buy or sit tight?

paul121_2

Hi, looking for some guidance on my position.

Have a house without mortgage standing me at £290k (bought last September 2010 - was a new build - last of small development of 9 house originally priced at £399k) - we are not happy with the move and want to return to our home town. Had offer of £275k on this house.

Found superb deal on detached property back in our home town - £197k, but needs full works. Have offer from First Direct on 85% LTV deal - 3.49% tracker with £167k mortgage. I will clearly have to put £30k down - which will leave me with another £30k to renovate (prob half what is needed).

If I sell and make a quick loss on house 1, I can do full renovation as no issue with money. I will have to rent a property for at least 6 months as house 2 is uninhabitable.

Should I stick or twist on house 1? Should I risk market improving and recovering my £290k - also taking into account the need for rental if I sell - Just cannot make up my mind.

Thanks in anticipation

Thrugelmir

When you say offer from FD is that decision in principle or a full mortgage offer? As you say the property is uninhabitable.

sherrybaby

To me it sounds like a no brainer - you're not happy where you currently live and you've found the ideal house where you want to live at a great price. Ok, you'll make a £15k loss by selling for £275k but are you not making up that loss by buying the renovation house for a good price??

Life's too short to live somewhere you're not happy. If i was you I'd sell now and get on with your life instead of waiting for the 'what ifs?' in the housing market.

Hope that helps!

anh1904

First and foremost, you should make sure that whatever you do is your decision, based on your own circumstances, wants and needs.

You should do a full projected cashflow, and assume the renovation will take twice as long as you ever thought, and cost approximately twice as much (normal rules of house renovation as you can guarantee you will "find" things along the way)

Thereafter, you need to determine the long term benefits.

I bought my house just over 5 years ago, It has depreciated by over £30,000 in that time, and I have paid over £40,000 in interest. When I went to look on www.hindsight.com, it told me I should have rented 5 years ago and not bought the house, alas, the website wasn't available back then.

You pays your money and takes your choice, stress YOUR choice.

paul121_2

thanks for that.

It is currently uninhabitable as a very elderley chap lived there. It does have 'basic' kitchen and bathroom facilities so should qualify for a mortgage - but as you point out, the mortgage is only AIP not a written offer. I am optimistic as the house was subject to another offer a couple of months ago. The buyer applied for the mortgage, via survey which was satisfactory, but later pulled out due to renovation costs. Its a steal at £197k - just hope FD appointed surveyor thinks so!!

Conrad

If you wait for yours to rise 10%, the one you buy will also have risen!

Too personal a question to warrant a reply - it's like me asking you do we go for a tropical holiday next year or stick with Europe - the decision is bound up with a thousand deep rooted personal motivators and imperatives.