We are currently renting an apartment in London. Our landlord wants to sell the apartment. According to the real estate agent due to some heavy construction works on the external part of the building, it is currently not possible to get a mortgage on the apartments in the building. The works are likely to continue for about 2 years. Because of this, the owner of our apartment has drastically reduced the asking price. A very conservative estimate is that the current asking price is at least 20% below similar apartments in our area. We are now thinking of buying the apartment, as we could pay for it without taking a loan. We are anyway currently looking to buy something, even though normally we would look for something much bigger and finance it through a mortgage. Given our plan to start a family we probably would not live in the current apartment longer than 2 years. So what we could do is to buy it now and then after 2 years when the construction works are done sell it or rent it out.
The disadvantage of this would be that I need to lock up a large amount of my net worth in the apartment. Also we would have to continue living here for 2 years and deal with the construction noise and disturbance, but that seems acceptable for now. Of course it is always possible that the works will take much longer than estimated. On the positive side, this area here is quite nice, so it should not be a problem to find someone to rent the apartment. We could then take a buy-to-let mortgage when the works are done and use the capital released from this to buy a bigger house for us to live in. Unless there is a huge real estate crash, due to the attractive asking price the apartment should be worth more in two years than now, and even if the market is contracting we have a nice margin of safety.
Is there any mistake in my analysis? I have no experience with real estate investing, so possible I am too naive. What would you recommend given the information I have given you here?