Shall we buy again or rent for a while?

Moaner

Hi all, would like to pick your brains about an issue that is driving my partner and I round in circles. We currently own a 2 bed flat and have a small baby and we would like to try for another sooner rather than later.

It's a new build (2007) and is now starting to lose it's 'newness', which was a big part of it's appeal - communal areas not looking as smart now. The service charge for the flat seems to increase all the time, there always seems to be a bill to pay. Im worried it's going to put off prospective buyers, esp as most people have had to take a pay cut or a pay freeze.

My thinking is that we just get shot of it, I know in this current climate we will have to take a hit on it and will lose money (bought at the top of the market in late 2007) but i think it's going to become harder to sell it in the future. I would quite like the freedom of renting for a while so that we can watch what the housing market does as my insinincts tell me (im no expert) that the prices have got to come down further as no one can afford to buy. That way by selling and then renting, we will have the money sitting in the bank so that if the prices do drop that we can buy a bigger house than we could currently afford. There is the risk that the prices will rise, but I don't think it's likely??

By staying put here, im really scared we will be stuck for years, if the prices drop again and our family plans will be ruined. Any thoughts? Do you think we should sell it and then rent?

delmar39

No right or wrong answer, but if I were you I'd stay on the housing ladder. Yes, you could sell and then rent - prices could go up (you lose out) or they could fall again (you gain). Every option is a gamble and has its risks, but to me it sounds like you're ready for the off, just a case of whether you buy or rent. I'd buy everytime. Re new builds, we've had two in the past 6 years. Our old new build was still in tact and fine, so you could just decorate and do it up. It's not an impossible job. But like I said, it sounds like you want to get out of your current place, so choose your option and go for it...good luck.

QTPie

I think that it is a very personal decision that you must make yourselves... You will get all sorts of contradicting advice - you need to weigb up what is right fir your family and what makes sense in your area (since the property Market varies fromarea to area and sector to sector...).

I certainly like selling, renting, then coming back as a chain free buyer... We have never had to sell to buy and I think that it makes life a lot easier...

I think that most areas will either see a price fall (peobablyy not very large) or a stagnation... But who knows. The sector of the Market that we have been looking in, in this area, actually rose by 10/15% between Feb and April this year! Pent up demand, good houses coming on have been SNAPPED up (often before details getting onto rightmove) and this has allowed prices to take off...

Have you looked at the rental Market in your area? What is availability like and could you afford something reasonable (at the moment - at least in this area - rents tend to be higher than mortgage payments and oftentbe renal properties are not that nice...). Also you need to factor in the cost of moving...

Renting can be both a blessing (someone else maintains everything) and a pain (restrictions, avoiding damage, inspections etc).

You could get a valuation on you flat, look through the finances and go from there? You did buy at the peak of the Market and probably paid a premium for a new build.... I would also imagine that supply may outstrip demand in your sector....

At the end of the day there are always risks, but you need to do what is right for your family. We sold April 09, rented since, now hope to complete on purchase end of next month (our first child is almost 5 months old).

QT

Fire_Fox

Moaner wrote: »

We currently own a 2 bed flat and have a small baby and we would like to try for another sooner rather than later.

It's a new build (2007) and is now starting to lose it's 'newness', which was a big part of it's appeal - communal areas not looking as smart now. The service charge for the flat seems to increase all the time, there always seems to be a bill to pay. Im worried it's going to put off prospective buyers, esp as most people have had to take a pay cut or a pay freeze.

If you think the service charges and standard of maintenance may be offputting to a buyer what are you doing to address this? Have you formally requested a certified copy of the accounts? Have you formally requested to view the associated documentation - service contracts and invoices?

I did this and it was most enlightening. Leaseholders were paying thousands for services we were simply not receiving such as monthly window cleaning. The caretaker was verbally instructed, so we were being invoiced for works he was not contracted to do, charged enough for lamps that you could have changed every lightbulb in the building twice a week for the entire year. Basically there was some [STRIKE]fraudulent[/STRIKE] creative accounting going on. :rotfl:

It's quite normal for service charges to double in the first few years of ownership, developers tend to set them artificially low to attract FTBs. Are the service charges reasonable by local standards (similar size and age of property)? Plain English explanation of leaseholders' rights and responsibilities under the legislation here
http://www.lease-advice.org/publications/documents/document.asp?item=14