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Short term (~2yrs) buy or rent?

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    #11
    Thanks for the replies everyone.

    So I was assuming first two years of mortgage would be a 50-50 split in the monthly payment between interest and what goes towards the house, so those two effectively cancel out each other in terms of monthly costs. The big thing which remains is the cost of the mortgage itself, so stamp duty, solicitor fees, surveys etc. Apart from stamp duty I have no idea how much those would be in total, but lets say 20k to make it a round number. So if the house was to sell after two years for the same price we have 20k less + probably more to cover sell fees etc. (No idea how much those are).

    Rent on the other hand is around 1.5k per month in these parts, so 36k in two years, that is a fair amount more compared to the buy/sell scenario outline above, but it does offer waaay more flexibility. Also the buy / sell scenario assumes no drop in value and that might as well be wrong.

    The two year stay isn't set in stone, might be less, might be more, depending on what happens in the UK. The other issue is that we've been renting this place for 7 years, so a fair bit of money down the drain, but I guess rushing a house purchase is a very bad idea overall (also I've heard stories of houses taking absolutely ages to sell).

    Talking to the landlord next week most likely, no idea what their plans are, but they did serve us notice via letting agency and the end date is end of year.

    Comment


      #12
      Just refuse move out. I reckon you can stretch to two years and not pay a penny in rent before the High Court eviction order comes through.
      'CUK forum personality of 2011 - Winner - Yes really!!!!

      Comment


        #13
        Why don't you buy it and rent it out after 2 years instead of selling? See this as a long-term investment? Yes there are are pros and cons but something else to consider i'd say.

        Comment


          #14
          Buying the house you're renting IS an interesting idea. You can surely negotiate to stay in the place and if it takes a long time to buy, who cares. It's not uncommon for rent you pay during the sale to be taken off the final price.
          Originally posted by MaryPoppins
          I'd still not breastfeed a nazi
          Originally posted by vetran
          Urine is quite nourishing

          Comment


            #15
            Originally posted by dsc View Post
            Thanks for the replies everyone.

            So I was assuming first two years of mortgage would be a 50-50 split in the monthly payment between interest and what goes towards the house, so those two effectively cancel out each other in terms of monthly costs. The big thing which remains is the cost of the mortgage itself, so stamp duty, solicitor fees, surveys etc. Apart from stamp duty I have no idea how much those would be in total, but lets say 20k to make it a round number. So if the house was to sell after two years for the same price we have 20k less + probably more to cover sell fees etc. (No idea how much those are).

            Rent on the other hand is around 1.5k per month in these parts, so 36k in two years, that is a fair amount more compared to the buy/sell scenario outline above, but it does offer waaay more flexibility. Also the buy / sell scenario assumes no drop in value and that might as well be wrong.

            The two year stay isn't set in stone, might be less, might be more, depending on what happens in the UK. The other issue is that we've been renting this place for 7 years, so a fair bit of money down the drain, but I guess rushing a house purchase is a very bad idea overall (also I've heard stories of houses taking absolutely ages to sell).

            Talking to the landlord next week most likely, no idea what their plans are, but they did serve us notice via letting agency and the end date is end of year.
            Playing with your numbers you will have something like this (using my recent costs):

            Buying
            Stamp Duty £15,000
            Legals c.£2000 (incl. searches)
            Survey c.£1000
            Mortgage c.£15,000 (over 2 years ... wild guess)
            Maintenance? c.£2000 (there is always something to do)

            Selling
            Legals c.£1000
            E Agents c.£7000

            Total £43,000


            Renting
            Rent c.£36,000 (1500 per month, 2 years)
            Removals c.£1500

            Total £37,500


            Finger in the air, guesses for mortgage payments, but assuming house prices don't really move anywhere you'd be about £5k worse off buying. If property prices go with you, you'd be in pocket. If they go against you then you're worse off. Depends on your risk appetite.

            And then don't forget, from offer/acceptance to completion takes at least 3 months .... so from today it would be January when you own your house, then after you put the house on the market you have the time to get the offer, then plus at least 3 months on top.

            Probably better off renting .... but if your plans are flexible and may stay 3+ years then buying might be better for you.

            HTH
            I am what I drink, and I'm a bitter man

            Comment


              #16
              Originally posted by dsc View Post
              ...and there might be a second child on the way.
              First thing I'd do is find out if that is the case. I believe modern medicine even allows us to find out before it happens!

              But, if I knew i was moving away in 2 years, I think renting would be the simpler choice (taking into account the financial calcs others have done above).
              Last edited by Paralytic; 7 October 2021, 15:22.

              Comment


                #17
                The other part of the question is "Do you have any reason to believe that house prices will increase in the near future?"

                As I suspect given the price and size of your house (to guesstimate you are somewhere in the South East) I suspect there is little chance prices will rise significantly in the near future, given the current market and last years increase in prices.
                merely at clientco for the entertainment

                Comment


                  #18
                  Originally posted by Whorty View Post

                  Playing with your numbers you will have something like this (using my recent costs):

                  Buying
                  Stamp Duty £15,000
                  Legals c.£2000 (incl. searches)
                  Survey c.£1000
                  Mortgage c.£15,000 (over 2 years ... wild guess)
                  Maintenance? c.£2000 (there is always something to do)

                  Selling
                  Legals c.£1000
                  E Agents c.£7000

                  Total £43,000


                  Renting
                  Rent c.£36,000 (1500 per month, 2 years)
                  Removals c.£1500

                  Total £37,500


                  Finger in the air, guesses for mortgage payments, but assuming house prices don't really move anywhere you'd be about £5k worse off buying. If property prices go with you, you'd be in pocket. If they go against you then you're worse off. Depends on your risk appetite.

                  And then don't forget, from offer/acceptance to completion takes at least 3 months .... so from today it would be January when you own your house, then after you put the house on the market you have the time to get the offer, then plus at least 3 months on top.

                  Probably better off renting .... but if your plans are flexible and may stay 3+ years then buying might be better for you.

                  HTH
                  Do Removals not count if buying? Flippin accountants, no wonder I have to check mine!
                  But I discovered nothing else but depraved, excessive superstition. Pliny the younger

                  Comment


                    #19
                    Originally posted by Gibbon View Post

                    Do Removals not count if buying? Flippin accountants, no wonder I have to check mine!
                    He's currently living /renting in the place he's planning to buy - so there was no point including it.
                    merely at clientco for the entertainment

                    Comment


                      #20
                      Originally posted by Gibbon View Post

                      Do Removals not count if buying? Flippin accountants, no wonder I have to check mine!
                      He's buying the house he lives in ... why does he need a removals company?

                      Just spotted Eek responded before me
                      Last edited by Whorty; 7 October 2021, 15:42.
                      I am what I drink, and I'm a bitter man

                      Comment

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