The start of this blog was really about two things: 1. How to climb out of debt and save for a house / downpayment and retirement and 2. How to decide whether we wanted to live in the city or the countryside, and in what city / countryside that might be?
While we have had some luck in the first category mainly as a consequence of my partner getting a bonus this year and also me doing some major extra work, the second struggle is real. With growing anxiety over Brexit, financial uncertainty is real in a lot of different ways than I first expected it to be also. For example, I’ve had to think about which currency I ought to be saving our money in or if we should be stockpiling food. I also bought a pressure canner.
I’ve also been thinking about and applying for jobs in countries where one of us already has permanent residence and or citizenship, which neither of us have here. While being an immigrant sucks much more for low skilled immigrants than it does for us, the political and economic uncertainty do not herald the best of times. This coupled with a stagnating housing market, a confusing and increasingly probable “no-deal” Brexit where flights and food shortages might actually be a reality to contend with, and the growth in white nationalism here and in the U.S., life choices are not so easy peasy times for a lot of people, so I recognize that I am privileged just by the mere fact that I am asking: do I put all my paltry savings into a 5% downpayment immediately before the market tanks? And then what happens if/when the housing market declines more than 5%. Do I then have negative equity? So far these have been imaginary questions because I haven’t found a house I actually want to buy so its just some form of financial procrastination I can do — think more about the housing market …
And of course, in the middle of all these job applications walks in my our dream house in a place close to where we live now and at a (near) price that we can afford but still small downpayment. We’ve been looking at places to buy ever since I read the Frugalwoods book. In the book, she talks about the kinds of market knowledge she picked up from actually going to see properties and talking to people. This was really good advice. For example, going to look at properties, I can get a sense of how quickly things are moving and the number of people that are currently looking for places and also what types of features sell a house (kitchens) and which do not (steep driveways and off busy roads).
But I know you are not supposed to fall in love with a house, you probably shouldn’t buy a house when you only have a 5% and not 10% downpayment, and the housing market and the pound are likely going to collapse soon, so who wants to buy a house anyways? Leaving all these real issues aside, I thought I would replicate the table I made from the Wandering Professor post. What if I also said it needs no renovations. Like none at all.
What do you think? Is it worth considering given it would cost us more money (200 pounds more a month), that there is uncertainty in the market, that the housing market may collapse, and that we would spend all of our money (including our emergency savings fund) on a downpayment? According to information in the Financial Times, the price of the average house in the UK grew 3 per cent in the year to the end of May 2018, down from 8 per cent in the year before the EU referendum, according to the latest figures from the Office for National Statistics. I know that owners here do not want to budge down on price. How long would you wait?
What would you do? What if I told you the backyard looked like this?
|Location now (rent)||Location there (buy)||Notes|
|Rent||£1125 (3 bed) (~85m2)||£1500 (3 bed)(~92m2)||goes up but paying mortgage with fixed rate|
|Train / car costs plus times (one way so total time *2)||£473 *him time 1 hr 15 min by train *her 15 min by car or bus||£548 *him time 1 hr 15 min by train *her 20 min by car or 1 hr bus||goes up|
|Insurance||£140||£100||goes down b/c not parking on the street|
|Council Tax||£120||£107||goes down|
|Parking / Gas||£65||£65|
|Mobile Phones (estimate)||£45||£45|
|Parking + taxi||£200||50|
As always, I am anxious to hear your thoughts.