Opinions and advice re selling up and renting

chergar

Hi I am looking for a wee bit of advise and your opinions on our situation.

We have a 2 bed house that is mortgaged, there is roughly £64k ouststanding on the mortgage and redemption penalty is about £2k, we are fixed at a 6% rate for the next two years!!. I haven't had a valuation yet but think the house might be worth between £77-82k based on houses in the area, nothing exactly the same as ours has went on the market recently.

We have two children, a boy and girl aged 6 and 3 so they will evenntually need their own rooms and space is an issue with toys and what not.

We can't really afford to buy a bigger house, looking around all the ones that meet our requirements are too expensive and our credit history isn't perfect so may have an issue getting a new lower rate mortgage or even a larger mortgage to allow the move.

So we have a couple of options and one that is appealling is selling up our house and paying off some debt then putting the rest of the equity into a long term savings account (that we haven't set up yet but will look into once we have decided what we are doing) and finding a bigger house on a private rental.

What are your opinions on this, is it a silly move, should we just sit tight on the property ladder and hope that we can someday afford to move to a better house or should we jump off the ladder and rent, what are the prpos and cons of such a move?

All opinions and thoughts are appreciated, thank you xx

Cookie124

I'm in a similar situation to you. The best house we can afford in our area is a tiny one bedroom cottage and although it's lovely, we're starting a family and so need somewhere bigger. There's nothing bigger we can afford so we've decided to move into rented as we could get a much better house for the same amount of money we're paying in our mortgage. We did however buy a house (well more of a shell really) in France a few years back when they were cheap, so we're using the equity to make a start on the renovations, which means we will have a property as an investment (and of course a holiday home and retirement place!).

I do think the house prices here will go up, so it depends how much the lack of space is bothering you and whether you will be annoyed if you see your house up for sale a few years later and you cant afford to buy it back! One piece of advice I'd give you is to be really careful what you do with the proceeds from your house as it's really easy to fritter it away.