My wife, Son and I have just moved into a new area and are renting for a year before deciding whether to buy or not. Probably a common thing heard on this forum.
When it comes to houses we are on opposite ends of the spectrum. She is under the belief that you should always buy, that house prices always go up and never go down (she bought a property in 2011 in with no research and has done well out of it). I on the other hand think that houses in the South-East are overpriced and we should continue to rent while we wait for prices to drop. I must say that I've been laughably stuck in that thinking since 2003!
A recent article opened my mind a little to buying even if I believe it's overpriced. https://monevator.com/why-im-not-scared-of-my-interest-only-mortgage/.
As an example we are currently paying £1600 in rent per month on a property worth about £400,000. If we got a repayment mortgage with a 25 deposit it would cost us £1150 (plus maintenance costs) while an interest-only mortgage would currently only be £315 (double that for a ten year fixed), with the saving going into a broad index fund. With the example of a ten year fixed IO and maintenance costs of 1% we would save £72,000 over renting. Even if the house is still only valued at £400,000 ten years later we're ahead.
We plan to stay in the area (Crawley, West Sussex) for between 5 and 25 years. If we were to leave after five years to move abroad we may rent the property out.
I'm still very negative towards buying so it would be great to get any comments that would help change or confirm either of our beliefs, push us to think in other ways or pick holes.
*Stamp duty we may be ok as I'm a first time buyer.
*Obviously a lot of unknowns and assumptions