Is it a gamble to sell my house and not buy another??

Fran24

Hi All,

First post here, i am thinking of selling my house and moving in with one of my friends for a while and investing the money i have in the house.

Would this be a stupid thing to do considering what the housing market has been like for the past few years. I am going to invest the money and save money each month and i think i could save at £10,000 per year including the interest on the savings. I know the housing market has slowed down a bit but would this cover the predicted increase in the market this year as i don't want to end up in a years time in a worse house!!

I know nobody has a crystal ball to predict what will happen but thought I would ask your expert advice.

Thanks

Fran

Alan_M_2

Yes it's a gamble, I'm not quite sure what kind of answer you're expecting.

Put it this way, if you're selling expecting a correction - for prices to drop and then get into a nicer house for less money there are many things to consider.

1/ It may or may not happen.
2/ If it does happen the prices don't drop in a month, or 6 months, or even a year - the last correction in the early 90's took the best part of 5 years to sort itself out. - Don't think it's like a stock market crash.
3/ You have to live somewhere, so unless you're moving back with family or being seconded by an employer you'll have rental outgoings which need to be accounted for in your calculations.

jyonda

Buying and selling costs money. Agents fees, lawyers fees, tax to name a few which would probably eat up most if not all of your 10k. So no probably not worth doing.
If however you feel the market has absolutely peaked and we are mere months away from a total collapse in the housing market then yes sell now. Even if that were the case it would take at least a few years till the bottom of the trough is reached so stepping outside of homeownership would not realistically be a short term option.

Hope this helps.

Doozergirl

If you treat property as a commodity then of course, yes, it's a gamble.

Most people have an opinion, some people very strong ones. No-one will be able to give you the right answer.

You're by yourself on this one, the same as all of us

JennyW_2

I personally wouldn't jump off the ladder! Your property is an investment so why would you want to sell up? I couldn't face the prospect of starting all over again, unless of course you move to some remote part of the island and get a bit more for your money.

Some friends of ours did this and went into rented however they are slowly eating into the money they put away.

franklee

I did it, my take,

If yours is a well loved home that you want to live in for many years to come then don't sell.

If yours is a home that you'd like to move on from soon in the next few years anyway and you can live much more cheaply by moving in with your friend then sure, why not at least look at the figures in detail. Remember if you want to sell up soon anyway then you will still incur all the selling and buying costs. All you are doing is taking a nice long break between the sale and next purchase.

But be realistic with the figures. Include all costs including rent and extra removal and/or storage fees. Include all savings including interest on the banked profits from the sale, maintenance that you won't have to pay for and savings made by sharing the bills.

Remember it will take six years or so for prices to go from peak to trough and you will not know till afterwards when that peak actually was. You do not have to buy at the very bottom, you could buy on the way down or on the way up, the bottom will be there for while but again it's only with hindsight people will know exactly where it was. You do not know how large any fall will be.

It could work quite well but only if you are a good money saver and won't be tempted to blow the sale profits. But of course it is a risk. But then holding a property you want to move on from soon is a risk. Trading up at the peak, thus taking on more debt, is a risk. It is all a risk!

RHemmings

Fran24 wrote:

Hi All,

First post here, i am thinking of selling my house and moving in with one of my friends for a while and investing the money i have in the house.

Would this be a stupid thing to do considering what the housing market has been like for the past few years. I am going to invest the money and save money each month and i think i could save at £10,000 per year including the interest on the savings. I know the housing market has slowed down a bit but would this cover the predicted increase in the market this year as i don't want to end up in a years time in a worse house!!

I know nobody has a crystal ball to predict what will happen but thought I would ask your expert advice.

I think it's a reasonable gamble. But it is a gamble. And are you really going to live your life according to the opinions of anonymous people on websites who you wouldn't even know if they weren't anonymous?

To know the answer to your question, you'd have to run the numbers in more detail. How much is this "predicted increase", and how much do houses cost of the type and location you're in.

BTman

JennyW wrote:

I personally wouldn't jump off the ladder! Your property is an investment so why would you want to sell up?

If your house is a home and nothing else then I would sit tight and not even look at property prices..

To call a house an investment mean's you are looking to make a profit.
Investors I know get out of investment's when they feel they have made a good profit and that the price has reached its peak. They then buy back in after everyone who held onto their investment watched it drop in price.
What makes a good trader is that they do not get emotionally tied to their investments.