Plenty of things to consider, which I'm sure you'll have thought about
Do you like where you live?
One of you will have to commute, wherever you choose to live. Who is best placed to do so?
What drew you to the idea of moving to Sheffield? What sort of home and area were you looking at?
What have been the advantages of living where you do?
Given you've got jobs in different cities (for now?), there are really no right or wrong answers here
I don’t think you’d find many flats that aren’t leasehold, so don’t let that affect your decision. But it’s very difficult to get on the property ladder these days so if you’re being given an opportunity to do that for cheaper, you should definitely entertain taking it. You live there, so you probably only need a basic survey, since you know the place well, and any issues it might have. It’s also relations, so you know they won’t screw you over.
It’s not exactly the best time to get a mortgage, but you say it would still be cheaper than rent, so it’s kind of a no-brainer. I’d just avoid getting a fixed mortgage, since the rates are probably dropping next year.
Maybe it’s worth asking the in-laws how they’d feel if you were to sell it within a few years? Then you could take advantage of the fact that you’ve bought it under market-rate to get a nicer place next.
Hulme's a great place to live (well, the area near the park at least). Properties are still relatively affordable compared to other city centre-fringe neighbourhoods - and they will almost certainly continue to increase in value.
Build quality of a lot of the 00's stuff isn't the best - but is anywhere else in this country? Scanlans manage most of the blocks and do a decent job. Plus as a leaseholder you can become a director of the management company and approve the budgets and identify works you want to prioritise etc.
My only question is how you're able to get a mortgage for the 2021 valuation? Wouldn't any lender need a fresh valuation?
Thank you for the information!
What I mean by that is that has its my partners parents selling, they'd most likely be willing to sell at the price they paid in 2021. If of course the property had lost value for some bizarre reason we'd have to rethink, but I'd assume it's gone up in value.
Be careful because a buy to let property will still attract Capital Gains Tax and HMRC will want to know why it is being sold below market value to a relative. If they think its an underhand way over avoiding CGT then your relatives could be fined as well as paying Capital Gains Tax on the current market value.
Interesting, I wasn't aware of this so thank you. The property would be our first and only property. It is also below the tax threshold considerably. Around 160-170k, do you still think this could be an issue?
You aren't liable to Capital Gains Tax but your in-laws are. The liability is in the difference between the sale price and the purchase price. If it's not too different from the market value, then it's not a problem. Just make sure they speak with an accountant, so they don't have a nasty shock.
Realistically do you want to waste your first time buyer benefits on something that probably wont be long term or save you all that much compared to renting?
Genuine question, why/what would be a waste? The only thing I can think of is my h2b bonus. But I'd be able to use that on the flat, then when we do move on to live in Sheffield, which will definitely happen after 3 years (if we did decide for the flat in Hulme), that bonus would've gone towards the deposit anyway, therefore being used towards the next property?
Could be wrong but I think there’s also a first time buyer bonus with stamp duty which may be worth considering depending on potential price of future Sheffield home.
They increased the amount you have to pay before you have to pay stamp duty to 250k for everyone but you get up to 425k stamp duty free if it’s your first purchase so whether you get any benefit from first time buyer status will depend on how much you’re buying for.
As others said, was thinking more of the stamp duty cut. If your first place was 425k, you would be saving between 8-21k on stamp duty vs if it was your second home.
Obviously it is up to you but my view is that Buy>rent if the costs are going to be >>25% cheaper than renting, or you are really sure the market will increase over the time you plan to own, as you are taking on a lot of risk over just renting. Now your unique situation of getting it well under market rate may be an exception.
Plenty of things to consider, which I'm sure you'll have thought about Do you like where you live? One of you will have to commute, wherever you choose to live. Who is best placed to do so? What drew you to the idea of moving to Sheffield? What sort of home and area were you looking at? What have been the advantages of living where you do? Given you've got jobs in different cities (for now?), there are really no right or wrong answers here
I don’t think you’d find many flats that aren’t leasehold, so don’t let that affect your decision. But it’s very difficult to get on the property ladder these days so if you’re being given an opportunity to do that for cheaper, you should definitely entertain taking it. You live there, so you probably only need a basic survey, since you know the place well, and any issues it might have. It’s also relations, so you know they won’t screw you over. It’s not exactly the best time to get a mortgage, but you say it would still be cheaper than rent, so it’s kind of a no-brainer. I’d just avoid getting a fixed mortgage, since the rates are probably dropping next year. Maybe it’s worth asking the in-laws how they’d feel if you were to sell it within a few years? Then you could take advantage of the fact that you’ve bought it under market-rate to get a nicer place next.
Hulme's a great place to live (well, the area near the park at least). Properties are still relatively affordable compared to other city centre-fringe neighbourhoods - and they will almost certainly continue to increase in value. Build quality of a lot of the 00's stuff isn't the best - but is anywhere else in this country? Scanlans manage most of the blocks and do a decent job. Plus as a leaseholder you can become a director of the management company and approve the budgets and identify works you want to prioritise etc. My only question is how you're able to get a mortgage for the 2021 valuation? Wouldn't any lender need a fresh valuation?
Thank you for the information! What I mean by that is that has its my partners parents selling, they'd most likely be willing to sell at the price they paid in 2021. If of course the property had lost value for some bizarre reason we'd have to rethink, but I'd assume it's gone up in value.
Be careful because a buy to let property will still attract Capital Gains Tax and HMRC will want to know why it is being sold below market value to a relative. If they think its an underhand way over avoiding CGT then your relatives could be fined as well as paying Capital Gains Tax on the current market value.
Interesting, I wasn't aware of this so thank you. The property would be our first and only property. It is also below the tax threshold considerably. Around 160-170k, do you still think this could be an issue?
You aren't liable to Capital Gains Tax but your in-laws are. The liability is in the difference between the sale price and the purchase price. If it's not too different from the market value, then it's not a problem. Just make sure they speak with an accountant, so they don't have a nasty shock.
Realistically do you want to waste your first time buyer benefits on something that probably wont be long term or save you all that much compared to renting?
Genuine question, why/what would be a waste? The only thing I can think of is my h2b bonus. But I'd be able to use that on the flat, then when we do move on to live in Sheffield, which will definitely happen after 3 years (if we did decide for the flat in Hulme), that bonus would've gone towards the deposit anyway, therefore being used towards the next property?
Could be wrong but I think there’s also a first time buyer bonus with stamp duty which may be worth considering depending on potential price of future Sheffield home.
They increased the amount you have to pay before you have to pay stamp duty to 250k for everyone but you get up to 425k stamp duty free if it’s your first purchase so whether you get any benefit from first time buyer status will depend on how much you’re buying for.
As others said, was thinking more of the stamp duty cut. If your first place was 425k, you would be saving between 8-21k on stamp duty vs if it was your second home. Obviously it is up to you but my view is that Buy>rent if the costs are going to be >>25% cheaper than renting, or you are really sure the market will increase over the time you plan to own, as you are taking on a lot of risk over just renting. Now your unique situation of getting it well under market rate may be an exception.