is in catchment btw, was lovely. Price is good - would have been 50K more at peak I think.
I agree with you all - I agree! House prices will go further down. Possibly lots further. But there is a shortage of 4 bed detached houses in the town I want to buy in, and I am very very picky. So this one is the first house i have wanted to buy for SIX months. And I am SO SO MISERABLE in my rented house. Not just house just renting. And I have to weigh up that this is my life, and it is precious, and move on and be happy. I'm just not a renting person. I remember the feeling when I got the keys of my own house 10 years ago, being a student for 5 years and renting. I have never known happiness like it.
So I think we'll offer on it. We did well from our house sale a year ago, now it's time to move on. The mortgage will be approx £200 less than our rent is now which will be great, and hopefully the gas bills will be less (we spent £150 on gas in January!!!!!)
Thanks for all your words of wisdom, it is much appreciated.
Keep you informed.

Yes, I think the feeling of being The Owner is very important and I agree that when it comes down to it, whilst one MAY be paying a bit over the odds, as long as one has done the maths and can afford mortgage repayments should the interest rate rise appreciably, buying is the way to go. You do only have one life.

Good luck.

Good luck, break a leg

You aren't an owner until you've made your last mortgage payment, right up until that day you are renting from the bank only you do all the repairs and upkeep of the property, clever of them eh ?

'I remember the feeling when I got the keys of my own house 10 years ago, being a student for 5 years and renting. I have never known happiness like it.'
exactly!

I think you are making the right move tbh. yes house prices might go down further more but then you might not find any house you like.

I'm so excited for you. let us know.

sorrento, yes the house might belong to the bank but the money you have paid in are yours rather than the landlord.

Prices may be dropping, but (certainly where I live) the market isn't flooded with properties, as most people are staying put. Therefore if you see your dream house I'd go for it - the opportunity may not be there in 12 months time.

wendy, go for it, live life!
Just make sure the financial risk you take is sensible, that's all.

If it's a house you really want, I'd buy as long as the price is right. You don't have a house to sell so you are in a great position.

(Wish I could sell ours, but we'd have to do a heap of work to sort out all the things you kind of live with if you are staying put - repainting the bin cupboard door, buying matching curtains, chucking out all the stuff dh has filled the garage with... but I'd love to buy one of the neighbour's houses that has just gone on with a bigger garden and an extra room.)

Thank you everyone for all your advice. I do agree with you Sorrento but like Kayspace said you only have one life. We have about 50% deposit so we're not risking anything and if we are prepared to stay there forever we're not risking anything I don't think, either. We can afford repayments even if they go up, as I am a SAHM atm, and could return to work. Similarly at present the repayments will be £200 less than our mortgage. So all things considered we may well go for it. Going to arrange another viewing and finally decide after that.
Thanks again and will keep you posted.