Options Needed

HB55

Hi Everyone
I'm hoping for some advice or ideas to help with my current situation:

My wife and I own our property, a 2 bedroom flat, we were in the fortunate position about a year ago to pay off the mortgage, the flat itself has been on the market for about 18 months to date and at the time it was seen as a good idea as we could save more than we were spending on the mortgage and have a big deposit when we eventually sold it

A year on and we're getting desperate to sell, the price has been lowered and lowered and our lives are on hold until we can get rid of the flat, we are expecting out first child in about 7 months and are starting to feel that we can no longer just wait for things to pick up, so we're looking for alternatives, some of the options we can think of are:

Lowering the price again, its currently up for £79k having been originally in the high £80k's, there are other flats for sale in the are but its the cheapest, we don't see lowering it as losing money on the original price (£75k) as it would be all deposit, we're looking to buy something in the £100-£120k range so would have at least 50% towards that, its an ideal FTB property but where are they? Do people feel that the FTB market is moving at all?

Renting out the flat and using the money to part fund a new property, however according to rightmove.com there are three other flats available for rent in the immediate area so it doesn't look like there is much of a local market for it. Renting is seen as our last option as we don't want the (perhaps perceived) hassle of worrying about another property

Using the value of the property towards a larger mortgage, can we use the property as collateral on a larger mortgage or for something like a secure loan? What are the pros and cons of this?

Buying a smaller second property, we have about £8k saved, so guess could get an £80k mortgage for a small house and then upgrade once the flat is sold (and possibly rent it out in the meantime) Again, could we use the value of the flat to help?

We're going to see a couple of lenders and advisers over the next few days but would like to know what are options are before we go into these meetings so we've got a better picture of what to expect and what to ask for

Any ideas or advice would be appreciated, thank you

HB

Cissi

To be honest, since you're in the very fortunate position to have paid off your mortgage, I'd do whatever it took to sell it now and make a clean break. You mention that it was initially on in the high 80s 18 months ago. This was around the peak, so if it didn't sell then, it was arguably priced too high. In addition, prices have fallen by almost 20% since then. In your shoes, I'd bite the bullet and market it at a price that makes sure it's a lot cheaper than any other similar properties in the area. Just under 70k at the most, maybe even lower, to grab buyers' attention. Once you're in the right range to attract interest you may well find that you get offers near asking price.

You sensibly say that you don't see a lower price than what you originally paid as "losing" money, since it would all be deposit. I'd go for it now, be bold!
Good luck.

gordano_2

You are in a fortunate situation .. but like most are finding, it is difficult to sell right now.

If you were to rent your flat you could get a buy-to-let mortgage, and the interest could be offset against rental income (up to the price you originally purcahsed). You could then use this capital toward a deposit on your next property.

You could also test the local rental market using free advertising sites such as www.simple2rent.co.uk and www.gumtree.co.uk- at least then you can get a feel for what rental demand is like before going down that route.