£17,000 lost in 3 years. Advice please

jop8383

hi,
Just wanted some advice from peeps on here. 3 years ago I had saved up £10,000 and excitedly bought my own flat. Now 3 years down the line I was looking to move next year to somewhere bigger. Can afford a bigger mortgage and want to buy a bigger house to start a family in the next few years (got engaged in August). The lease is currently 76 years which a few friends have panicked me adn said was very short and would affect the price of the property considerably. I did enquire when I bought the flat 3 years ago the cost of extending the lease adn was informed by the freeholder about £18,000. (Since looking into this a bit more this seems quite high?).
Anyway I recently phoned an estate agent to ask some advice and was told in the current property climate the value of my flat is now about £92,000 (they had just sold one in same area as us). I am now completely stuck! They didnt give the impression that the lease made that much difference at 76 years but that the value had just dropped that much. I have put another 6000 into the property in the last 3 years so outstanding mortgage is about £93,000. So instead of having bout £16,000 for deposit on next house I'm down to nothing and after speaking to mortgage advisor I will need at least 15% deposit to get somewhere bigger which is going to be about £15,000-£20,000. Not possible!!
What would people do in this instance!?
At the mo I'm gutted I bought at all. Feel I have thrown £16,000 down the drain and have been paying interest so should really just have rented seeing as I'll now have to pay stamp duty when i do move (if ever now!!)

Thanks for your advice

Jo

sorry if this is badly written.

PasturesNew

Did the EA mention it's because of the lease? It sounds to me as if that's just how much your flat is worth because property values are less now than 3 years ago, so irrelevant to the lease length at all.

G_M

Remember the value of your flat may have dropped since you bought it, but equally the value of places you are looking to move to have also come down. So you don't really lose out.

Indeed, since you are hoping to move somewhere bigger, assuming both your current and future properties are, say 8% cheaper than 3 years ago, you're better off, since 8% of a bigger house represents a bigger gain than the 8% you've lost on the current place.

AbbieCadabra

MadnessOfHPC wrote: »

But he's not getting out at break even as he's lost his deposit. Best to stay put for the house price rises from this coming winter. If you are on the ladder it's insane to get off it.

:eek:

i just know i'm going to regret asking this, but here goes...

& just what makes you think Winter is going to equal a sudden rise in prices/activity? seriously, i'm genuinely interested in why you think this is true.

pararct

G_M wrote: »

Remember the value of your flat may have dropped since you bought it, but equally the value of places you are looking to move to have also come down. So you don't really lose out.

Indeed, since you are hoping to move somewhere bigger, assuming both your current and future properties are, say 8% cheaper than 3 years ago, you're better off, since 8% of a bigger house represents a bigger gain than the 8% you've lost on the current place.

How will the OP be better off? Their deposit has been wiped out, to sell now means break even more or less.

There is no deposit to take forward = no lender will entertain a mortgage unless you know of any offering 100% deals?

Touch choice I know OP but you have some hard choices ahead. Sit tight and risk real Negative equity possibly for years to come or sell now and start again.

There are no other answers I am afraid.... Don't listen to stupid comments like coming price rises over the winter. It is because of such vested interests in pushing property in the first place that you were lulled into the position you are now in.

themull1

i dont think its the lease in this case, there are loads of flats that sell with leases less than that, if you don't need to sell now, i would just hang on a few years until, hopefully the prices improve. I'm assuming that you're young, so there's no great rush? if its a two bedroomed flat you could still have a baby, does your fiance not have anything saved?

Lance

You are proposing to buy a more expensive home. If your flat rises 20% in the next year, getting your deposit back, the houses you want to move up to will have risen 20% and will cost you even more than your flat has made you than if you bought now. If prices drop 10% your 90,000 flat loses 9000 and a 150000 house loses 15000 so you are better off. That lease will get shorter if you wait.

rosyw

OK, put it into perspective a bit. Where you renting before? if so how much rent were you paying? your loss works out at approx. £472 per month over the threee year period, which hasn't ended up in the LL pocket! if you have the patience to sit tight for a while, things will "eventually" pick up. We bought our house just before the price crash in the 80's, spent nearly £20K on it in the first two years, and it was then valued at £10K less than we paid for it! £30K loss, so I know how you're feeling right now, but it WILL come right in the end, not soon, but eventually.

jop8383

G_M wrote: »

Remember the value of your flat may have dropped since you bought it, but equally the value of places you are looking to move to have also come down. So you don't really lose out.

Indeed, since you are hoping to move somewhere bigger, assuming both your current and future properties are, say 8% cheaper than 3 years ago, you're better off, since 8% of a bigger house represents a bigger gain than the 8% you've lost on the current place.

thats true if you have a deposit so can get a mortgage. without that, as is me, i will not be able to afford to get ANY other mortgage if i sell.

jop8383

pararct wrote: »

How will the OP be better off? Their deposit has been wiped out, to sell now means break even more or less.

There is no deposit to take forward = no lender will entertain a mortgage unless you know of any offering 100% deals?

Touch choice I know OP but you have some hard choices ahead. Sit tight and risk real Negative equity possibly for years to come or sell now and start again.

There are no other answers I am afraid.... Don't listen to stupid comments like coming price rises over the winter. It is because of such vested interests in pushing property in the first place that you were lulled into the position you are now in.

thanks. but if i sell now thats starting again, as in before I had ANY deposit and that was a long time ago! ive been saving for years to get the £10,000 and now although im earning more it would still take ages if i had to pay rent as well.
and unfortunately no other half has no deposit or savings.

jop8383

Lance wrote: »

You are proposing to buy a more expensive home. If your flat rises 20% in the next year, getting your deposit back, the houses you want to move up to will have risen 20% and will cost you even more than your flat has made you than if you bought now. If prices drop 10% your 90,000 flat loses 9000 and a 150000 house loses 15000 so you are better off. That lease will get shorter if you wait.

its not the prices of the houses I want to buy that are worrying. I can afford to pay more on the mortage now per month but obviously need the capital to start with which is where I now have seriously lost out.