Can't Sell. Let it and buy another?

simoncornwall

Hello,

Sorry if this has been covered elsewhere but couldn't find the answer or advice on searches.

We currently have our house on the market, its been on for over 12 months and have had very little interest. We don't think its down to the valuation or problems with the Estate Agents as it appears to be the same with other houses in the area of similar value and others have changed prices and Agents and still haven't sold (many of them have been on for longer than us) we just feel its down to the current climate and the type of people that may buy our house and the fact there are new builds in the area which are competition.

We have seen a house that we very much like and need to sell our house before we can make a move - obviously.

Our house is valued at £179,950 with an outstanding mortgage of about £80,000 (17 years left!) the house we are looking at is £240,000 and our current mortgage have advised us that based on our current income and circumstances we would be able to buy the new house and they would offer a mortgage to do so meaning a mortgage of around £140,000.

As we can't sell and keen to get the new property we were wondering whether renting out our house (as rental opportunities are good in our area) and then buying the new house. But we are unsure of how it works? Would we be able to use the money we have in our house along with the income from the rental to assist us in getting a mortgage to buy the other house? We certainly wouldn't be offered a new mortgage for £240,000.

Would we change the mortgage on our current house to a buy to let? Would we be able to get a Interest Only mortgage on the new property with the hope that in 20 Years time the value of one house would sell and ay for both?

Any one that has done this or has any advice I would be glad to hear your advice.

Thanks to everyone in advance!

Simon

Werdnal

This question is asked here a lot - a search will bring up dozens of similar threads.

You can apply for consent to let on your mortgage, but lenders can refuse. If they agree, they up the payments, can add admin fees and may put a limit on how long you can let for, who you can let to and what rent you can charge.

You can convert to a specific BTL, but they will insist on 25% minimum deposit.

Then you need to understand all the other costs and legalities. You need an EPC (probably already have one if its on the market), and annual gas safety certificate if you have gas supply. Then change your insurance to a LL policy.

Agent fees (if you use one) can be 10%+ per month.

You also need a good contingency of cash to cover voids and bad payers - it can take several months and a court case to get non-paying tenants out. No doubt whilst all this is going on, you will have the mortgage on the letting property and your own home to cover - can you afford this. A boiler repair could take 2 months+ of your rent in one go - again, cover the mortgage OK?

You also need to declare income for tax and it can affect any benefits you already claim (WFTC etc).

Are you prepared for all the hassle, costs and worry being a landlord can bring.

If not, reduce your price, sell up and move on with your life without complications!

Fire_Fox

Did you find the advanced search function? http://forums.moneysavingexpert.com/search.php?f=16
Do make use of the threads/ posts and 'search titles only'/ 'search entire posts' selectors. Or just read the board, loads of the threads on the first few pages are asking the same thing.

If your house is not selling, then it is overpriced for what is on offer in the current market: anything will sell at the right price. Have you checked SOLD prices for the street and area instead of comparing unrealistic FOR SALE prices? Have you decluttered, spring cleaned, finished all those niggly DIY tasks, neutralised any really bright or dark colours? If you post your Rightmove link we can give constructive criticism on the presentation, photos and agent's listing.

Be aware that landlords are subject to a sea of legislation, not understanding the law is no excuse for breaching it so expect to spend days researching or risk paying the price in court. You are also at risk of tenants who move in and do not pay - it can take months to evict them, meanwhile you pay the mortgage. It's tough to sell a property with a sitting tenant, you generally need to have an empty house to sell it and notice is two months, so you will likely have a gap at the end with no rent. If your sale falls through at the last minute, again you will be stuck with the mortgage.

Werdnal

OP, some people who are having trouble selling, put a link to their rightmove entry on here for people to "critique" and advise on tips to improve the presentation and selling potential. Not saying you have to do this, but if you are happy to, then some "idependent" views might offer you some pointers.

You won't be able to post links as a newbie, but you can copy the URL into a post if you wish, and await some advice or criticism if you are strong enough!!!!

[Deleted User]

Personally I would do what I could to sell first and sit tight.

I know quite a few people in your situation who have gone done the rental route which has been a total nightmare and all are now selling their props at any price to get rid of the stress.

motherofstudents

Could you remortgage your existing house to raise the money you need ? That way you would not need a btl mortgage. The simplest and most worry free way to proceed would be to sell your house, lower the price and then you can forget it.

If this proves too difficult, I think you need to really investigate what you need to do to let it out. There are some horror stories on here and I would not try to minimise these at all, but most tenants do pay the rent and look after the house. If you can vet your tenants properly, it might be a way for you to move, but be realistic and don't rely on the rent too much.

Werdnal

motherofstudents wrote: »

Could you remortgage your existing house to raise the money you need ? That way you would not need a btl mortgage.

They are looking to let the original house, so any re-mortgage would need to be on BTL or CTL terms!

Mickygg

As Firefox says everything sells at a price. If you want to sell, go under competitors. I needed to sell several years ago as my residents association were doubling their already high fees. I dropped mine under all other local competition, and I sold within a week. It hurts to drop the price, but needs must when you really want and need to sell.

myhouse_2

Good responses already, but just to emphasise the risk of having a property which you can't let out, where tenants don't pay or where there are long void periods between tenancies.
If the market looked like improving, you might get away with renting out. It doesn't look like improving though and you might find yourself selling for even less in the future.
Drop your price and sell.