Selling/Renting Dilemma due to Relocation

Matty0682

I have a dilemma…here we go. My wife and I are currently living in London where we bought our first house 2 years ago. We have just had our first child and will be moving back home to Wales to be closer to family.

My dilemma is whether we should:
a) sell London house and buy in Wales
b) sell London house and rent in Wales during down-turn
c) rent out my house in London

I appreciate no one has a crystal ball, but I want to see what other people would do given the current economic situation. We have 20% equity

I am leaning towards option b, although we will incur a £6k early payment charge on the mortgage. But I read that economists/media believe house prices will continue to fall over the next 2-3 years at least (due to lack of first time buyers, banks requiring higher deposits, redundancies, Libor relatively higher against base rate etc).
Maybe this £6k hit is worth it to leave the housing market with the view of buying a house in Wales at the bottom of the market.

Your thoughts are much appreciated.
Matt

kier333

Matty0682 wrote: »

I have a dilemma…here we go. My wife and I are currently living in London where we bought our first house 2 years ago. We have just had our first child and will be moving back home to Wales to be closer to family.

My dilemma is whether we should:
a) sell London house and buy in Wales
b) sell London house and rent in Wales during down-turn
c) rent out my house in London

I appreciate no one has a crystal ball, but I want to see what other people would do given the current economic situation. We have 20% equity

I am leaning towards option b, although we will incur a £6k early payment charge on the mortgage. But I read that economists/media believe house prices will continue to fall over the next 2-3 years at least (due to lack of first time buyers, banks requiring higher deposits, redundancies, Libor relatively higher against base rate etc).
Maybe this £6k hit is worth it to leave the housing market with the view of buying a house in Wales at the bottom of the market.

Your thoughts are much appreciated.
Matt

Well clearly option 4 is best as when properties do increase London will be the fastest

Matty0682

Hi kier33,

What do you mean option 4?

If you were faced with a 6k early payment charge, would you consider selling house in order to rent for a few years?

Thanks

lostinrates

Matty0682 wrote: »

Hi kier33,

What do you mean option 4?

If you were faced with a 6k early payment charge, would you consider selling house in order to rent for a few years?

Thanks

Depends on how much your 20% equals in money, and how much of that you get back from sale.....and of course if it sells.

Can you let it? Some people are finding it is against the terms of their mortgage agreements from what I read here.

Thrugelmir

Always so difficult to comment as eveyones circumstances are different. If in doubt take the conservative option and bank the cash.

Matty0682

Hi lostinrates,

My house worth £250k (£50k equity). But I don't see how this equity figure effects my options.

I guess it all depends what % house prices fall. £6k seems a lot to pay in the short-term

If I rent out my house, I would still be exposes to this fall in the market (and this would require new mortgage)

Thanks

lostinrates

Matty0682 wrote: »

Hi lostinrates,

My house worth £250k (£50k equity). But I don't see how this equity figure effects my options.

I guess it all depends what % house prices fall. £6k seems a lot to pay in the short-term

If I rent out my house, I would still be exposes to this fall in the market (and this would require new mortgage)

Thanks

On what are you basing your house's worth? How much value do you think your equity still has? The figures would matter to me in the gamble. £6 k is not negligable...but of course more than that could still be lost from the (possibly reducing) value of your house.

How often will you be able to get to london easily, or how much would the letting agent's fees be, etc etc.

I don't pretend to have the answer, but I'd have lots more questions if I were faced with that decision now, myself. Good luck with which ever course of action you follow

Matty0682

My valuation is based on recent sales on my street (via sold prices websites) and actual estate agent valuations. A couple of smaller houses sold for 270-280k towards end of last yr, so my valuation is realistic due to stamp duty etc.

If prices fall by say 10% (conservative estimate according to some economists)this year, that's £25k based on my valuation. So maybe I've answered my own question.