Should we get rid of the property or keep it?

bettersoon

We bought a 2 bedroom leashold house in december 2006 with interest only mortgage, hoping to make a profit and move on. We tried selling during the beginning of the crash but couldnt get rid of it! We did get an offer of 12k less than what we'd paid for! We have tennants in and because of the low interest rates we are able to cover the mortgage and make about £500 per month from it. So apart from worrying about the lease getting shorter we were ok until hearing about the rate going up with halifax! We're not with halifax but it just reminds me of how unstable our situaiton is whist owning this house :0(

GMS

How long is remaining on the lease? I assume plenty seeing as how you got a mortgage in 2006.

Do you have consent to let from your lender?

What is your residential status now?

myhouse_2

You don't say how much the mortgage is, but if you're making £500 per month over and above the mortgage then that sounds like a pretty good investment. However there is more to being a landlord than making money. Are you looking after the property properly (consent to let from lender, performing electric/gas checks, submitting income tax statement to HMRC, paying insurance). If so great, if not, that might be a sign that you are not properly committed to being a landlord/lady and so should sell.
IRs will remain low for some time by most predictions - that doesn't mean that they will not change somewhat. If a small rise is enough to push you over the edge, then sell pronto.

bettersoon

It was 103 years when we bought it and yes we have.

bettersoon

sorry, yes we are insured and all and we are renting at the moment.

bettersoon

Our mortgage payments are just over £250 at the moment.

HAMISH_MCTAVISH

We'd need to know:

- How much was property bought for, and how big was deposit?

- Roughly what area?

- What is current mortgage deal, and who with?

bettersoon

Bought for 176k and only 5% deposit, our rate was fixed for 2 years, we were paying about £750 per month interest only, then its either 2.00 or 2.5% above the BoE rate which is why its so low at the moment. Will need to check papers for exact amounts but this is roughly what I can remember. The house is in London se25 and lender Platform.

bettersoon

We are living in rented flat at the moment, paying 1000 p/m

getmore4less

Why are you not living in it?

Whats the rent for?

whats the interets rate and payment, you have said both £250(1.79%) and £750 (5.4%) on motgage of £167200.

What are you clearing after all costs?

bettersoon

Sorry didnt realise I needed to be so specific.

My husband deals with all the money stuff so I can't be 100% accurate with the figures.

At moment, his wage is 40k + about £500 from the rent we get, then less tax.

Our rent is 1000 p/m. We moved because we had problems in our relationship during 2007, I moved out and he was having problems financially so he let one of the rooms out. We reconciled after 6 months and of course the house was part occupied so we moved in with family. Also We didnt like the area. Now with 2 kids at primary school its really not where we want them to grow up so would rather pay the rent and live in a better area with better schools. It werent meant to be a long term stay anyway. We planned on moving once our 2 years fixed rate was up.

I was certain it was 5% deposit but I remember our mortgage being £173200? We borrowed about 10k from family so maybe we used the rest for fees and other stuff. our interest only payments were about £750 p/m fixed for 2 years from end of 2006. Then it went to variable with base rate plus rate of BoE, so we were paying something like £1000 for a few months until rates went down. Sorry, all the paper work is put away and I hope you are able to calculate according to this! Just checked with OH , we are actaully paying £280 at the moment and renting the house out for £750.

Hope this helps?