Do we sell our flat and start renting?

Bianx

Hello, I am hoping someone can help! I had a rather sobering discussion with our financial advisor and would like assistance from anyone who can help.

I suppose it doesn't help that we live in the South East! We bought our 1 bed flat 5 years ago for 114k, with the understanding we would go up the ladder a couple of years later. Well, unfortunately this did not go to plan as the recession hit us. We did have our flat on the market 3 years ago but then had to take it off, as we ended up loosing 25k on our flat and going into negative equity.

We sat tight and waited, hoping things would change. It's slowly got better and we are now in positive equity, but not as much as we were before the recession. My partner and I weren't even thinking about looking to move again until next year, but unfortunately our area has dramatically decreased and we just want to get out.

I called our mortgage advisor and he basically said we don't have enough equity in our flat (we have about 15k and looking for a 200k property), and unlikely to for a long time (unless someone can lend us 12K)!! We can afford the monthly repayments but just don't have enough money for a deposit. We got a 95% deposit 5 years ago, but the banks are no longer offering this (apart from 1 but you have to be an exisiting customer). Our financial advisor also suggested that the market will get worse and that he believed we would not be able to afford to move for another 5 years.

I don't think I can handle another 6 months, yet another 5 years. We want to start trying for a baby and we can't do that where we currently live. I am seriously considering coming off the property ladder altogether and renting as working it out, it's only going to leave us £300 worse off a month from a small 1 bed flat in a deteriating area, to a 3 bed house/bungalow in a family area.

What do you think? Should I sit and hold tight to see what happens, or make the move we've been trying to do for 3 years now? I am not sure if I should stick it out, or just do what makes us happy!

Thanks in advance.

geoffky

i would rent but what happens if your deposit does not materialise....i think your fa was right about the market and that does not help you yet...try and sell but average selling times in a lot of areas are over 200days..see home.co.uk for your area...all you can do is save and save.....good luck.....

PasturesNew

Sell and rent a 1-bed place for now, won't be £300 more then.... then when you've got a baby, move to a 2-bed place (again cheaper)... and plough all the money you can into a deposit for the future.

It seems madness to me to rent something bigger than you need, at a time when you want to save all you can.