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Sell to rent?
SalexC
Posts: 16 Forumite
Hi all,
The missus and I are in a little quandary, wondering what to do and I thought I'd solicit some advice here...
1) We bought our house in Feb 2007 for £142,500; because of our previous mortgage misdemeanours we had to get a sub-prime product which expired in July. We put down 10% but because we had to add in some fees our loan outstanding is about £130,500. This is being serviced at £1,023pcm and is an interest-only product. Although our fixed-rate has expired we can't remortgage because we're still looking at sub-prime products, and 90% LTV is impossible to find in that market at the moment.
2) My partner's father is struggling to sell his house (reduced from £360,000 to £300,000 and still struggling) and he's considering putting it up for rent instead. It's only a mile or two away and is in a much more salubrious area of town. He's thinking of charging £900pcm for it, which is actually about £100 below average for the property and location. He bought another house a few months back so is just waiting for someone to take over their (huge, 30's) three-bed semi so he can move out.
3) I'm worried that the continuing slump in house prices will erode our equity until we find ourselves in the trap of negative equity...you can see where I'm going with this. Two estate agents have said we'd be lucky to get much over £140,000 for our house in the current market, but I'm thinking that losing £5,000 now is preferable to losing £14,250 in the next 12 months.
4) Some other background - we have a lodger who we'd like to get rid of, as we're in a (pokey, 70's) three-bed semi and having no spare room means we can't have friends over to stay (the easiest way to be sociable with a small child); our area has a stamp duty alleviation up to £150,000, so we could show a small profit on a sale without putting off buyers who'd otherwise be attracted to the stamp duty exemption.
5) Final point to consider is that our daughter (only child) is coming up to one year old...the schools around the potential rental property are lots better than the schools where we are; the idea was to live where we are for three years then move on up. It seems now like we either try to sell now and rent for 3+ years (in my opinion what it will take for the market to re-stabilise), or stay put for the same period and put our daughter in an inferior primary school.
So, what should I do - sell and rent, or stay put???
(I'm sure there's pertinent stuff I've forgotten - as I remember I'll edit this post.)
Many thanks,
SalexC
The missus and I are in a little quandary, wondering what to do and I thought I'd solicit some advice here...
1) We bought our house in Feb 2007 for £142,500; because of our previous mortgage misdemeanours we had to get a sub-prime product which expired in July. We put down 10% but because we had to add in some fees our loan outstanding is about £130,500. This is being serviced at £1,023pcm and is an interest-only product. Although our fixed-rate has expired we can't remortgage because we're still looking at sub-prime products, and 90% LTV is impossible to find in that market at the moment.
2) My partner's father is struggling to sell his house (reduced from £360,000 to £300,000 and still struggling) and he's considering putting it up for rent instead. It's only a mile or two away and is in a much more salubrious area of town. He's thinking of charging £900pcm for it, which is actually about £100 below average for the property and location. He bought another house a few months back so is just waiting for someone to take over their (huge, 30's) three-bed semi so he can move out.
3) I'm worried that the continuing slump in house prices will erode our equity until we find ourselves in the trap of negative equity...you can see where I'm going with this. Two estate agents have said we'd be lucky to get much over £140,000 for our house in the current market, but I'm thinking that losing £5,000 now is preferable to losing £14,250 in the next 12 months.
4) Some other background - we have a lodger who we'd like to get rid of, as we're in a (pokey, 70's) three-bed semi and having no spare room means we can't have friends over to stay (the easiest way to be sociable with a small child); our area has a stamp duty alleviation up to £150,000, so we could show a small profit on a sale without putting off buyers who'd otherwise be attracted to the stamp duty exemption.
5) Final point to consider is that our daughter (only child) is coming up to one year old...the schools around the potential rental property are lots better than the schools where we are; the idea was to live where we are for three years then move on up. It seems now like we either try to sell now and rent for 3+ years (in my opinion what it will take for the market to re-stabilise), or stay put for the same period and put our daughter in an inferior primary school.
So, what should I do - sell and rent, or stay put???
(I'm sure there's pertinent stuff I've forgotten - as I remember I'll edit this post.)
Many thanks,
SalexC
Sell and rent, or stay where I am? 11 votes
Sell and Rent
90%
10 votes
Stay Put
9%
1 vote
0
Comments
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My slant on it: Is your partner the only child? Does your partner. Do you want to live with his parent? How old is his parent? I agree with point 3, but feel you will loose a bit more than £5000, unless you bought really well. I'd rather come up with a buyout rather than renting if of his father. If anything goes wrong the DSS would not pay rent on family members houses - not to sure if this has changed.
What ever you say about the lodger it is hard cash.
If you want to sell I fell you should sell now rather than later - winter is around the corner and is a bad time to sell.GOOGLE it before you ask, you'll often save yourself a lot of time.
0 -
Sell, if you can.Pawpurrs x0
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