House just been valued

Maisie11

Blimey, I only asked for some advice. Not sure I welcome some of the comments. Anyway, thanks Doozer Girl for putting things back on track.

To recap:

1. We have potentially a house worth £1 million ish pounds. We have a mortgage of £280k with 12 years to go. When we move we will buy a place at approx £700-£750k using our current mortgage which we WILL not increase. The difference between £700-£1 million will be used to fund the boys education over the coming years and allow us to continue the very comfortable lifestyle we have. I am not particularly impressed by one response that questions what we are chosing to spend our money on. What has it got to do with them?? I was state educated, my husband was a private day pupil. My mother is an ex school teacher. The schools the boys go to open their doors to the state sector.

Of course I would like to use the state system. Why on earth would I want to pay again if I didnt have to? We are just two normal people trying to do the best for the boys. Of course at their schools there are parents who dont have any worries about paying the fees, that is just life but I think you would be surprised how many people are just like us trying to make the best decisions for the children.

Labour has tinkered and tinkered with the education system. We still have the grammer schools in our county. Our children are not really grammer school pupils. One has a very late August birthday and would be the youngest in the class. I have no doubt we would be able to get him through the 11+ but then 7 years of always struggling - I dont think so.

pickledpink

Hi Maisie

If you manage to sell your property at £1.2M you need to take in account your present £280k mortgage, legal fees, estate agency fees, stamp duty for your new property -providing you buy a property in the £700k range - and that should leave you with approximately £170k lump sum cash - and NO mortgage to pay!

The money you would save from not having to pay a mortgage should help somewhat to school fees, surely? However, if the school fees are going to cost you around £50k a year then £170k is only going to see your children through the first 3 years' or so: what will you do then?

Your new house will be less valuable than your present house............I personally wouldn't consider it. If you and your partner have a fab income and already live lavishly surely there's a way round this rather than having to downgrade?

I'm afraid to say if you are having to downgrade to pay school fees then you cannot afford the lavish lifestyle you are living. That's what's called reality.

PP:money:

dopester

pickledpink wrote: »

I'm afraid to say if you are having to downgrade to pay school fees then you cannot afford the lavish lifestyle you are living. That's what's called reality.

I half agree with you, but say a future crash of just 20% on prices in her area,

£1.2 million = £240,000.

Capital Economics are saying it could take 25 years for house prices to recover, which I tend to agree with.. if not 50 years. We have lived in extraordinary times.

The economics consultancy said that house prices could fall 35% over the next three years and provided the market was stable, prices would not reach 2007 levels until 2036.

If she could get out now and downgrade with a 10% cut to get a quick sale = possible £120,000 saved.. going towards the hit on downsizing.

The top-end gets hit hardest in a crash, and like Merryn Somerset-Webb said in a recent interview... the crash hits across the board (or words to that effect).. at the bottom end of the market and the top end of the market.

Maisie11

I know what you are saying about paying off our mortgage as it would give us nearly £32,000 extra per year. However, we have recently taken a 5 year fixed rate mortgage so we dont fancy paying the penalty of over £8k.

We would prefer to KEEP our current mortgage at least for the next 5 years. The equity would go on deposit somewhere (if we get to this stage I'm coming back on the forum for suggestions as to what we do with it!). Maybe we would look at paying some school fees in advance. We wouldnt take any risk with the money and it will make us feel much better about the financial climate.

Also downgrading to a £750K house is still going to get us something fab. We would look to move to West Oxford as both of us are flexible work wise. My husband would travel a couple of days to the office (he owns his own company) and I work for a very large multi national company and am officially home based so again there is no issue there.

I have already seen some lovely villages in the area and over the weekend we are going to look at some houses from the outside within our price range (I have already seen some).

The reason for the price difference is really location. West Oxford is not as convienent as our current area for a number of people hence the price difference.

Most important thing for us is our children's education and we have seen the results of private education and wouldnt dream of taking them out of this environment (please no more comments about state/private)

meester

pickledpink wrote: »

Hi Maisie

If you manage to sell your property at £1.2M you need to take in account your present £280k mortgage, legal fees, estate agency fees, stamp duty for your new property -providing you buy a property in the £700k range - and that should leave you with approximately £170k lump sum cash - and NO mortgage to pay!

The money you would save from not having to pay a mortgage should help somewhat to school fees, surely? However, if the school fees are going to cost you around £50k a year then £170k is only going to see your children through the first 3 years' or so: what will you do then?

Your new house will be less valuable than your present house............I personally wouldn't consider it. If you and your partner have a fab income and already live lavishly surely there's a way round this rather than having to downgrade?

This is I think the OP's current area at £1.15m:

http://www.rightmove.co.uk/viewdetails-6886380.rsp?pa_n=1&tr_t=buy

Not what I'd call lavish. Nice for sure, but not lavish, not even close. Oxford will give you more house for less money (though it's not cheap either).

I'm afraid to say if you are having to downgrade to pay school fees then you cannot afford the lavish lifestyle you are living. That's what's called reality.

It's clearly not a case of a lavish lifestyle, merely that the OP has a need for an extra £10k or so per year for the next 12 years, and it's sensible to sell part of an overvalued asset to fund this.

Maisie11

We dont need ALL of the spare equity for school fees, in fact in a good year we dont need any of it but it seems sensible to move house so that we dont have to worry in future years.

Interesting what you say about Gerrards Cross (one of the most expensive areas in the country to live in). Up North you could get a mansion for this price but it is not there, it is one of the most desirable places to live hence the large price tag. Friends in the North cannot believe the prices down here. Although I dont think that they can be sustained areas like Gerrards X will always cost more just like bigger houses will be owned by people who have more money.

BTW - I dont live in Gerrards Cross but you are in the right area. Our house is actually nicer than this. You get slightly more for your money where we live because you are not within walking distance of the train station into London.

pickledpink

Hi Maisie

I can understand you not wanting to worry about your finances, but that £170k equity will only pay the school fees for 3 years; what will you do afterwards if things go pear-shaped?

Surely you'd be better off clearing your mortgage (even with the £8k penalty) and not having to worry about keeping the roof over your head. That takes precedance over school fees. Remember, mortgage/rent ALWAYS comes first!! Before ANYTHING!

Incidentally, if you're paying around £2.600 a month on a £280k mortgage that sounds expensive; why are your repayments so high?

pp

meester

Maisie11 wrote: »

We dont need ALL of the spare equity for school fees, in fact in a good year we dont need any of it but it seems sensible to move house so that we dont have to worry in future years.

Interesting what you say about Gerrards Cross (one of the most expensive areas in the country to live in). Up North you could get a mansion for this price but it is not there, it is one of the most desirable places to live hence the large price tag. Friends in the North cannot believe the prices down here. Although I dont think that they can be sustained areas like Gerrards X will always cost more just like bigger houses will be owned by people who have more money.

BTW - I dont live in Gerrards Cross but you are in the right area. Our house is actually nicer than this. You get slightly more for your money where we live because you are not within walking distance of the train station into London.

Gerrards Cross is a bit dull really (along with the Chalfonts) and of course overpriced. The area around Sunningdale is nicer IMO, if you want superpricey housing. It was quite funny when John Prescott decided to annoy everybody there by building the Tesco, even better when the train line caved in as a result.

Rikki

There is a thread running about private versus a state education.

This not the question asked by the OP and is best left out of this thread.

pickledpink

I'm still curious to know why her mortgage repayments are so high???:eek:

MAISIE, ARE YOU THERE?????:j