AT LAST!!.. Selling To Rent might be a great call right now

homelessskilledworker

If there are families who are living hand to mouth, if someone has lost their job and in these troubled times and are unable to get another, If debts are just building up from month to month, there are many reasons why in these difficult times Selling to Rent might be the right call.
The arguments that are going to follow this statement, will be something like "it's their home" or "they may never get back on the ladder ever again". Well sorry, times are tough, we now have a housing rental infrastructure that provides decent sized accomodation from £500 to £1000.
And who knows, once we are over the worse, and I think thats going to be a couple of years at least, there is always a chance(a good one) that you might be able to get back on the ladder.
So many people at the moments are living on a budget where they are working it to the nearest penny, crazy when many have £10,000's of equity in their home.

And a couple of points to be going on with, nobody has a right to own, those who have been priced out have been told that often enough.
And for those who will say that the housing market had ground to a halt, ALL housing will sell at the right price, and leave many with £10,000's of thousands of equity, even £100,000's in many cases, more than enough to get you through these troubled times.

Realmoney_2

Its a little late but maybe.

Its looking like a 50% real fall from top to bottom for house prices, and we are almost halfway through.

paulmapp8306

Renting is more expensive than supporting a mortgage, so generally if you HAVE a mortgage/house its generally not cost efficient to sell to rent.

HOWEVER, If your living hand to mouth as you state, or/and are not working or only in low paid work right now it does make sense. Why? Because the government help cover, or completely cover you rent !!!!

That helps you - but it doesnt help the government as benefit costs go up. That means more cuts and fewer jobs for you to get back into work.

From someone who has rented all his life (though not through choice - Im forces so smove and army quarters are cheap if crap), but who is looking to buy - IF you can afford to support a mortgage then buying is the way to go, no doubt. If you cant - then selling to rent isnt a problem I guess.

Of course you have to consider equity - because if you have more than £16k after the sale, you wont get rental help until your down to that level.

IveSeenTheLight

Seems like this is not STR to capatalise on perceived price reductions, but simply to benefit from previous HPI.

As always, it will be a risk whether the opportunity to get back on the "ladder" is there if the equity is utilised in these hard times.

the costs of selling, re-buying and rent / moving etc should also be considered.

dori2o

The way rents are rising IMO it's unecenomical to STR.

Our mortgage is £316 a month. To rent a similar property in our area is £585 pcm.

The level of our HH income would mean we get no help with rent costs.

As for a '50% real fall for house prices', HA HA!! Where's the proof?

ukcarper

Realmoney wrote: »

Its a little late but maybe.

Its looking like a 50% real fall from top to bottom for house prices, and we are almost halfway through.

Do real falls benefit str especially with high rents and low interest rates.

System

"Advice" like this is the exact reason the board is hidden from the normo's.

Pete111

Rents are going nuts - certainly in the SE. Anyone who has a reasonably 'normal' mortgage rate should be paying far less than the equivilent property.

Example. A flat I have just sold rented out at 1300 per month. The flat is worth 340k. Assuming you had 85% mortgage on it at 4% (and this could be far, far lower on a tracker!) you would pay just over £960p/m in interest.

My buyer (who rented) has stated that he is cutting his housing costs by over 40% - but to be fair he did have a 100k deposit.

ess0two

Joeskeppi wrote: »

"Advice" like this is the exact reason the board is hidden from the normo's.

Should carry a warning like the back of a fag packet also.

Road_Hog

The other things are, for most people paying a mortgage at the moment, know that their mortgage payments are going to be static for the next couple of years as interest rates are going nowhere.

Secondly, you have security with owning your own home, your landlord can decide to get out of the rental market at any time. Oh, and getting finance, cost of finance is cheaper as a homeowner.

michaels

Also if you have any equity in your house it is disregarded for benefits purposes, STR and any cash over 6k reduces benefits and anything over 16k stops the altogether. It is rumoured that with universal credit this will even apply to tax credits so even the govt is conspiring very heavily to make owning cheaper than renting.