Selling Up, wise move?

Alan_M_2

cwcw wrote:

Really? I thought it would be more than that. What is your source?

Lets hope we never have to start building cities in the remaining countryside areas.

I was slightly out, it's 8%.

Take a look at the following very interesting document that dispels a lot of the myths surrounding housing.

http://www.policyexchange.org.uk/images/libimages/143.pdf

sm9ai

I would do it personally.

It is a risk, but no more than holding onto the property.

40k would pay £166.66 @ 5% or part of your rent a month leaving you with £233.33 to find or £116 each. Which is extremely good. As rates increase which they look set to do this year then your rent would in theory decrease.

As apposed to if you stay mortgaged your payments will increase.

For Short term money sell up and rent - long term nobody really knows.

sm9ai

suitusir wrote:

The way I look at it, we live on an island, its getting no bigger, theres not enough room to build more house, the population goes up, which means more people looking for houses which means higher prices.

There is only limited land mass where ever you live. So saying we are an Island really has absolutely nothing to do with it.

As for ever increasing prices, they need to be paid for with something, but what?

Gorgeous_George

Mainly because small flats are likely to be hardest hit by a fall in prices and the special deal from GF's dad, I would rent and take the risk that prices continue to rise.

I'd invest in mini cash ISAs using both yours and your gf's allowances this year and next with the remainder being invested in other safe houses.



GG

scrummy_mummy_2

If any one is interested I have a slightly 'off the wall' opinion on the future of house prices and I think they will continue to rise....why? Well, everyone was hit very hard in the late 80's and early 90's with the effects of the last boom and bust cycle.
Humans are dim (generally) and look to the past to try to predict the future, which doesn't necessarily follow....if something is new, how can you predict it as it hasn't happened yet?....the mortgage companies and lenders go hit hard by defaults/bad debts etc in the early 90's and don't make money from this sort of outcome, thus they are doing everything they can to expand their portfolio of products, and prevent it from recurring.
It is in the mortgage company's interests to see prices rise, because they will lend more value and thus make more money.
We have seen the BTL market emerge from nowhere in the last 10 years because they spotted it as a segment to be developed.
We are seeing lifetime mortgages emerging and mortgages that can be passed along the generations together with interest only, repayment and all sorts of derivatives.
I believe house prices will continue to rise as the lenders expand their product offereings to enable the population to get their hands on ever increasing sums of money over longer periods of time...as long as it is do-able, the borrower doesn't really seem to care how much is paid back it seems such a long way off!!
What it means is that certaiin sectors of the market (such as BTL) will peak, because there is no reasonable yield to be had anymore in certain parts of the country (I'm in Berks and would expect to get 4% if lucky) but they can afford to cannibalise some of this market as the demand for residential property will probably rise.
My prediction......equity share investment vehicles will be the next big thing where a potential LL can buy a share of a property and rent it back to their 'tenant' who also owns a percentage of the property...sort of like the way housing associations work.

Summary: Don't sell your property once you are on the ladder unless you absolutely have to....options......always keep them open.

Alan_M_2

Interesting theory, but I could see it only being able to exist in a period of low interest rates and low- medium inflation, as soon as either of these take off (which is guaranteed in the term of a lifetime mortgage) then it becomes unmanageable.

You've effectively provided a plan for delaying the inevitable a little longer.

Although I agree with the principal that as long as money is available at the right price there will be no correction. It's how far the lenders are willing to push the envelope that will determine when this comes to an end.

jetsetwilly_2

Thanks for the advice guys and girls.

I am in a position where I can easily afford the rent on the bigger house.

I have pretty much decided to move into the rented place. its all about what to do with the flat or the money made from the sale.

I live in Gloucester. 1 bed flats tend to rent for about £375 pcm. After the agent fee is paid, that leaves about £300 (just about covering the mortgage).

If prices were to rise sharply, of course it is worth keeping hold. but I think stagnation, or a small rise is most likey, so a high interest account would do the same job as renting out?

The idea in the next 3 yrs is to move abroad, so I am not concerned with a huge hike in Uk prices leaving me out of contention when coming to buy a bigger place in a few years