Quick advise please

Redknapp

Right close to selling my 1st house (should complete this week), Its a 2 bed end of terrace in Ruislip for £260k. Rental market is only around £800/£850 round there (wont even cover my mortgage). Bought the house badly run down down and its taken a while to sort it out.

Now I am getting second thoughts about selling it due to the fact I will have to get straight back on the housing ladder or be left behind.

What would you do?

lynzpower

Depends, how big is your family.

We are selling, we only need a one bed flat really, so we will save a lot by renting. thats east london ( bow/bethnal green/stratford/ leyton)

Redknapp

Its just me. Intention when I bought it was to renovate it then sell. But just worried about getting back on the ladder basically.

Mrs_pbradley936

How much of a gain will you have? Will that be enough to put down a decent deposit on a one bed flat?

lynzpower

When you are thinking of the sums you want to estimate

a) how much if any gain
b) how much that gain will make in monthly interest
c) any other savings such as not having to pay life cover, buildings insurance and so forth ( for me this works out at just under 100 pcm)
d) the difference between the mortgage costs and renting, and how much extra interest this will make month on month.

I bet it will be enough for a decent deposit, if not immiediaely, certainly in a year if you can hang on that long.

Besides, the property market might take a crash and voila, you are chain free with a deposit.

Redknapp

pbradley936: I've got somewhere else to stay thats not a problem.

Its not really about the money at present. I just don't want to be left behind if you know what I mean. The way I see it is theres no point having all my money in the bank earning such a small amount of interest, the way house prices rise the moneys better off being in one.

The only other thing i've been thinking is going to auctions to buy another house and repeat what i've done with this one.

Thanks for your help so far.

lynzpower

Do you think its only a small amount of interest?


I will be making more out of the interest FROM the bank than I am currently paying TO the bank month on month in mortgage interest.

goldbyron

Have you actually exchanged on the house?

If you have - I think you can't pull out without incurring financial loss/ being sued.

Mrs_pbradley936

Yes I understand your concern and it is a valid one. If you are out of the housing scene for too long you fear that prices might rise fast and you will not be in a good position. Which is why I mentioned a one bed flat. You have to live somewhere, and even if you have a place to stay you could rent the flat and provided it is your only property move in for a while before you sell it so it is your main residence. I had a quick look on rightmove.com and for Ruislip and a mile around there are over 100 flats between 140k and 200k. The rentals for the same thing are around £700 a month. Where Lynz lives the figures are very different – not as many places in that price range and rents are higher. Another thing to consider is if you could trust yourself not to dip into any money for a holiday, new car or other treat you think you might die without. We can all say what we think but ultimately it is your decision - I am just pleased that you are considering all your options.

lynzpower

I dunno we are finding quite a bit around the 140-160 per week rental around here - and thats before negotiation

Quite a big saving Id say :beer:

Redknapp

lynzpower: not sure what you mean, clue less when it comes to all this im afraid

I'd say it would cost me £100/£150 on top of any rent earnt to cover my mortgage. Though my mortgage is very high due to being self cert + no redemption.

goldbyron: Exchange looks like it will be this week.

pbradley936: Thanks for looking much appreciated.

Right brief story. I'm 27 only bought the house to make some money tbh. Live with my mum at present (yes I know) but spend most of the time round my girlfriends. I work for myself (done most of the work on my house). Don't really want to live on my own or with the girlfriend at present (complicates things). I like you idea about getting a flat to rent that makes sense and was something I had not considering. The only other thing that gives me doubt about selling my house is it has enough room at the side for an extension (hence the £260k price tag) so I could always come back to it later and build on it when I am more experienced.

Just want to secure myself for the future and put my money to good use whether its a house or by another means. Maybe I should look into how much I could earn out of high interest bank accounts? I am very good with my money though some people even call me tight