Sell and then Rent?

davidb881

Hello,
Me and my family have now out grown our current home and decided in January to put our house on the market. We priced it correctly with good agents, but still expected a bit of a nightmare. However, thankfully we sold it in less then two weeks. The problem has been finding a property to buy. We live in mid Suffolk and we want to live in a particular town that has everything our young family needs. Our experience is that there is not a great selection of properties on the market and what is on the market, only some of that seems to be correctly priced. What is bizarre however is that stock appears to be selling. In fact, I have stuck to my guns on a couple of houses and actually got out bid, both times I have thought that the buyer had paid to much, but now I not so sure, supply and demand and all that.
Anyway here’s our conundrum. We are considering taking our equity and renting. Does anyone think this is a bad idea? Is there anything that is going to stop me getting back on the ladder in say 1 to 2 years? It seems a good idea to me, but I must think of my family. Anyone’s advice on this would really be appreciated.

Many Thanks

LydiaJ

Nobody has a crystal ball, and anyone who says they are sure what's going to happen to the housing market is either lying or deluded. Only you can decide what to do for your family, but here are the things I would bear in mind...

1) Don't overstretch yourself on a mortgage. Nobody knows how long interest rates will stay this low. Do not put yourself at risk of not being able to pay the mortgage.

2) Do not buy a house that you will only want to live in for a few years. Prices are still falling, and nobody knows how long they will fall for. Negative equity is only a problem if you need or want to move, so don't buy unless you'd be happy to live there for the long term.

3) Renting is not all bad. It has its disadvantages, but it is much more flexible than owning, especially once you've got past the end of your AST and are on a rolling contract.

4) There is quite a bit of activity on the market at the moment. Some people think this is the beginning of the recovery. Other people think it is a bull trap. You will need to decide which you think it is.

In your position, I would rent while looking out for somewhere to buy. Then if a house came up that was just what my family needed, at a price I could afford, then I would buy it. But I'm not in your position - you are - and whatever you do is a bit of a gamble one way or another.

Good luck,
Lydia