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Cost Of Hold Out

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Apologies if there is a thread on this topic already.

Gurus on this forum need your help.

Same street:

3 Bed house, asking price £400K, current rental £1100 per month.

3 Bed Flat , asking price £260K, current rental £1000 per month.

2 Bed Flat, asking price £230K, current rental £900 per month.

Does it make sense to buy the flat or continue renting. Somewhere I think BTL fall has just begun and hasn't bottomed out yet?

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Does it make sense to buy the flat or continue renting. Somewhere I think BTL fall has just begun and hasn't bottomed out yet?

I don't think anyone could advise based on only this information.

Are you thinking of the flat as a kind of hedge? As in, if prices go up more you share in the upside, but if they fall the step up to the house becomes smaller?

But if you're confident the "fall has just begun" why would you want to buy?

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Last time there was a tread asking something like this, I spend some time calculating my situation. How much rent I pay. The current price of similar flats. The costs of servicing a mortgage on the similar flat. Loss of income (investment) from the deposit. Maintenance costs, etc. To my surprise it came out better to buy! No doubt because of the ZIRP environment currently available for mortgages! I didn't post the information and I can't find what I did with the paperwork. Might have been good to post as you all could have picked holes in my sums, but it depressed me, so I didn't. There wasn't a huge amount in it but numbers don't lie. However, it was a snapshot and my bias is that IR are far too low and will have to rise and if was to happen prices would inevitably fall.

For yourself, I have no idea where these numbers you have come from and I don't know nothing of your circumstances. What you earn, how much you have in savings, etc.You should think about it yourself and come back with some workings. Then we can pick holes in it!

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These figures are from right move. 3 bed flat dropped from £280K to £260K and 2 bed flat dropped from £255K to £235K from their asking price in March. Identical house next door has come up at £385K now.

If I was able to afford a 20% deposit then does it make sense to buy (not the house).

Current thoughts in my mind :

- What if prices fall further

- What if flats fall more than houses (upgrading will be very hard?)

- Is it good to wait and see if the house drops 20 - 30%. What are the chance of that happening …… no one knows?

and while I wait I will have to continue renting at the above cost depending on the property I live.

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These figures are from right move. 3 bed flat dropped from £280K to £260K and 2 bed flat dropped from £255K to £235K from their asking price in March. Identical house next door has come up at £385K now.

If I was able to afford a 20% deposit then does it make sense to buy (not the house).

Current thoughts in my mind :

- What if prices fall further

- What if flats fall more than houses (upgrading will be very hard?)

- Is it good to wait and see if the house drops 20 - 30%. What are the chance of that happening …… no one knows?

and while I wait I will have to continue renting at the above cost depending on the property I live.

I always think this is likely as they seem to be building flats everywhere but until BTL blow up and people don't even want to rent these places, I'm sure they will keep building them as the old myth goes 'they aren't making any more land'.

Have a go at doing the numbers by yourself. If you can get asking prices off rightmove, then you can get mortgage information as well! Work out what you are getting on your savings (if you have any!) and calculate at what price you are better off buying. Ok, I don't think it is as clear cut as that. I'm currently happy where I rent and would have to be saving more than a couple of 100 pounds a month before I could be bothered to move, plus all of the practical reasons for living where I do!

On the waiting for a place you want to drop the asking price by another 20-30%. Well if you want it, go there and offer 20-30% less, see what they say!

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Last time there was a tread asking something like this, I spend some time calculating my situation. How much rent I pay. The current price of similar flats. The costs of servicing a mortgage on the similar flat. Loss of income (investment) from the deposit. Maintenance costs, etc. To my surprise it came out better to buy! No doubt because of the ZIRP environment currently available for mortgages! I didn't post the information and I can't find what I did with the paperwork. Might have been good to post as you all could have picked holes in my sums, but it depressed me, so I didn't. There wasn't a huge amount in it but numbers don't lie. However, it was a snapshot and my bias is that IR are far too low and will have to rise and if was to happen prices would inevitably fall.

For yourself, I have no idea where these numbers you have come from and I don't know nothing of your circumstances. What you earn, how much you have in savings, etc.You should think about it yourself and come back with some workings. Then we can pick holes in it!

I can believe all that, until the pre election boom pushed up prices here to silly levels. that window of buying is cheaper that renting was short lived, hence my thread on the subject.

Also, what price can you associate with risk. There is massive risk buying a UK property now.

Some of the houses my wife and I might be interested in have dropped asking prices more than my rent for the last 7 years.

Crazy, but true.

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Additional cost being the social and professional cost of being a pariah

Edited by Si1

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Additional cost being the social and professional cost of being a pariah

If your friends don't like you because you rent (I am a home owner by the way) then you are gaining the knowledge of which friends are prats and best avoided.

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If your friends don't like you because you rent (I am a home owner by the way) then you are gaining the knowledge of which friends are prats and best avoided.

That option isn't available for family or colleagues, sadly

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Additional cost being the social and professional cost of being a pariah

Next time someone at work asks me if I've bought or rent, I'm going to lie and say I've bought. What the hell.

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