Can't I just rent forever?
March 31, 2014 8:38 AM Subscribe
I rent a flat with my SO in London. We've finally saved enough to be in a position to buy a home but the insanity of the market is making me hesitate. What to do?
posted by socksister to Home & Garden (25 answers total) 6 users marked this as a favorite
We originally moved here years ago and have come to love London - apart from the housing madness. After five years in noisy, cramped expensive places close to the centre we moved further out in the hopes of finding some way of living here that didn't make us crazy. The plan was to rent for one more year then either bite the bullet and buy a flat, or just cut our losses and plan to move back to our previous (cheaper) city.
The first part worked out well: we found a great place in a location that we love, and decided we'd like to stick around for a few more years. We have savings enough to provide a deposit + fees + moving costs + emergency fund, and our mortgage application prospects are looking good - we're all set to get on the ladder at the end of our current lease if we want to.
Except, the housing market has become super-crazed in the past 12 months and I'm freaked out by what appears to be a massive bubble. Flats on our street are sold in days at way above asking prices - and this is in a relative backwater. The places we can afford to buy now are not places we'd be happy to live which would kind of defeat the object. We also love our current flat and don't want to move. In an ideal world we'd offer to buy this place but if it were to go on the market we'd be trampled in the rush to outbid us.
The second complication is my age - I'm late 30's (he's younger) and after years of moving around I just want to settle for a bit but I cannot get my head round committing myself to a 25 year mortgage on a tiny, crappy flat that will suck up all of our income, especially seeing as interest rates are predicted to rise. This is not helped by knowing we could have a whole house fully paid off in fifteen years if we go back home, a place we both know and love but - well, it's not London.
We both have decent careers with in-demand skills, we have no other consumer debt and we won't be having kids so we are pretty flexible. I just look at the money we've taken years to build up and I'm scared about spending it all on something I'm not sure I even want. However if we don't do it now we may be priced out altogether, in which case we're renting for as long as we're here (is that even a bad thing?).
Our options therefore seem to be:
1. Stay and keep renting nice flat (happy life now but insecure in the long term)
2. Stay and buy crappy flat now (misery and short-term financial instability now but potential long-term gain)
3. Stay, keep saving and buy nicer flat later (risk of being priced out of market altogether)
4. Leave to buy elsewhere (???)
None seem all that appealing. SO is equally ambivalent. Is there anything else I need to consider here?