Should we sell or rent it out?

NoAngel

Sorry to bring this up again! Just another question- if we were to sell our house and just buy one of the same value in the new location, would this work?

Edit- sorry just reread what people said, and apparently we'd still need the deposit. Decided not to rent it out after all as someone pointed out becoming a landlord will be hard enough without being 250 miles away too! We're selling the house whether or not we buy another- so probably will rent when we move. OH may stay up here till it's sold, or we'll just leave it empty. Thanks for all previous advice!

neverdespairgirl

NoAngel wrote: »

If we sold now and didn't buy another house- then surely we'd have nothing to show for all that mortgage already paid? This is why it's such a dilemma We may as well have never bought in the first place and rented somewhere like this for £400pm and saved a fortune. I always imagined that once on the property ladder we'd stay on it.

Thanks for the advice!

You haven't got anything to show for it now - all the money's gone, if the price has fallen.

More a property snake than a property ladder, at the moment.

NoAngel

Had the house valued and it's worth less than we still owe on the mortgage! (Which is believable, and next door have had theirs on the market for a while with no interest). It's a fixed term mortgage that ends in a year. Soo- looks like I'll be renting a place 200 miles away for new job AND we'll be keeping an empty house up north too! So weekends home to visit parents/friends are sorted out accommodation wise... Asked Halifax about consent to lease, but don't have enough equity in it to be allowed. :-( Looks like buying a house was the biggest mistake we ever made.

Svenena

Well at least you had a roof over your heads for those 4 years. And you've learnt a lesson - you could have saved money by renting instead of buying (a lot of FTBs on here think it will be cheaper to buy than to rent, but you've demonstrated this isn't always the case). If you rent a place for less money than you were paying on the mortgage, you'll be able to save up to have a much larger deposit in the future, if you decide to buy again at some point.

NoAngel

Thanks Svenena. Yes, we could have saved money by renting probably- but I suppose you live and learn. We're lucky that we both have jobs, though I can't imagine that having two houses is going to be cheap. If I hadn't accepted a job so far away then we'd be in a good position- but it was such a sought after training post! Maybe a friend or relative will need somewhere to stay at some point and it won't be just sat empty. (We're not selling it btw, we'll keep it for at least a year now till the fixed rate ends- what's the point in selling and owing more money that we'd get?!)

Svenena

What will you do if house prices drop further within the next year? I think I'd be inclined to sell it now, at a small loss, rather than risk greater ones in the future. Can you afford to cover the mortgage on the house and also pay rent in your new area? I don't know if there's a penalty for ending your mortgage early, but if you keep it for a year you will be paying another £6600, and could have even less to show for it? If there's a penalty, would this be less than the £6600?

I hope this doesn't sound too pessimistic, but I think you need to consider the possibility of further drops in house prices seriously. What was the difference between the outstanding mortgage and the valuation?

NoAngel

Svenena wrote: »

What will you do if house prices drop further within the next year? I think I'd be inclined to sell it now, at a small loss, rather than risk greater ones in the future. Can you afford to cover the mortgage on the house and also pay rent in your new area? I don't know if there's a penalty for ending your mortgage early, but if you keep it for a year you will be paying another £6600, and could have even less to show for it? If there's a penalty, would this be less than the £6600?

I hope this doesn't sound too pessimistic, but I think you need to consider the possibility of further drops in house prices seriously. What was the difference between the outstanding mortgage and the valuation?

Well- there is always the risk that it will drop further.


It's so hard to know what to do. We owe £97k and there are 2k early repayment charges. Sooo- the house is worth £95k and we'd be well out of pocket.


Been tempted to give up the job a few times, but then in the long term I'd be worse off. Think OH may end up staying here in the house whilst I move away for work. Not ideal. The other issue is that there is not much work down there for him- seems mad for him to therefore give up his job.

The whole thing is stressful, but I hope it ends up being worth it (i.e. I get a good job and move back home!).

Svenena

Stick with the job definitely - it's not so easy to get good jobs at the moment.

So if you sold for 95k you'd forfeit 2k in early repayment, and have to cover the 2k shortfall on the mortgage. This would still be less than the 6.6k you'd pay on the mortgage over the year.

Of course, what your OH decides to do will impact on this. If he moves with you, I personally would be inclined to cut my losses and sell the house. There would be no point in retaining it empty, as on top of being 2.6k worse off just on the above calculations, you'd still have to pay some council tax and bills, which would add to this cost.

If he decides to stay where is he, he needs somewhere to live, but probably not a whole house just for himself? If you're planning on moving back to the area where he works in the future, keeping the house is more viable, but it will still be expensive as between you you'll be paying a rent and a mortgage... from what you say, two rents would be cheaper, saving you further money in the long-run. If you sold the house now at a 4k loss, you could also mitigate some of the loss by being able to save more than you can now.

What are OH's thoughts on this? Obviously not a decision to be taken lightly. In the long run, I'm sure it'll all work out.

SimonMrGreenWard

How about:

You move for new job. Stay in staff accommodation.

BF stays where he is with good job, you both save like crazy so you can get rid of the house. Rent a room out in the property to get extra income.

Sell as soon as possibly can. Move to new area and both rent together. This gives time to get some cash in bank and for your OH to look for a suitable job.

madeupname1

Any chance of being able to port the mortgage to a new place?