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Sisyphus

Moving Home - Have We Done The Right Thing?

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After checking the market for a couple of months, Sisyphus and co are moving to new rental accomodation.

We will be moving about a mile across north London. We didn't really want to move as we are happy where we live and get on well with our current landlords but school catchments obligent!

Our new landlords are moving abroad for a couple of years at least. They are leaving us with a very pleasant well decorated and furnished flat in a nice area.

Through Houseprices.co.uk I estimate the value of the flat at roughly £375k - We have negotiated £360 per week. (£1560pcm)

Not sure of my maths but I reckon on a 90% mortgage, I would pay about £2200 monthly if we were to buy similar.

Or to put it another way, the flat is worth about 20 times our annual rent.

In my situation:

a) I could buy a cheaper (not so nice place) for the same monthly outgoing

B) Find a higher income multiple mortgage (income actually £75k p.a before bonus) and pay £640 pcm more.

c) Move out of town for cheaper, but that would preclude Mrs S. restarting her professional career do beef up our joint income due to the commute being too long.

d) Do what I'm doing.

e) None of the above.

Have I got it all wrong? What would you do ? Answers on a postcard.

Sisyphus.

Edited by Sisyphus

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e) Send your bonus my way, doesn't sound like you need it. Bank details on a postcard. :D

you say that but you dont get much in London as a FTB with that

don't feel rich with London cost of living - funny that

Edited by Sisyphus

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I think you are in the right position.

Money is just another tool to get you through life.

If I can afford to, I'll save the difference betwwen the rent the hypothetical mortgage. If I can't, then it would probably have been a wrong and very stressful decision to buy.

In the long run we're all dead anyway. :D

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Depends to a large extent on high your savings are and where they are invested.

We are renting for £360 pw (rent frozen for 18 months, but it should be higher). I reckon the flat could sell for about £425k.

If we had no deposit at all, it would be much much much cheaper to rent than buy the flat.

If we could buy it outright, it would be slightly cheaper to buy than rent the flat, even though the service charge is about £2.5k per annum. That is partly because we are higher rate tax payers and our savings would be invested in cash at about 2.85% net currently.

If you are a higher rate tax payer with a sizeable deposit living in or near central London, it can be worth buying, if you assume that interest rates stay where they are and property rises at least in line with your cash. Also if you don't need flexibility.

However, there isn't that much in it, so the decision tends to get made on what you feel like doing and how bearish you are on property prices.

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You could have a separate forum, but I find it quite interesting that FTBs in Wales cannot afford to buy but also, a lot of people I know who have been working in the City for years and years are either

* struggling to buy / cannot trade up

or

* struggling to pay the mortgage

This includes people in their 40's with plenty of equity behind them.

It shows that the strength of the housing market and HPI has become a problem for almost everyone apart from the banks or anyone about to downsize / cash in and live somewhere cheaper.

The greater the number of people for whom HPI is a problem, the quicker the problem will unwind.

Edited by geranium

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Depends to a large extent on high your savings are and where they are invested.

We are renting for £360 pw (rent frozen for 18 months, but it should be higher). I reckon the flat could sell for about £425k.

If we had no deposit at all, it would be much much much cheaper to rent than buy the flat.

If we could buy it outright, it would be slightly cheaper to buy than rent the flat, even though the service charge is about £2.5k per annum. That is partly because we are higher rate tax payers and our savings would be invested in cash at about 2.85% net currently.

If you are a higher rate tax payer with a sizeable deposit living in or near central London, it can be worth buying, if you assume that interest rates stay where they are and property rises at least in line with your cash. Also if you don't need flexibility.

However, there isn't that much in it, so the decision tends to get made on what you feel like doing and how bearish you are on property prices.

to be honest, i don't have much of a deposit, I reckon interest rates won't go lower but may go higher. I need the flexibility - job situation could go t**ts up and I might decide to emigrate. Standard of living seems a lot higher some places abroad, so I might want to keep my options open.

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to be honest, i don't have much of a deposit, I reckon interest rates won't go lower but may go higher. I need the flexibility - job situation could go t**ts up and I might decide to emigrate. Standard of living seems a lot higher some places abroad, so I might want to keep my options open.

sounds like you're sorted then, 100% the right decision

the flexibility of renting (no real transaction costs assuming you get your deposit back) is very under-rated

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cant we have a sub forum for rich people, this kinda talk is just making me depressed

sorry, wouldnt have quoted amounts but wanted to show the numbers to explain my reasoning... more realistic than false numbers. I know people abroad who have a higher standard of living on a third of my income.

So ultimately it's only paper.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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