thinking of selling up

dsp_3

and getting my £40000 equity in to savings and renting for a while, has anyone tried this?

the idea is that in maybe a year or so house prices may be less and i won't have
the issues of being in an uncertain chain at my end.

does any of this sound like madness to anybody?

i don't think my house could gain any more equity at this stage after 5 years of owning. also the mortgage is about to finish in june and is going to go up to almost the same as renting a slightly bigger place in my area. any thoughts warnings would be great

cheers

leo

Zammo

While prices are ridiculously high at the moment and due for a fall, I really don't think that it's a good idea to gamble with your home. If they keep on rising at the same rate as they have done for the last 7 years or so you could find yourself priced out and unable to buy your own home back again. 40k of equity should provide you with a decent cushion against negative equity if noting else.

TTMCMschine

Yes I did it 3 years ago - got the timing a bit wrong. I would have kicked myself except that we rent a much bigger house than our old one, it's in a nicer area & is only £400 pm.

In addition, having real money & no debts, we've seen our investments & savings soar to about £160K. I can't tell you how comforting it is to have a good amount of cash, no debts, & the freedom to move easily & quickly if you want to.

I think prices have to come down, debt based econmies always pop in the end, ours is no different no matter how much people might want it to be.

lynzpower

Ive just done it, more to minimise liability than anything. Life changes, I found myself quite ill, and the mortgage looked shaky. Plus it was increasing mortgage wise month on month once my fixed rate came to an end ( I was on the market before this tho )

We only did this a few months ago, we moved in January. Im under 30, but im out of debt, got a good amount now in savings AND saving 600-700pcm, plus the interest on the money in savings itself.

When people say to me "you couldnt buy back the falt if you wanted to now" I say, GOOD, WHY WOULD I WANT TO! it was a crap new build in an average place and it had the potential to cost me an absolute fortune. why would I want to pay more for it now!!!

I live in a bigger place in a WAAAAY nicer area than before and its way cheaer. theres a bit of insecurity I guess, in if your landlord wants you to move ( more important for those with kids than us tho, its fair to say) but that also means you are more fluid and have more choices. Its much easier to move areas ( eg for better schools or transport) when you are renting than when you own

lynz

Melissa177

Are you planning to buy again, Lynzpower? What happens when you get older (ie, towards retirement age, which is a way off yet, I expect).

Generali

"Markets can stay irrational longer than you can stay solvent" - JM Keynes
Lots of people are going to think you're an idiot. I'm not one of them though.

"It's only when the tide goes out we can see who's been swimming naked" - Wozza Buffet
You may have the last laugh of course.

dsp_3

thanks for the replys so far, we do have a child of 20 months and are both in our 20's , so school will not be an issue for another 2 years and also we would not want him going to school where we live now, so its a gamble but i am seriously considering it , we will get a slightlybigger house and be in a better area so it really looks like a plan, but i will monitor what we can get , the house we are looking at to buy are always 10 - 20k over what we can afford and we want our next purchase to be long term

Massive_2

Sell to rent if you prefer the lifestyle, but don't expect property prices to be anything but significantly higher in 12 months' time.

Melissa177

I think you're crazy, personally.

But it's a personal decision - one for you to take. I wouldn't do it.

the house we are looking at to buy are always 10 - 20k over what we can afford and we want our next purchase to be long term

This isn't going to change - the house you "really" want will always be slightly out of reach - it's part of human nature to always want more.

There is an alternative way of looking at this: if you want a property that is just out of reach, why not plan to get there? Decide what you want, and therefore what you need, and put a plan together to get it.

I'm doing a similar thing. I've found a flat that I would love to purchase in a couple of years time which is way over what I can afford now. So I'm working backwards to figure out how to get it. I think that would be a more sensible thing to do rather than jumping off the property ladder, whilst hoping that the distance between the rungs decreases.

Good luck with whatever you decide - every decision is personal, and it has to be the right one for you.

dsp_3

Massive wrote: »

Sell to rent if you prefer the lifestyle, but don't expect property prices to be anything but significantly higher in 12 months' time.

i might still be buying within 6 months if my dream house was for sale, i just can't risk my sale falling through if i did find the dream house , its happened to me before and i drive past that house all the time now :mad:

Melissa177

One thing I do think is that if you are looking in exceptionally sought after areas to buy in, it might be sensible to put yourself in a chain-free position in order to make yourself attractive to a vendor. So if you're jumping on an off quickly (ie, 6 months) that might be good. But not for a year, and not more. That said, I don't know what the market in Milton Keynes is like - my London-view may be distorting things.