Shall I buy a cheap house now? or rent until we have more money?

[Isirjo]

Hi there!

I'm a first time buyer looking for a house to live. My partner and I are now renting a flat.

My question is: do you think is it better to buy now a cheap house we can afford the mortgage right now and sell it after 2/3/4 years and move to a bigger one?
Or shall we continue renting a flat and wait 2/3 years until we can afford to buy a big house we want.

While renting I really have the feeling that I am wasting my money. Have you been in a similar situation?

Thanks for the advice!!

[albert]

It's true by renting you are lining the pockets of a landlord instead of saving the money.

However, Buying a cheap house that might be cheap for a reason and may not increase in value for some time considering the economy at the mo......Also of course you have wasted money on buying and legal/structural survey etc that may be needed on cheap properties especially.

Another thing to consider with cheap properties and being able to sell is the quality of the area.......Quality of the neighbours......Noise issues, thin walls all of which will depress the property price indefinitely. Beware......I say this as a council house buyer from many years ago when an area and property were beautiful. That same place is now a noise polluted anti social behavour pig hole. So be extra aware of cheap properties.....

Actually wanting to escape myself i have exactly the same dillema as you have regarding renting too early which would stop any chance of saving while making a landlord rich. One thing for sure for me though is at no price am I going any where near a cheap property. They are cheap for a reason....They are a risk while lanlords are an expense or even a risk if they want you out after the first term of the agreement.....

I know that was not giving you an answer but instead more food for thought to help you decide.....Good luck......

[Geldard23]

Hi

We all know that property values have been hit hard in recent years and this is down to many factors, one factor is supply and demand. Demand for buying property has fallen because of the mortgage lenders subdued lending, supply has risen because not as many people have been buying, resulting in house prices reducing. In contrast people have to live somewhere so people have been renting, this in turn has effected the rental supply and demand, i.e. demand for rental property has risen thereby reducing supply of rental stock results in high rents. Rents have rocketed since the recession and in some cases rental payments may be more than equivalent mortgage payments, people have started to ask themselves why pay someone elses mortgage. Lending institutions make money by lending money and they have not lent in great volumes for about 4 years now, when the economy improves there appetitie to lend will return and people will find mortgage funding a little easier to get hold of. When, not if this happens, then the demand to buy property will increase, in turn reducing stock results in house prices increasing. In my view now would be the time to buy while the market is subdued.

Hope that helps.

Geldard23

[michaelb4348]

Geldard

what about when interest rates go up and mortgage payments rocket and then house prices fall because they are allready overpriced?