Hi people,
I have read this forum from start to end, trying to figure in my head what to do.
Question is in subject.
I am here with my girlfriend for the next 2-3 years (we are both on PhD) and we rent 2 bedroom apartment for 500 pcm.
Everyday I read something different on the web from "buy asap, prices will go up!", to "do not buy, housemarket will crash in a year or two".
The best case scenario for us would be to buy a house/flat, and then sell it in 2 years but the questions are:
- Does this make sense at all, due to costs of buying/selling?
- If we buy, should it be a house or flat?

Opinions, views much appreciated.
Agaton

Hi i am a student of Hallam University.

I am looking for a property with a single bedroom, i would be glad if i get it as soon as possible. I am desperately looking for it so kindly make a r eference on my profile and reply me as soon as possible.......

Well, nobody can predict the market accurately. The question is to get all the facts first and put it in front of you and then make a decision. I think you may find that such facts may limit your own options and decision any way. I remember not knowing anything, and it becomes a headache. I just can plan for the next 5 years and hope for the best on the rest.

Qs:
1) What are the banks willing to loan nowadays? Is it 3.5 x salaries or 4 x salaries ?
2) Do both your and your partner's income add together enable you to get onto the ladder ? If so, where ?
3) Do you have plans to put down roots in Sheffield ? If not, what will happen if the market crash? You will make money if it rise. You have to weight up your chances.
4) What's your own plan within the next few years? Will you stay in Sheffield to work, will you go elsewhere? Will you move closer to your own families?
5) Look at the interest rates, and figure what it is, also what is the worst scenario if the market crashes. Can you afford the mortgage? What if there is a repair needed on a house, can you have an amount set aside to fix this?

Hi i am a student of Hallam University.

I am looking for a property with a single bedroom, i would be glad if i get it as soon as possible. I am desperately looking for it so kindly make a r eference on my profile and reply me as soon as possible.......

:hihi:
Knock, knock. Excuse me, this is a thread about whether to buy a house or not. I think you need to reply to another thread. Hehehe...

[Added]Here..
http://www.sheffieldforum.co.uk/forumdisplay.php?f=42 - This is the section where you want to look for a place.
http://www.sheffieldforum.co.uk/forumdisplay.php?f=41 - This is the section where you want to make a new "thread" to let others know you are looking for a room.

Thank you Bago, actually we are asking ourselves the similar questions. We know all the answers, but since we cannot predict what will happen, we are in big dilema.


1) What are the banks willing to loan nowadays? Is it 3.5 x salaries or 4 x salaries ?

4.5 in our case. We are both "good" bank customers and save decent amount of money.


2) Do both your and your partner's income add together enable you to get onto the ladder ? If so, where ?

yes, we can buy very nice house in sheffield (not in th emost expensive areas, though)


3) Do you have plans to put down roots in Sheffield ? If not, what will happen if the market crash? You will make money if it rise. You have to weight up your chances.

4) What's your own plan within the next few years? Will you stay in Sheffield to work, will you go elsewhere? Will you move closer to your own families?


We do not know, but we are planning for 2-3 years only.
For easier planning, we just assume that we will move after that period, but again, nobody knows. Sheffield is a nice place.


5) Look at the interest rates, and figure what it is, also what is the worst scenario if the market crashes. Can you afford the mortgage? What if there is a repair needed on a house, can you have an amount set aside to fix this?


Well, that is the problem, obviosly we can lose a lot, if not everything. We do not look at the house as an investment, we would be perfectly happy if we just save 12+K which we pay for rent.

Thank you for your hints/qs

You don't have to tell me so much of your personal details! It's still the internet. >.<
I'd redit that bit. lol... I wrote what I did merely to get you to ponder those points. :)

I would say that, the market has slowed somewhat now. A lot of people are already struggling in being stretched so much. I would seriously consider this bit into your own equation and sums.

I personally do not think that the housing market will rise as sharply as it did in the past 4 years. If I were you, I'd do some more homework on what is available to what you can put down. Also, see what props up, but without actually putting any money down as yet. You will find that, by the time you know what certain places are worth, the market may have changed already, and your own circumstances may have changed as well.

You are not in a big dilemma since you can't predict it. Nobody can. People can upgrade or downsize houses depending on the amount of risk that they want to take. At the end of the day, it's all about the sums, that's all. There's no right or wrong way about it. It's whatever you feel comfortable in doing at that moment in time.

Personally I wouldn't recommend buying for such a short term. If you aren't planning on staying then there's always the possibility that you'll need to move on at quite short notice when you finish your writing up (the jobs market is likely to push you to move to the jobs rather than find a job locally- that seems to be the trend these days from people I know).

I don't think that there's any way of knowing for sure that the market will improve sufficiently over 2 or 3 years to even make back the money that you will have spent on solicitors' fees and getting new carpets down- and there's significant chance that it won't.

On top of that, it's also likely that a mortgage will cost you as much (or nearly as much) as the rent that you're currently paying, and whilst any amount paid for your own house is actually going in your own pocket in the long run, it's not really a short term solution and you have to weigh up the risk of either a downturn in the property market lowering the value whilst you own it, or being unable to sell it when you choose in a couple of years' time.

If you have an option, I'd recommend renting cheaply and saving bucketloads so that you can both minimise your outgoings now and maximise your ability to buy later.

Personally I wouldn't recommend buying for such a short term. If you aren't planning on staying then there's always the possibility that you'll need to move on at quite short notice when you finish your writing up (the jobs market is likely to push you to move to the jobs rather than find a job locally- that seems to be the trend these days from people I know).

I don't think that there's any way of knowing for sure that the market will improve sufficiently over 2 or 3 years to even make back the money that you will have spent on solicitors' fees and getting new carpets down- and there's significant chance that it won't.

On top of that, it's also likely that a mortgage will cost you as much (or nearly as much) as the rent that you're currently paying, and whilst any amount paid for your own house is actually going in your own pocket in the long run, it's not really a short term solution and you have to weigh up the risk of either a downturn in the property market lowering the value whilst you own it, or being unable to sell it when you choose in a couple of years' time.

If you have an option, I'd recommend renting cheaply and saving bucketloads so that you can both minimise your outgoings now and maximise your ability to buy later.


Iagree almost entirely with Medusa on this.

However from personal experience I would imagine you will find a mortgage more expensive than your £500 a month rent, unless you have a large deposit to put down.

Given the current slowing of the market and inflation of house prices, the possibility of interest rates continuing to rise, and the costs of buying and selling I would recommend renting till you are more settled.

In times gone buy you would have had a good chance of making money and selling easily again in 2 years. If you are not certain bothj your futures lie in or around Sheffield its not worth the risk IMO.

Keep renting where you have no repair bills etc to worry about, and if yopu aree keen to buy keep saving as hard as you can so you have a nice big deposit once you have both finished your study.

If you are not planning on keeping the property forever you could look at an interest only mortgage. That way you are not paying off any of the capital of the loan, just paying interest. When you come to sell you will still take the profit (if any) and pay off the mortgage. On a £95k mortgage we are paying £465 pcm interest only, if thats any help to you.