Moving house with no savings

JQ.

£5k is likely to be eaten up in your total moving costs, so the reality is that you currently have zero deposit - and that assumes your estimate of the current value of is correct, which for most people it's not. I would suggest you need to start saving like mad if you want to move.

DRP

Fire_Fox wrote: »

You are saying rent is expensive as a general statement and you are not the OP. Were you taking all those costs into consideration? Plenty of flats and houses lost that £100-£300 a month in equity alone over the last couple of years. And if you go back to 2008 interest rates were massively higher which translated to hundreds a month for many.

Correct, I am not the OP and no, I have not made a general statement. I am giving my opinion based on the current situation as I have experienced it where I live. House prices haven't fallen much where I live (gone up if anything in the last 4 years or so).

To reiterate, my suggestion to the OP was to take advantage of their increased income and the lower interest rates and save until he can really afford to move. Therefore, a large part of the costs you mentioned (estate agents fees, legal fees, stamp duty), would become more affordable, the OP would increase their equity and possibly benefits from lower mortgage rates (LTV).

JimmyTheWig

Cheesy_Fingers wrote: »

We are concerned that with no major savings and approximately £5k equity in our property we will be unable to move.....can anyone advise on what our options (if any) are???

If you can buy somewhere for £40,000 then it's potentially achievable.
At that end of the market you could probably get away with £3k in fees. Which would leave you with £2k deposit.
You may be able to get a 95% mortgage, so could borrow £38k on a £40k property.

Assuming that you can't get what you want for that price, I'd say your choices are save up (from your increased income should be possible), sell and rent or let and rent.
Personally I would only let and rent if your current place is unworkable as it will cost you a lot and I would only sell and rent if the numbers worked (which in all the places I've looked, they wouldn't).

For me, it would be a case of saving until there was enough deposit to buy what I wanted.

cottonhead

Hi Cheesy Fingers - did I post under a different name in my sleep ?! We are in exactly the same situation ( from what you have said anyway) . We have been here 8 years and want to move and have little equity. Around £11,000 if we sell for the average valuation or minus £9,000 if we sell for the lowest! We also have a better income now but no savings.
Having thought of all the options we have decided to stay where we are and overpay the mortgage for 18 months in a bid to increase equity. If after 18 m months its still not enough we will sell up anyway and move into rented and continue saving until we do have enough. We looked as shared ownership which you only need a small deposit for and there are 5% mortgages but you still need money for the solicitors etc dont you. Its a difficult one but I would say it depends on your reasons for wanting to move. Could you do some improvements on your current home or do you need a bigger house etc. That might influence your choice. Good luck to you !

JimmyTheWig

cottonhead wrote: »

have little equity. Around £11,000 if we sell for the average valuation or minus £9,000 if we sell for the lowest!

I hate to say it, but you can probably knock 5-10% off if they are estate agent valuations.

cottonhead

Yes we have tried to prepare ourselves for low offers. 3 eatste agents all said the same price and one suggested £20,000 less which I thought weird. I am always looking on rightmove and can see that similar properties are selling for somewhere between the highest and lowest valuations so I totally see your point. Its so annoying!

JimmyTheWig

cottonhead wrote: »

I am always looking on rightmove and can see that similar properties are selling for somewhere between the highest and lowest valuations so I totally see your point.

Sorry, I think you haven't quite got my point, though I think you understand more than many people - looking at what others are on for on Rightmove is a great starting point.
My point is that the price you see on Rightmove, and the valuation that the Estate Agents give you, is the asking price.
Normally a buyer will make an offer below the asking price.

Unless you are actually looking at the price property has sold for (this information is readily available online, but generally not with the sort of detail about a place that they hold on rightmove) the price that they will sell for will generally be less than the price they are advertised at.

kingstreet

See if your current mortgage lender has negative equity products for its existing customers moving home. This would enable you to look at buying without a deposit.

You'll still need to cover the buying fees.

mrginge

I find it interesting that people say their income has increased but yet they have no savings. Granted its nice to have the extra spending power, but if you're planning on upsizing then just overpay the existing mortgage. You can then see how much extra you could afford without impacting on your current lifestyle.

Catherine_Johnson_2

Cheesy_Fingers wrote: »

Having lived in our house now for 8 years we are looking to move on. Unfortunately, with the downturn in the property market we are left with very little equity in our property but are in a much better financial position (income wise).

We are concerned that with no major savings and approximately £5k equity in our property we will be unable to move.....can anyone advise on what our options (if any) are???

If you can't save any money at the moment, how do you propose to pay a, presumably, larger mortgage on a new property?

If you're financial position has increased as much as you say you should be saving money each month. Where does it go?