Rent in the City but Buy in the Country; (1) Finance (2) as Urban Prices Escalate, First-Timers Are Looking out of Town to Get on the Housing Ladder

The Mail on Sunday (London, England), September 28, 2003 | Go to article overview

Rent in the City but Buy in the Country; (1) Finance (2) as Urban Prices Escalate, First-Timers Are Looking out of Town to Get on the Housing Ladder


Byline: NEIL SIMPSON

Sky-high house prices in big cities are forcing many first-time buyers to look long-distance to get on to the housing ladder. Increasing numbers are turning to the country or the provinces to buy affordable homes - while still living in rented accommodation and working in the city.

'People want to own property and if they can't afford to buy where they live and work they are starting to look elsewhere,' says Harry Palmer of Truman's Estate Agents in Lincoln.

'Workers also don't see the point of paying high prices for London homes if they're planning to stay in the capital for only a few years.

But they don't want to be out of the property market either, so they buy now where they plan to live in the future. They can rent out the homes until they are ready to live in them.' It sounds ideal. But just how easy is it to achieve and what can go wrong? Experts say young long-distance buyers need to be wary of three key issues.

THE RIGHT PROPERTY

Househunters depressed by high prices in London and the South East can sometimes believe property everywhere else looks like a bargain. But some homes could be cheap for a very good reason - and local estate agents love it when out-of-town buyers pick them up without finding out why.

Buying where you were brought up or where your family live means you are less likely to make mistakes because you know the area.

'The best buy-to-lets, in particular, tend to be in areas the buyers know very well and understand,' says Mike Henry, head of mortgages at Bristol & West. 'Ideally, you want a good contact in the area where you are buying who can give you the latest information on the number of rival landlords there and the likely demand from tenants.' If you are buying property purely to make money then you also need to be aware that buying cheap reduces your gains in a rising property market.

The return on money put into property as an investment is likely to become far more modest than in recent years as house price growth in the provinces is slowing.

THE RIGHT MORTGAGE

There are two ways for young first-time buyers to get mortgages to buy long-distance. The first is to apply for a standard residential loan, even though you'll be living in the property only at weekends and during holidays.

The second is to take out a buytolet mortgage when you plan to rent the property out to others fulltime.

Neither should present insurmountable problems. Lenders may not like the idea of taking on absentee owners, even those who plan to visit their distant homes regularly. But experts such as David Hollingworth of brokers London & Country in Bath, Somerset, say most applications should still be approved.

'Lenders are used to people buying in advance of a career move, for example, so the fact that your current address is some way from the property you're buying should not set any warning bells ringing.' The buy-to-let world can be more difficult, however. Lenders normally require deposits of at least 15 per cent of the purchase price and many will only take on borrowers who can prove a minimum of one year's payment history on an existing residential mortgage.

'Many lenders won't like the idea that your first mortgage is a buy-to-let,' says Lee Grandin, director of broker Landlord Mortgages in Wokingham, Berkshire. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Rent in the City but Buy in the Country; (1) Finance (2) as Urban Prices Escalate, First-Timers Are Looking out of Town to Get on the Housing Ladder
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.