Get rid of Apartment at all costs?

CPS

Thanks for all your comments folks and they all make sense. Anyway, spoke to my estate agent and they liked the apartment but wont be making an offer as they can get a semi detached house for not too much more (the problem of having our apartment at an unrealistically high price I guess).

So its full steam ahead paying down the mortgage and hoping the market is closer than I predict to bottoming out and keeping my savings when we hit bottom. Slightly disappointed but as you all seem to think - for the best.

Cheers.

daveb975

QTPie wrote: »

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?

This is the key point, and is often overlooked. All of this equity made in houses over the last ten years only becomes real money when the house is sold. Similarly, your negative equity is only a paper loss unless you sell your flat.

Your £25k savings are real money right now, and you are going to need a significant amount if you are going to buy at the bottom of the market. If this crash is as deep and protracted as many people think, houses will be really cheap compared to today's prices, but the only people that will be able to afford them are cash buyers and those with huge deposits.

Most banks require 25%+ deposits now to get a decent rate, and if they have to repossess and sell a lot more houses for less than they are owed this requirement is likely to increase rather than anything else.

If your jobs are safe, and you are happy to have a child or two in the flat, I would be tempted to keep the flat, keep the £25k and add as much as possible to that pot whilst paying down your mortgage. Perhaps keep it on the market just in case you do get someone who comes along and is prepared to pay asking price for it.

We really are in uncharted territory this time, and it looks likely it will take a long time to reach the bottom. On the other hand, IF things improve quicker than expected and your flat hits peak value again in 5-6 years, you would be very disappointed that you has blown your £25k to spend 5 years renting - especially if you ended up missing the bottom of the market next time around.

pinkshoes

If it's 2 bed, then you don't NEED to move at the moment.

Personally, I think you should use the £25k to pay off some of the mortgage, then continue to pay the same amount each month so that you're overpaying.

Then... when the time comes and you NEED somewhere bigger (perhaps when you have a 1 or 2 year old - so at least another couple of years if you're only just thinking about starting a family!), assess what it's "worth". If it's dropped more in price, then just rent it out (by this point you will have paid off a fair bit of the mortgage, so rent will hopefully cover repayment mortgage) and rent somewhere else yourselves, or sell if you feel the price is ok.

Trollfever

and they liked the apartment but wont be making an offer as they can get a semi detached house for not too much more

And in 6 months time a detached house for around the same price.