To Buy or not To Buy

[davidsheena]

We are renting a 2 bedroom house house at the moment and are very happy here, but we have the opportunity to buy a lovely 2 bedroom cottage in a perfect village setting.
The owner of our house might want to return at any time, so we have no long term tenancy guarantee.

Should we continue to rent - or should we buy ?
Rent = �650pm. To Buy = �320k

[woofgang]

umm having lived in both rented and purchased, I would say buy but that's me and my feelings. What would you/ could you/ will you do when the owner of your rental returns, have you got a plan to deal with this? How "solid" is the price of the house that you are buying? IMHO a market correction is coming but if the house is genuinely lovely and the location is genuinely lovely and the house isn't over priced, again IMHO I don't think its going to be as bad as the last "correction" also how big a mortgage would you need? The worst negative equity sufferers last time were the folk who had mortgages that were most of the value of the house.

[Kos]

Given the choice my option would always be to buy, especially if you plan to live there for a while as invariably over a period of time house prices do increase (my parents brought their house for �1500 in 1955 and its now worth 1/2million!) and you will always get something back for your money. Whereas with renting you never get a return on your investment.

I suppose its a British thing though 'cos if you go to Germany, everybody, except the landlords, rent

[nuoyg]

Money wise (repayment) I don't know as not sure how much you earn and deposits etc so I couldn't say (that's somethign for you guys) but I would always buy.  I have always been of the opinion that renting is paying another persons mortgage.  The good thing about buying when you're renting is you're not in a chain so you're in a better position to negotiate.  However, I would personally do what is best for you.  Don't buy anything unless you're 110% sure.  If it is right then you will know it in your hearts!!

[jake-the-peg]

As everybody's said depends on what sort of a deposit you can rustle up.

Even so you may find it a bit of a shock. A 25 year repayment mortgage for  �300k will cost you an extra thousand pounds a month at 4.5% interest over and above what you're paying in rent

[dmsjps]

I would always buy. Pay a mortgage for a fixed term (max 25 years) and at the end of it, the property is yours. Otherwise, pay rent - for ever. How long you expecting to live? On top of this, your monthly mortgage payment usually works out to be less than rental in a like-for-like property.