Sell or not?

cupid_s

DH and I cannot agree over this so I wanted to get some outside opinion from you lovely people. We bought our house for 100k, but like many others we have found it has dropped in value. It’s worth about 90k at the moment but that’s not to say anyone would actually be able to pay that and house prices will probably keep reducing month on month.

Our mortgage is currently £200 a month and this time next year we should be mortgage free. However staying in this house was only meant to be a short term thing. It’s just about big enough for us and one child so we are planning on moving somewhere bigger in the future (in 4 years time or so). However we can’t decide if we should just sell now and rent somewhere for those 4 years.

On the one hand if we could sell now, rent somewhere, and have the money in the bank, it would save us possible future price falls and we’d have the added benefit of living somewhere bigger for 4 years.

However it will be very difficult to sell in this market and we’d be renting somewhere which would be costing us £600 a month more than our mortgage currently is (and council tax and bills would be higher) and currently we have no need for anywhere bigger or better. However £600 a month is currently less than many houses are depreciating by!

Also we have no need to sell our current house to buy anywhere else. Soon we’ll be mortgage free and with enough savings for a good deposit for another house. I know selling is a hassle and we’d have to get a HIP and give up time for viewings etc (and time is something we are particularly short of at the moment) and we might go through all this and not even be able to find a buyer.

We just don't know what to do. Any thoughts?

poppysarah

Save like a mad thing and clear the mortgage and keep saving really hard. Make your decision when you've got a big bundle of cash and actually want to move rather than worrying about the market now.

You're in a fabulous position! What a low mortgage! Most people would be green with envy!

confused31_2

Do you think your house will drop 30,000 pounds in the next 4 years??

It will cost you 28000 pound in rent and then you have things on top if i was you i would stop.

A house of 90,000 pound now should not drop 30,000 pound and if it does in 4 years it might have dropped 30,000 and come back up 10,000.

For all the hassle i would just stop where you are, when your ready to move sell then.

lolarentt

I can't see you've any good reasons for selling and renting; why swop a £200/m mortgage for a £600/m rent? The house selling/buying thing works both ways of course so if you sell in the future whatever has happened to the market will have affected the house you buy as well.
The price slump might have bottomed out. My neighbour, who manages a local branch of a national estate agents, has found an increase at last in house sales and enquiries over the last month (OK from a very low base) and spring usually brings increased activity, as well as Gordon reducing the cost of borrowing to an all-time low which should perk things up. Halifax report an increase in prices for January as well

cupid_s

lolarentt wrote: »

I can't see you've any good reasons for selling and renting; why swop a £200/m mortgage for a £600/m rent?

Actually it would be swopping £200/m mortgage for £800/m rent. So the difference is £600!

We would have tonnes more space though and be living in a much nicer area. However we'd have to find somewhere that will accept pets and children and we'd have less security.

I too don't see the point in selling yet. I love my house so much (despite it being small and in a really rubbish area) I never want to sell though! DH is just worried that we'll end up with a house that's worth so little we'd be better to rent it out and he has something against this.

We are currently saving like mad (saving 2k plus each month) and I don't think our house would drop another 30k in value (though you never know!).

Even if it did we'd have saved almost 100k in that time so I don't see the problem really

pawpurrs

I would stay put, at the moment your low mortgage is enabling you to save, and even if prices come down as you say, as you are going to be buying somewhere bigger then that will be even more off than you lose. I cant see the point in your case for selling up now.

lolarentt

cupid_s wrote: »

Actually it would be swopping £200/m mortgage for £800/m rent. So the difference is £600!

Sorry! Must read more carefully.

Sounds like you don't need any convincing to stay put anyway!

Squish_21

No brainer...Stay put!

cupid_s

But…. If we (managed to) sell now we’d miss out on some of the price falls and when we found our ideal next home we’d be in a better position to proceed with the sale.

confused31_2

You said it yourself you will be mortgage free in a year, your looking to buy in 4 years and you will have 100,000 pounds saved by then as a deposit.

If a bargain comes up in a few years you will be able to buy anyway, you could even let out your current house.

becky2011

Stay where you are, you will be in a great position when your mortgage has been paid off.
Save, save, save!