A Preponderance

If you’ve been reading my blog from the beginning you may recall my continual struggle with the idea of whether to continue renting, or to look to buy a house. I’m still no further forward with that internal argument 2 years later,  but my girlfriend planted the seed again yesterday, opening up the whole can of worms all over again.

Essentially we are looking for somewhere to live together that is close to our respective places of employment (perhaps so we can get rid of one car, then?), that isn’t hugely expensive, that is nice, and is relatively quiet. A tall order in a big metropolitan city. We have been half-heartedly looking around for a couple of months now and we have seen a few places that would tick those boxes. Unfortunately every time we have enquired, the property has already been let.

A Spanner In the Works

Last night my girlfriend mentioned her parents have put away some money for her to use as a deposit (trust fund style) to buy, rather than rent. This has thrown the discussion and plans into disarray somewhat. Do we rent? Do we buy? Do we rent somewhere now together, and look to buy after that?

Looking back (1) at some posts (2) I’ve made before on the subject, I’m coming round to the idea that buying may not be such a bad idea any longer. The economy is faltering once more, and there are some desperate sellers out there. We both have excellent credit ratings, and my pre-approved mortgage offer still exists with my bank – although what value it is now at requires a personal appointment to discover.

Do Your Sums

Hundreds of thousands of people are no doubt in this exact same position. The path to clarity is to do your sums as a couple. What are your outgoings (read ‘Know What You Owe‘ for a good starting point in working this out), and what are your employment prospects like? This is a challenging economy; would a drastic change in one of your income streams cause you pain later on? Even with a mortgage, are you certain you’d still be spending less than you earned – even if interest rates increased? Remember in the 80′s recession interest rates shot up to 15-odd percent, causing pain up and down the country.

If you find you will still be comfortable, then what is to stop you? Ultimately house prices may be over-inflated, but there is nothing to say or evidence particularly that this will ever truly resolve itself to the levels I and others have previously predicted. Even during the recession and the years following it, house prices have remained essentially unchanged (but they haven’t increased much either).

A Watched Pot Never Boils

I’m not suggesting you throw caution to the wind. But with careful planning and the right property, you could escape entirely unscathed. I have previously advocated waiting for the massive market correction I and many others feel is long overdue – but 3 years later, it still shows no sign of coming despite conditions being ripe for it to do so.

Sometimes, despite all financial sense, you just have to go with what ‘feels’ right.

My girlfriend and I will look to buy at some point. For now (for speed more than anything), we will continue to look to rent initially. Are you in a similar position? Or have you recently had a similar discussion with yourself? I’d love to see you in the comments!

p.s. on an entirely unrelated note, for anyone who is resident in Sussex and likes photography, you might be interested in the photograph I took a few days ago of Hove’s West Pier during Stormy Tuesday!