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Short term (~2yrs) buy or rent?

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    Short term (~2yrs) buy or rent?

    Currently renting, landlord is selling the place (don't blame him tbh with the current market) so we have to move out by the end of the year (me, wife, 3yo). We are in discussions with him re buying the place but realistically its too small for us already and there might be a second child on the way. House prices in this area start at around £500k for smth reasonable, or at least larger than the place we are in. Got £50k for a deposit, more cash in the company account but I'll get stung for 40% tax if we go above that, max loan we can get is £500k (spoke to a contractor mortgage advisor) which actually makes sense as the deposit is 10% then.

    Plan is to probably stay in the UK for max 2yrs then move out, but its a really tulip time to buy now imho (expensive as hell). Could carry on renting but its money down the drain, although is uber flexible indeed.

    So, the question is, which is better in your opinion? Rent for 6 months if smth reasonable comes up, then see what the market is like, or buy and then sell after 2yrs?

    #2
    Originally posted by dsc View Post
    Currently renting, landlord is selling the place (don't blame him tbh with the current market) so we have to move out by the end of the year (me, wife, 3yo). We are in discussions with him re buying the place but realistically its too small for us already and there might be a second child on the way. House prices in this area start at around £500k for smth reasonable, or at least larger than the place we are in. Got £50k for a deposit, more cash in the company account but I'll get stung for 40% tax if we go above that, max loan we can get is £500k (spoke to a contractor mortgage advisor) which actually makes sense as the deposit is 10% then.

    Plan is to probably stay in the UK for max 2yrs then move out, but its a really tulip time to buy now imho (expensive as hell). Could carry on renting but its money down the drain, although is uber flexible indeed.

    So, the question is, which is better in your opinion? Rent for 6 months if smth reasonable comes up, then see what the market is like, or buy and then sell after 2yrs?
    500K = 15K stamp duty (unless you're Bliar), have you factored that into a short term solution (+ solicitors fees, plus estate agent fees on way out).
    But I discovered nothing else but depraved, excessive superstition. Pliny the younger

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      #3
      Meh, with a two year time frame you are gambling that things won't charge.

      £15k stamp duty and £5k in selling fees is how many months rent?

      Then add the interest part of the loan on top (another £18,000) and I suspect it's rather close.
      merely at clientco for the entertainment

      Comment


        #4
        Originally posted by Gibbon View Post

        500K = 15K stamp duty (unless you're Bliar), have you factored that into a short term solution (+ solicitors fees, plus estate agent fees on way out).
        Not to mention, have you considered that buying might take several months? We accepted an offer on a property at the start of June, for an empty house, no chain, and it still hasn't even exchanged contracts.

        If you're in the position that you can afford a 500k property, I would argue you can afford to rent and avoid all the hassle, if you want to be relatively flexible. But 2 years seems right on the tipping point.
        Originally posted by MaryPoppins
        I'd still not breastfeed a nazi
        Originally posted by vetran
        Urine is quite nourishing

        Comment


          #5
          Similar kind of situation to me ... sold my house at top of market and wasn't sure where I wanted to live (part of country) so had to decide between buy or rent locally. Renting around here for something of decent size is about £15k per year.

          To buy then sell would be about £20k (£500k house), so assuming house prices don't move too far against me (and who knows what's going to happen eh?) then I figured my pay back is about 18 months. I therefore chose to buy and figure that I won't be any worse off, will have control of the house (i.e. can paint etc, move when I choose and not when landlord chooses) and once I can figure out where I want to be in 18 months or so I can move then.

          But ... I have no mortgage so I don't have to figure interest into the equation ... so add that into your costs and look at your break even point. For you it may be well over 2 years.

          All the best.
          Last edited by Whorty; 7 October 2021, 13:22.
          I am what I drink, and I'm a bitter man

          Comment


            #6
            Originally posted by Whorty View Post

            But ... I have no mortgage so I don't have to figure interest into the equation ... so add that into your costs and look at your break even point. For you it may be well over 2 years.

            All the best.
            Good point, well made, you've just proved the infinite number of monkeys at a typewriter theorem, a lot earlier than expected!

            But I discovered nothing else but depraved, excessive superstition. Pliny the younger

            Comment


              #7
              Originally posted by Gibbon View Post

              Good point, well made, you've just proved the infinite number of monkeys at a typewriter theorem, a lot earlier than expected!
              I am what I drink, and I'm a bitter man

              Comment


                #8
                For two years I rent without a doubt. On top of what seems a very close financial model (with the risk of changes) there is the hassle of buying and then selling.

                If you are absolutely certain you are leaving I think I'd be leaning to rental. Much easier to get the right property for you with more available than buying as well. Just the hassle factor and forgetting the financial element I'd go for rent personally I think.
                'CUK forum personality of 2011 - Winner - Yes really!!!!

                Comment


                  #9
                  As d000gh said, it could take months for the sale to complete so then you'd only be looking at finding somewhere for 18 months rather than two years.

                  Also consider that the landlord could sell with tenant in situ and the new owner takes over the tenancy, with no need for you to move at all. Has the LL said you have to leave before they complete on the sale?

                  Comment


                    #10
                    Originally posted by ladymuck View Post
                    Also consider that the landlord could sell with tenant in situ and the new owner takes over the tenancy, with no need for you to move at all. Has the LL said you have to leave before they complete on the sale?
                    Good point.
                    Originally posted by MaryPoppins
                    I'd still not breastfeed a nazi
                    Originally posted by vetran
                    Urine is quite nourishing

                    Comment

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