Should i buy or rent, if i plan on emigrating in 1/2 years?

pooper · 23-05-2007, 09:07

OK so i'm getting kicked out from home soon (house has been sold), so right now, i've got a choice... either rent somewhere, or buy somewhere.

I'm planning to emigrate in around 1-2 years (realistically - but hopefully nearer to a year)... and i have NO idea what i should do.

I don't really want to rent, because that just feels like throwing money down the drain (plus i work in london, and rent prices are hilariously depressing). But at least by renting, i have a bit of freedom (i can up and leave with relatively short notice).

I think i'd rather buy a 1 bedroom maisonette or flat, but i have NO idea about mortgages or anything like that... what if i get a mortgage of x amount of years, then 1.5 years into it, i decide to emigrate? Will i gain/lose any money by selling early, are there charges for paying off your mortgage early?!

Are there also good '1st time buyer' deals to be had?!

I really dont have a clue! But basically i just need to know if by buying a place, im going to end up losing a lot of money if i have to up and leave.

thanks in advance!

Halcyon · 23-05-2007, 09:13

If you've got the money, then buy.
Atleast you know that when you sell it will be worth more so you will atleast have made some money.

Like you said, renting is throwing money away.
The one good thing about it is that you don't have any big commitments and can leave pretty quickly if you need to.
Owning a property can take time when selling as it is a chain of events as the buyer may not be ready to move in as his house isnt sold, etc.

If you haven't lived away from home before, renting may be a good way to start so that you can get a feel of what it is all about.
If anything goes wrong, you don't have anything to loose.

Alternatively, another option is that you buy the property in London and if possible, keep it once you emigrate. You can then rent the property out and make money from it. However, you need a lot of money to do that.

pooper · 23-05-2007, 09:22

Yeah i definitely dont have the money to keep a place in london

I'm pretty lucky, as im going to be 'inheriting' a lump sum, which is the only thing that's actually enabling me to buy a place (without it i'd be screwed!). So 'hopefully' ill have enough for a nice enough deposit.

Hmm your post has made me lean towards buying!

Wondering if it would be possible to get a 2 bedroom place, and rent a room to a friend (would help pay the mortgage!).

Are there usually 'penalties' for paying off your mortgage early?

orangebird · 23-05-2007, 09:29

Quote:

Originally Posted by pooper

Yeah i definitely dont have the money to keep a place in london

I'm pretty lucky, as im going to be 'inheriting' a lump sum, which is the only thing that's actually enabling me to buy a place (without it i'd be screwed!). So 'hopefully' ill have enough for a nice enough deposit.

Hmm your post has made me lean towards buying!

Wondering if it would be possible to get a 2 bedroom place, and rent a room to a friend (would help pay the mortgage!).

Are there usually 'penalties' for paying off your mortgage early?

Depends on what offers and conditions are attached to the mortgage you finally go for. Get the independent FA to help you.

If you plan to keep the property & let it out after you emigrate, I would buy. If you plan to sell, I wouldn't. Reason being the costs involved in buying and selling (solicitors fees, stamp duty etc) may negate any small profit you might have made in the year or so that you own the place. Whilst prices are still going up, you're buying at a very expensive time anyway, and the rise in property value is slowing, and I don't believe you acn make much profit anymore in such a small amount of time. Best thing though is to get advice from an FA. hth

Xaccers · 23-05-2007, 09:32

Many mortgages do have those penalties, my parents' mortgage had a Ã‚Â£8K penalty which reduced each year, so watch out for that.
Look into the costs of selling, stamp duty, estate agent's fees, seller's pack cost, solicitor's fees.
If you don't expect to be able to sell the house for more than that after 2 years, then it's not going to be worth it.
Likewise, if you work out how much money you're going to get after selling it, take away mortgage costs for that period, then add the rent cost for the same period, and see which one actually costs more. For instance, I'm paying Ã‚Â£750 a month on a house which to mortgage would be around Ã‚Â£1600 a month, with the added costs of fees, and repair bills if anything goes wrong. So I'm better off renting.
The big advantage of buying is if your plans fall through, then you have a solid foundation to continue on.

punky · 23-05-2007, 10:07

I'd say rent. At least you know when you are ready to emigrate, and the tennacy ends, you can leave.

If you buy, you could be stuck trying to sell a home that that noone's buying. Some visas etc mean you have to emigrate within X amount of time. Plus interest rates are rising and people are predicting a price crash...

dcclanuk · 23-05-2007, 10:29

Quote:

Originally Posted by Gavin

I'd say rent. At least you know when you are ready to emigrate, and the tennacy ends, you can leave.

If you buy, you could be stuck trying to sell a home that that noone's buying. Some visas etc mean you have to emigrate within X amount of time. Plus interest rates are rising and people are predicting a price crash...

as above, or I would say BUY depending on where you live. If u live near london/in london, then house prices are going to start shooting up as the olympics nears, so even after paying bank penalty charges for paying too early, it could still be beneficial....

pooper · 23-05-2007, 10:39

Hmm i need to look at all the different mortgage types are available (oh what fun).

Or should i just rent... and save all the hassle......... :/

danielf · 23-05-2007, 10:49

I'd rent. It's far more flexible, and you don't take a risk in house prices coming down/having difficulty selling your property. Plus, as mentioned, you need to factor in stamp duty, solicitors/agents fees etc. Also as has been mentioned, the rent you pay on a property may be considerably lower than the interest you would pay when buying that property. If you are only going to be in the property for a year it's not worth the hassle of buying in my opinion.

pooper · 23-05-2007, 12:11

Depressing

im going to have to pay around Ã‚Â£500ph for some studio hell hole in london.... its s0o0o0o0o0o0o0o0o0o gonna feel like im just p*****g is away :'(

punky · 23-05-2007, 12:22

Quote:

Originally Posted by pooper

Depressing

im going to have to pay around Ã‚Â£500ph for some studio hell hole in london.... its s0o0o0o0o0o0o0o0o0o gonna feel like im just p*****g is away :'(

We, you could end up peeing a lot more away by buying. For the sake of 1-2 years (and as you said, its closer to 1), you'd be saving money in the end. If you was renting 10 years, yeah you could say that.

Regarding the Ã‚Â£500 for a studio hell hole... Try examing transport maps of London. Sometimes you can move out of London (and get a nicer place for cheaper), but still be 'close'. For example, Harlow is on the mainline into London Liverpool St. You can do it in 45 mins.

pooper · 23-05-2007, 12:29

Yah thats how ive been searching. Right now im looking around Chingford.. which seems nice.. and about 25 mins into Liverpool St. station. Although i work in West london... i don't fancy living there... seems a bit of a dump! lol (currently living in Kent - 35 mins into Charing Cross)

punky · 23-05-2007, 12:45

Quote:

Originally Posted by pooper

Yah thats how ive been searching. Right now im looking around Chingford.. which seems nice.. and about 25 mins into Liverpool St. station. Although i work in West london... i don't fancy living there... seems a bit of a dump! lol (currently living in Kent - 35 mins into Charing Cross)

Chingford is nice... and Ã‚Â£500-Ã‚Â£600 can get you something reasonable.

Only thing i'd mention, Chingford Station isn't an Oyster station yet, so if you want to go Oyster-only like Red Ken would like, you'd need to bus into Walthamstow and get the Victoria line in, which is a pain.

pooper · 23-05-2007, 12:51

Yeah that's not an issue for me really, i have an oyster card right now, but it's just got a standard monthly travel card (zones 1-6!)

How much does location add to the rental price? I don't currently drive, so when ive been searching for places, ive specified that they're within 1 mile of a train/tube station :S

punky · 23-05-2007, 13:04

Quote:

Originally Posted by pooper

Yeah that's not an issue for me really, i have an oyster card right now, but it's just got a standard monthly travel card (zones 1-6!)

How much does location add to the rental price? I don't currently drive, so when ive been searching for places, ive specified that they're within 1 mile of a train/tube station :S

Doesn't matter really. 1 Mile from Chingford St. covers most of Chingford. Public Transport covers the area pretty well.