Get rid of Apartment at all costs?

CPS

If prices keep falling, it will be years until my repayments catch up with what my place is worth. Even if I use the £25k to pay down the mortgage (which I still see as a waste as I am paying down a mortgage I have clearly overpaid for, the same a susing it to sell??), I will still need to overpay by quite a bit to pay down the mortgage to a point I can sell and all my savings will be gone with me owning a house/perhaps have a child. If I get rid now using the £25k now, I can rent and save quicker now to start again.

My current repayments do not cover any rent i would get, even IO unfortunately.

Not sure I am explaining my position very well. Might not even get an offer so it could all be irrelevant and then I will go to Plan B and use the £25k to pay down the mortgage and overpay while I can

mlz1413

Ok look at it this way if you are currently paying £700pm a mortgage and you can only rent the house for £500 then it's clearly not worth renting it out.

But that said if you sell it and you have to pay £500 rent to live in the same type of flat then then you will have spent £25,000 to save £200pm
£25,000 / £200 = 125 months or over 10 years to save back the lump sum spent.

But £25,000 paid off a mortgage at 5% is a saving of £100 pm - so your currently monthly mortgage payment will be worth £100 capital payment a month.

Staying where you are will save you your redemption fee, moving fees, LA checks and deposits, it will also mean you are not moved on every 6 months spending more on moving and checks.

CPS

Ok, Thanks. I gave a choice of 2 options in my first post and it appears to be an overwhelming dont sell unless you have to. Certainly food for thought.

CPS

mlz1413 wrote: »

Ok look at it this way if you are currently paying £700pm a mortgage and you can only rent the house for £500 then it's clearly not worth renting it out.

But that said if you sell it and you have to pay £500 rent to live in the same type of flat then then you will have spent £25,000 to save £200pm
£25,000 / £200 = 125 months or over 10 years to save back the lump sum spent.

But £25,000 paid off a mortgage at 5% is a saving of £100 pm - so your currently monthly mortgage payment will be worth £100 capital payment a month.

Staying where you are will save you your redemption fee, moving fees, LA checks and deposits, it will also mean you are not moved on every 6 months spending more on moving and checks.

My main point of all of this is that my flat is probably going to keep falling in value, hence to get out now will save me a lot more than you outline above and enable me to buy at the bottom of the market, saving me more than £25k probably....?

MX5huggy

It depends on where you think house prices are going if you belive that prices are gong to fall 50% from now then maybe it is worth while, but I think you have missed the sell and rent through the drop buy about 12 to 18 mths.

Thrugelmir

CPS wrote: »

Ok, Thanks. I gave a choice of 2 options in my first post and it appears to be an overwhelming dont sell unless you have to. Certainly food for thought.

Which ever option you choose in the longer term. Paying down your mortgage as much as you can immediately should be a priority.

QTPie

CPS wrote: »

My main point of all of this is that my flat is probably going to keep falling in value, hence to get out now will save me a lot more than you outline above and enable me to buy at the bottom of the market, saving me more than £25k probably....?

But doesn't it depend where/when the bottom of the market is? Will you have enough of a deposit saved up again by then?

If it takes you another two years to save up a deposit, then things COULD be going back up again by then (some predictions are for a "short, sharp rebound", but who knows... :rolleyes: ). What you don't want to do is sell in a buyers market (considerably undercutting the market) and then not be able to afford to buy again until you are well into a sellers market...

There are people out there staartying families in two bedroom flats. There is a couple living above our garages in a two bedroom flat. They have been there for 5 years and the baby was just born then.

It is a very personal risk, at the end of the day, and completely down to you... NOBODY can be certain where the property market will go next: some people think it will drop another 30%, others think that there will be a short sharp rebound possibly in 12 months time... Who knows! It is all a big gamble...

Good luck, whatever you decide.
QT

mlz1413

CPS wrote: »

My main point of all of this is that my flat is probably going to keep falling in value, hence to get out now will save me a lot more than you outline above and enable me to buy at the bottom of the market, saving me more than £25k probably....?

That's a risk only you can decide to take.
Personally if I could afford the mortgage payments I'd stay where I was for the security of knowing I'd not be kicked out if I pay the bills, unlike rentals where you can be moved on every 6 months.

What happens if you sell now, move out in 2-3 months time sign a tenancy and then in 9 mnts time see prices are excately the same - will you still be pleased you sold?

QTPie

mlz1413 wrote: »

What happens if you sell now, move out in 2-3 months time sign a tenancy and then in 9 mnts time see prices are excately the same - will you still be pleased you sold?

Plus, at the moment (depending on what you have to sell and where) you pretty much have to "undercut" the market to sell... So if prices don't fall much further, you may find that you have sold for less than things are selling for in 9 months...

It is difficult... it is not to say that now is a bad time to sell, completely, (hey, I am just selling...) but what would worry me - in your position - is that you would be selling and have no way to get back on the housing ladder again for probably a couple of years...

QT

cupid_s

How much is the shortfall between the mortgage and what rent you could get? If it's only £200 then your 25k would pay a lot of months of shortfall which surely is better than throwing away 25k now?

We are in a similar situation (only we are lucky we're not in negative equity and we could rent out for enough to cover our mortgage) and have decided to stay put as long as possible and to save as much as we can so that we can still buy a new house when the market bottoms out - but without having to sell our current house (which we will probably rent out).