A little guidance required!

cycleboy

Help required,

We are considering selling our current property & moving into rented. By doing this I will be able to save roughly £2000 a month which we will be using for a future deposit. With the current market, is this a good idea?

Our current property is valued at £300k which means we still have equity in it and other houses in the area are selling.

Looking forward to your responses.

thebaldwindowfitter

depends what renting will cost you

SavingSteve

If you can sell it quick then great, but the other side, if you have to heavily discount when will you be in a position to buy again? Will the market be in a worse place? If yes then you gain. If the market picks up then you will more than likely lose.

You're in effect gambling that the market will stay the same or fall, which is a decent short term bet. Depends how long you wait though.

Hindsight is great, if you could've done this a year ago you'd be quids in!

feeta

We're in the same situation as you...

As SavingSteve says, all it really boils down to is if you're willing to gamble on the housing market falling and staying low.

No one knows what the market will do but its a fair bet that it wont rise for another year or so. If you were renting temporarily while looking for another house you would probably be ok but if I were you i'd be searching houses the whole time because as soon as there is any sign of a change in the market and prices rising, you can bet that sellers will be straight onto it.

Just my 2p

cycleboy

Many thanks for that, I sort of new the answer but just needed to hear it from others. Gonna have to do some thinking.

Cheers again.

Cissi

Up to a year or so ago I'd have said "absolutely", now I'm not so sure... I think house prices are now falling faster than rents in most part of the country, and many of those of us who are renting are now finding it more expensive than owning, for the first time in a long time. Don't forget that low interest rates mean that your savings will be earning very little. And don't forget to factor in the costs of moving twice.

On the other hand, it sounds as if your long-term plan is to move into something bigger, and now may be a good time to do this. I think in your shoes I'd try to sell your house and keep an eye on possible houses to buy, looking for a good deal. If necessary I would rent for a while, but I'd be looking to buy again in the next year or so.

Premier_2

cycleboy wrote: »

Help required,

We are considering selling our current property & moving into rented. By doing this I will be able to save roughly £2000 a month which we will be using for a future deposit. With the current market, is this a good idea?

Our current property is valued at £300k which means we still have equity in it and other houses in the area are selling.

Looking forward to your responses.

You've got equity in the existing property. Why are you looking for an even greater deposit? Are you hoping to massively upgrade?

The £2k per month you could save, is that just from the saving in mortgage payments? A mortgage of £250k only costs a bit over £1k per month interest based on a 5% interest rate. So how much could you save per month without selling up?

How much will it cost to rent a £300k equivalent property? Or are you planning on slumming it a while in some rabbit hutch before buying that mansion you need a big deposit for?

cycleboy

Premier wrote: »

You've got equity in the existing property. Why are you looking for an even greater deposit? Are you hoping to massively upgrade?

The £2k per month you could save, is that just from the saving in mortgage payments? A mortgage of £250k only costs a bit over £1k per month interest based on a 5% interest rate. So how much could you save per month without selling up?

How much will it cost to rent a £300k equivalent property? Or are you planning on slumming it a while in some rabbit hutch before buying that mansion you need a big deposit for?

We do have equity in our property (if it sells!) roughly 40k. My current savings are 1k and my mortgage is 1.7k if I rent a £700 property I can turn my savings into 2k a month....... am I missing the point here? and basically am I beeing daft?

Sonofa

cycleboy wrote: »

We do have equity in our property (if it sells!) roughly 40k. My current savings are 1k and my mortgage is 1.7k if I rent a £700 property I can turn my savings into 2k a month....... am I missing the point here? and basically am I beeing daft?

Yes you are being daft. You can turn your savings into 2k in a month

+ your 40k you hope to get out of the sale, but you still only save 1k per month.