House Selling or Renting Dilema

stoocake

Hi all,

I own a property in Falkirk, Scotland and currently renting a house in Worcester where I live and work. The flat in Falkirk is sitting empty and has been for around 4-5 months now. I have had it on the housing market for around 10 weeks and had very little interest in it - only 2-3 viewings in this time.

The Home Information Pack values the property at £72,000, and there is another identical flat on the street on the market for offers over £75,000. Mine is listed at offers over £69,750. I have just spoken to my estate agent and after a discussion, have agreed to drop the price to offers over £65,000, as I would accept an offer of around £68,000.

However, due to the housing market, and the price drop, I am going to be very lucky not to lose money on the place now. I have owned it for 3 years and don't have a massive amount of equity available.

The 2 options I see are (disadvantages in red):

Rent the flat out

• I've am already a registered landlord in Falkirk so have paid the necessary fees for this
• The flat is suitable to rent straight away and habitable (unfurnished), gas certificate etc
• I have a contact in Falkirk who is willing to do the leg work in finding tenants, arranging payments and even furnishings, etc for a very good price
• My mortgage is not a buy to let mortgage, so I will need to remortgage. With less than 10% equity and not wanting to be tied in to a deal for more than a year, my options are probably extremely limited
• I would still like to keep the house on the market during a tenancy if possible

Continue to sell the flat

• I have already paid around £1,000 for the HIP, estate agency fees, advertising fees, having the driveway renewed for the sake of presentation
• I won't have to remortgage as currently not on any fixed plan
• The flat itself represents some fairly miserable times in my life and my heart is heavy whenever I think about the place - selling would relieve me of this
• It will potentially be on the market for a long time, during which the costs will continue to accumulate, losing me more and more money
• I will have to start paying council tax on it soon I believe - may be wrong about this though

I have other debts (a personal loan and a 0% credit card) that I'd like to pay off within the next 8 months, and although I can afford both the loan repayments, the mortgage and my rent down in Worcester quite comfortably, I won't be able to pay off my debts nearly as quickly. Especially if interest rates increase.

Can anyone offer any advice on what might be a good solution out of my dilema, whether that's a 3rd or 4th option after the above, or a variation of any...any advice, recommendations and ideas would be highly appreciated.

Thanks,
Stewart

Fire_Fox

Have you accounted for income tax, service charges (factors) and empty periods on the letting? Have you asked your lender if they will give your permission to let on your current deal, or what alternative mortgage rate would be? It may be when you take these into account the decision is made for you.

stoocake

I have spoken to my current lender and they will charge me £2,500 and tie me in for 3 years at a higher percentage rate (can't remember off the top of my head but it was very high) to change my mortgage to a buy-to-let.

I will shop around for further mortgage deals and see if I can get anything cheaper, as this will probably form the basis of my decision as you say. If I can get a good deal then I can easily afford the income tax, empty periods and other costs, but I don't want to be bent over by my current lender, partly on principle and party on the sheer cost of it!

Lesley_Allan

stoocake wrote: »

Hi all,

I own a property in Falkirk, Scotland and currently renting a house in Worcester where I live and work. The flat in Falkirk is sitting empty and has been for around 4-5 months now. I have had it on the housing market for around 10 weeks and had very little interest in it - only 2-3 viewings in this time.

The Home Information Pack values the property at £72,000, and there is another identical flat on the street on the market for offers over £75,000. Mine is listed at offers over £69,750. I have just spoken to my estate agent and after a discussion, have agreed to drop the price to offers over £65,000, as I would accept an offer of around £68,000.

However, due to the housing market, and the price drop, I am going to be very lucky not to lose money on the place now. I have owned it for 3 years and don't have a massive amount of equity available.

The 2 options I see are (disadvantages in red):

Rent the flat out

• I've am already a registered landlord in Falkirk so have paid the necessary fees for this
• The flat is suitable to rent straight away and habitable (unfurnished), gas certificate etc
• I have a contact in Falkirk who is willing to do the leg work in finding tenants, arranging payments and even furnishings, etc for a very good price
• My mortgage is not a buy to let mortgage, so I will need to remortgage. With less than 10% equity and not wanting to be tied in to a deal for more than a year, my options are probably extremely limited
• I would still like to keep the house on the market during a tenancy if possible

Continue to sell the flat

• I have already paid around £1,000 for the HIP, estate agency fees, advertising fees, having the driveway renewed for the sake of presentation
• I won't have to remortgage as currently not on any fixed plan
• The flat itself represents some fairly miserable times in my life and my heart is heavy whenever I think about the place - selling would relieve me of this
• It will potentially be on the market for a long time, during which the costs will continue to accumulate, losing me more and more money
• I will have to start paying council tax on it soon I believe - may be wrong about this though

I have other debts (a personal loan and a 0% credit card) that I'd like to pay off within the next 8 months, and although I can afford both the loan repayments, the mortgage and my rent down in Worcester quite comfortably, I won't be able to pay off my debts nearly as quickly. Especially if interest rates increase.

Can anyone offer any advice on what might be a good solution out of my dilema, whether that's a 3rd or 4th option after the above, or a variation of any...any advice, recommendations and ideas would be highly appreciated.

Thanks,
Stewart

Hi Stewart,

Where about's in Falkirk is it?
I stay in Grangemouth, but have very recently just bought a flat in Stenhousemuir or could have helped you out! sorry.
If I know of anyone I would be sure to point them in your direction.

Fire_Fox

stoocake wrote: »

I have spoken to my current lender and they will charge me £2,500 and tie me in for 3 years at a higher percentage rate (can't remember off the top of my head but it was very high) to change my mortgage to a buy-to-let.

I will shop around for further mortgage deals and see if I can get anything cheaper, as this will probably form the basis of my decision as you say. If I can get a good deal then I can easily afford the income tax, empty periods and other costs, but I don't want to be bent over by my current lender, partly on principle and party on the sheer cost of it!

Without a decent amount of equity you will be unlikely to secure a BTL remortgage deal with any lender other than your existing one.

stoocake

Hi there, thanks for your reply. The flat isn't far from you - Carronshore, near Bothkennar church, a nice quiet location surrounded by fields and less than a mile to the motorway for Glasgow or Edinburgh.

I'm sure if I could generate the viewings, it would sell quite easily. If you'd like any more information then send me a private message, and I'd really appreciate any help available!

stoocake

Fire_Fox wrote: »

Without a decent amount of equity you will be unlikely to secure a BTL remortgage deal with any lender other than your existing one.

That's what I feared - I expect that's why my current lender are charging so much...because they can. It's a shame...if they were being slightly more reasonable with their products then they'd be making a lot more money out of me than they will be, but I guess with the value of my flat I'm barely a blip on their landscape.

Thanks

stoocake

I have just spoken to an advisor with a 3rd party BTL mortgage company who advised that I push my current lender into allowing me consent to lease. This will allow me to let me current place out whilst keeping it on the market, without having to change my mortgage product. I didn't realise this was possible, but as it's only 6 months to a year, if I stress that, they should allow it for their normal fee (around £100-£200 I believe)

I'll let you know how it goes.

Thanks

stoocake

I had arranged a meeting with the bank tomorrow, but they just phoned to confirm the appointment and explained what I was looking for. They won't grant me a consent to lease without changing to a Buy to Let mortgage and keeping me tied in for 3 years and charging a lot of money to do it.

Can anyone confirm if this is a final answer, or is it a case of the bank staff not knowing their own systems well enough? It's the Halifax if anyone can help.

Thanks

DevonGirl

Hi there - here are some comments in blue:

stoocake wrote: »

Hi all,

I own a property in Falkirk, Scotland and currently renting a house in Worcester where I live and work. The flat in Falkirk is sitting empty and has been for around 4-5 months now. I have had it on the housing market for around 10 weeks and had very little interest in it - only 2-3 viewings in this time.
There's no denying it's been hard recently for sellers, but I think you need to keep the pressure up on your estate agent. With you being so far away the temptation is for them to put yours at the bottom of the bunch, particularly as it is a flat and they won't make much commission out of it (sorry - not being snobbish - I too have a flat :sad: and get the impression they only care about the big houses with lots of commission waiting for them). I think you should ring them 2-3 times a week to check on progress so they don't forget about you.

The Home Information Pack values the property at £72,000, and there is another identical flat on the street on the market for offers over £75,000. Mine is listed at offers over £69,750. I have just spoken to my estate agent and after a discussion, have agreed to drop the price to offers over £65,000, as I would accept an offer of around £68,000.

However, due to the housing market, and the price drop, I am going to be very lucky not to lose money on the place now. I have owned it for 3 years and don't have a massive amount of equity available.

The 2 options I see are (disadvantages in red):

Rent the flat out

• I've am already a registered landlord in Falkirk so have paid the necessary fees for this
• The flat is suitable to rent straight away and habitable (unfurnished), gas certificate etc
• I have a contact in Falkirk who is willing to do the leg work in finding tenants, arranging payments and even furnishings, etc for a very good price
• My mortgage is not a buy to let mortgage, so I will need to remortgage. With less than 10% equity and not wanting to be tied in to a deal for more than a year, my options are probably extremely limited
• I would still like to keep the house on the market during a tenancy if possible

Continue to sell the flat

• I have already paid around £1,000 for the HIP, estate agency fees, advertising fees, having the driveway renewed for the sake of presentation
• I won't have to remortgage as currently not on any fixed plan
• The flat itself represents some fairly miserable times in my life and my heart is heavy whenever I think about the place - selling would relieve me of this - see comment below....
• It will potentially be on the market for a long time, during which the costs will continue to accumulate, losing me more and more money
• I will have to start paying council tax on it soon I believe - may be wrong about this though - not sure if it's the same in Scotland, but in my area of England I think you pay nothing for the first 6 months of it being empty, then a discounted rate. Still not great tho :sad:

I have other debts (a personal loan and a 0% credit card) that I'd like to pay off within the next 8 months, and although I can afford both the loan repayments, the mortgage and my rent down in Worcester quite comfortably, I won't be able to pay off my debts nearly as quickly. Especially if interest rates increase.

Can anyone offer any advice on what might be a good solution out of my dilema, whether that's a 3rd or 4th option after the above, or a variation of any...any advice, recommendations and ideas would be highly appreciated.

Thanks,
Stewart

I must admit I'm biaised because I'm about to put my flat on the market. However, I think you summed it up really when you said The flat itself represents some fairly miserable times in my life and my heart is heavy whenever I think about the place - selling would relieve me of this . I too feel the same way about my property. Some of my friends and family who undoubtedly have my best interests at heart tell me to 'hold on for another 36 months and make more money'. But at the end of the day if your heart sinks about the whole thing then I'd say life is too short really. I guess it's a bit different for me as I need to release abit of equity and am living in my flat, but I really empathise with that heart sinking emotion. It's such an energy drain.

Hope you don't mind me adding in abit about my situation - don't want to hijack your post! I really feel that if property can make you money and you are enjoying it, then great, but if it's not not making you money and making you sad then it's time to dump it....
Best wishes
DG

Catblue

Totally agree with the previous poster.

You have already physically and mentally moved on to your new life in Worcester - don't let the past drag you down. It might be a different story if you were still local to the flat, keen to be a landlord, had the cash and didn't have these negative feelings about the place.

Sell the flat and get on with your new life.