Rent or Sell?!

moneysavingpom

Your opinions and advice gratefully received as we just dont know what to do for the best in the current market, sell or rent out our property (we are emigrating so we're not buying again in the UK).

• We bought our house for £230K (spent £30K refurbing)
• We have a lifetime interest only traker mortgage (1.49% above the base rate) of £223K. Meaning we currently pay £390pm.
• The house is currently on the market to buy for an asking price of £290K and rental £970pm.

The conundrum.... we have just had an offer to buy the house for £270K. No rental offer yet but rental market is very very bouyant here. Do we sell for £20K under the asking price but for a little bit of profit or hold out for a tennant and make £500approx each month profit (after paying mortgage, agent fees, insurance etc).

Sounds like a no brainer (rent!!!) but if the interest rates go up significantly we stand to lose via renting and may not be able to sell.

Is a bird in the hand philosphy the way forward or is it a time to be brave!

What would you do????

Thanks for reading.

brit1234

Sell, thats a good offer in this market. About 6% under asking and other sellers would bite your arm off to get the same.

As for interest rates, they may stay low for a while but if the economic problems continue internationally the cost of borrowing will shoot up especially when the focus moves to R. Ireland.

In other words BOE rates will be low but you bank borrowing rate will shoot up making higher mortgage costs. On top of that house prices will continue to fall so you will likely get less than £270k when you next get an offer.

Sell its a non brainer, move on with you life.

Limana68

I would definitely sell, emigrate with a few quid in the bank, and have no worries to start a new life!

Good luck

moneysavingpom

Thanks Brit1234 and Limana68 for your replies... a resounding 'sell' so far!

Starting a new life with no mortgage tie in the Uk is tempting....

Werdnal

Firstly, does your mortgage agree to letting? If you haven't already checked, find out as they may put higher payments or charge a fee for change of terms.

You will then need to arrange:

Landlord insurance
Annual gas safety certificate (if gas appliances)
Someone to act as a UK agent/contact for repairs/tenant problems
Someone (often the tenant) to collect your HMRC contribution from your rental income as you will be living outside the UK
To take and protect a deposit from the tenant
Someone to organise notice to tenant in the event of need to evict through problems, non payment of rent etc.

What happens to the mortgage if tenant defaults on rent? How would you deal with applying to court for eviction if you are no longer living in the UK?

If you are making a new start abroad, then make a completely new start and don't hassle yourself with the problems that becoming a LL can bring.

jimjames

brit1234 wrote: »

In other words BOE rates will be low but you bank borrowing rate will shoot up making higher mortgage costs. On top of that house prices will continue to fall so you will likely get less than £270k when you next get an offer.

If the BOE rate is low then the mortgage remains low - the OP said they are on a tracker so other rates would have no effect at all.

Personally I would consider renting. It will be more difficult if you are outside the UK but if you don't need the money now bear in mind you will be getting £6000 pa towards your mortgage (minus any costs) plus the amount you are already paying down with your mortgage payments.

In a few years when the market picks up you can then sell and hopefully get a better price.

It all hinges on whether you need the money now or not and can handle managing a property from a distance. Also bear in mind that regardless of the asking price you have still made a profit based on that offer.

devotee

moneysavingpom wrote: »

Your opinions and advice gratefully received as we just dont know what to do for the best in the current market, sell or rent out our property (we are emigrating so we're not buying again in the UK).

• We bought our house for £230K (spent £30K refurbing)
• We have a lifetime interest only traker mortgage (1.49% above the base rate) of £223K. Meaning we currently pay £390pm.
• The house is currently on the market to buy for an asking price of £290K and rental £970pm.

The conundrum.... we have just had an offer to buy the house for £270K. No rental offer yet but rental market is very very bouyant here. Do we sell for £20K under the asking price but for a little bit of profit or hold out for a tennant and make £500approx each month profit (after paying mortgage, agent fees, insurance etc).

Sounds like a no brainer (rent!!!) but if the interest rates go up significantly we stand to lose via renting and may not be able to sell.

Is a bird in the hand philosphy the way forward or is it a time to be brave!

What would you do????

Thanks for reading.

Is the buyer willing to increase the offer?

moneysavingpom

devotee wrote: »

Is the buyer willing to increase the offer?

I'm thinking not. They have had a low offer on their house. They really like the house and have been waiting for a buyer so they can put an offer in for a couple of months.

They also want to "officially" pay £250K and then pay £20K on completion to avoid stamp duty... is this normal I wonder, or asking for trouble.

moneysavingpom

Werdnal wrote: »

Firstly, does your mortgage agree to letting? If you haven't already checked, find out as they may put higher payments or charge a fee for change of terms.

You will then need to arrange:

Landlord insurance
Annual gas safety certificate (if gas appliances)
Someone to act as a UK agent/contact for repairs/tenant problems
Someone (often the tenant) to collect your HMRC contribution from your rental income as you will be living outside the UK
To take and protect a deposit from the tenant
Someone to organise notice to tenant in the event of need to evict through problems, non payment of rent etc.

What happens to the mortgage if tenant defaults on rent? How would you deal with applying to court for eviction if you are no longer living in the UK?

If you are making a new start abroad, then make a completely new start and don't hassle yourself with the problems that becoming a LL can bring.

Thanks for the reply.

It does sound like a minefield of hassle, however, to make is easier we were going to go for full management (8% fee) and landlords/rental income insurance.... so it might actually work out to be less than £500 profit each month.

Thrugelmir

moneysavingpom wrote: »

we are emigrating so we're not buying again in the UK.

Where are you emigrating too?

moneysavingpom

Thrugelmir wrote: »

Where are you emigrating too?

Australia.... A long way away from any rental property!