thinking of selling up

densol_2

You have a good idea to make yourself chain free if a great house comes up in a very desirable area. The thing is would it not be those houses that go up in value the most - those that are in short supply ? You may find that those area don't crash as fast ?

I dunno really - I just recall my friend selling up and renting in 2000 when I bought this house. She had the same idea - but she dwindled into her savings. The house prices never crashed and she got very far behind in the market and basically had to downsize, when she got back on.

Lastly when I left my partner I rented a flat. Later when I met my new Husband to be we rented a house together but we HATED it. Really did. When we are used to having our own things , can decorate when you like etc etc and then being in rented we could not wait to get out and back into this house when we bought my ex out.

lynzpower

Melissa177 wrote: »

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).

Yeah we might well do. It makes much more sense IMHO to put down a massive deposit tho when we do and overpay at the rate of knots at that stage. I wouldnt buy a new build again thats for sure, and I am always on the lookout for a bargain If I happen accross a place that suits us and looks financially worth it, of course we'll do it. However, London isnt where we'd raise our kids when we have them so we wouldnt buy a family home here in any case.

I would like to be in a position where by July I wil be back to my earning capacity again, in which case I will put away 700+. OH isnt earning to his capacity as yet, but maybe when hes a bit more stable with his earnings, he could put in 2-300 a month. Therefore we aim to put a grand a month into savings for it.

I dont think its madness at all. WHat I think is madness is the sheer amount of people who want to be on this mythical ladder regardless of the fact that you spend hundreds every month to the bank for the privilidge, and its not moneysaving at all. Personally, I prefer the bank to pay ME hundreds thanks very much.

Melissa177

I dont think its madness at all. WHat I think is madness is the sheer amount of people who want to be on this mythical ladder regardless of the fact that you spend hundreds every month to the bank for the privilidge, and its not moneysaving at all. Personally, I prefer the bank to pay ME hundreds thanks very much.

Hmm, but you're paying hundreds of pounds a month in rent each month? That's not moneysaving either? (Unless your rent is significantly less than a mortgage would be, which mine never has been in London)

Sounds like you have a good plan though to get your savings in gear and over pay on your mortgage!

franklee

Melissa177 wrote: »

Hmm, but you're paying hundreds of pounds a month in rent each month? That's not moneysaving either? (Unless your rent is significantly less than a mortgage would be, which mine never has been in London)

Well you've only got to look at typical rental yields to see if that's the case.

Last place I rented is up for sale at 280K and I was paying 680pcm.

Current place is "worth" 250K and rent is 800pcm.

I make that gross rental yields of 2.91% and 3.84%. This is on the south coast.

Interest on a deposit in an instant access internet savings account is 5.5% gross, 4.40% net for a basic rate taxpayer. Not forgetting that there may be another 0.25% rise in interest rates soon. It works for me having sold up and gone renting... But of course you need to be a good money saver and not fritter the proceeds!

roswell

Melissa177 wrote: »

Hmm, but you're paying hundreds of pounds a month in rent each month? That's not moneysaving either? (Unless your rent is significantly less than a mortgage would be, which mine never has been in London)

Sounds like you have a good plan though to get your savings in gear and over pay on your mortgage!

Interesting, cancel out what you paid for your house, As of this moment in time what would your mortgage be and what could you get in rent, id say over most of the contry at present it is cheaper to rent.

There isnt a housing shortage, if there was there wouldnt be anywhere to rent ... I can think of 5 devlopments of flats in the town i live in (Hartlepool) that have mass`s of TO LET boards and empty flats, If there was a shortage then rents would be higher than mortgage payments.

I purchased (Not in hartlepool) a few years back I couldnt afford to buy my house now .. sorry thats wrong, the Banks would lend me the money but personnaly I know i couldnt afford the payment plus normal bills with out being a lifeless work machine.

To the original poster,

If you feel that renting is for you, that you dont mind a months notice to get out or not being able to decorate to your tastes but feel that you will have a better life / better finances I would go for it. Have you looked into renting in the area you wish to move to ?? you may find the house you want is availabe to rent .. and cheaper than the equivilant mortgage.

lynzpower

Hmm, but you're paying hundreds of pounds a month in rent each month? That's not moneysaving either? (Unless your rent is significantly less than a mortgage would be, which mine never has been in London)

Yes, of course it is!!! A 2 bed house in zone 3 with a garden 758 a month

to buy it, Id be reckoning it would be worth 300k and thus the mortgage on it more like 1500 repayment. ( ive actually done it on the bbc calc and repayment would be 1773.81 assuming a 5% interest rate over 25yrs standard)

@ melissa, we saw 3 places in one afternoon & every one of them was at least half what the mortgage would have been. In fact Id go as far as to say you must be living in a very cheap pocket of london where its cheaper to buy than rent, do let me know where it is, Im always on the lookout for somewhere to buy if its within budget of course

franklee

lynzpower wrote: »

Yes, of course it is!!! A 2 bed house in zone 3 with a garden 758 a month

A gross rental yield of 3.03%, great deal for you and in the range I see round here.

lynzpower wrote: »

to buy it, Id be reckoning it would be worth 300k and thus the mortgage on it more like 1500 repayment. ( ive actually done it on the bbc calc and repayment would be 1773.81 assuming a 5% interest rate over 25yrs standard)

Exactly so. Repayments at the following interest rates would be:

5% interest: repayment mortgage £1753.77, interest only mortgage £1250.
5.5% interest: repayment mortgage £1842.26, interest only mortgage £1375.
6% interest: repayment mortgage £1932.90, interest only mortgage £1500.
6.5% interest: repayment mortgage £2025.62, interest only mortgage £1625.

lynzpower wrote: »

@ melissa, we saw 3 places in one afternoon & every one of them was at least half what the mortgage would have been. In fact Id go as far as to say you must be living in a very cheap pocket of london where its cheaper to buy than rent, do let me know where it is, Im always on the lookout for somewhere to buy if its within budget of course

Could be wrong but I think melissa is ignoring the equity she has in the property and so is using the price she purchased at. This ignores the interest that can be gained from the equity and so isn't a fair comparison. People also tend to forget they've put in a deposit when buying too which is also money that can earn income!

Taking everything into account the figures are quite shocking, another reason why I don't think current house prices are sustainable.

Melissa177

lynzpower wrote: »

Yes, of course it is!!! A 2 bed house in zone 3 with a garden 758 a month

to buy it, Id be reckoning it would be worth 300k and thus the mortgage on it more like 1500 repayment. ( ive actually done it on the bbc calc and repayment would be 1773.81 assuming a 5% interest rate over 25yrs standard)

@ melissa, we saw 3 places in one afternoon & every one of them was at least half what the mortgage would have been. In fact Id go as far as to say you must be living in a very cheap pocket of london where its cheaper to buy than rent, do let me know where it is, Im always on the lookout for somewhere to buy if its within budget of course

Wow - until recently I was renting a 2 bed house in zone 2 (Rotherhithe) for 1200 per month (split with a friend). A friend has just moved to a large one bed with her boyfriend for 1100 a month in Greenwich. Epping Forest (where you live, right?) is the wrong side of town for where I work, hence never looked around that area.

I bought in SW11 - Battersea/Clapham Junction area. There are some great buys around here on flats. One bed flats are going for 165K, and you can even buy 2/3 bed flats for the same price if you want to live in a dodgy block.

Link:

http://www.findaproperty.com/searchresults.aspx?loc=SW11&minprice=&maxprice=&bedrooms=0&res=0&salerent=0&edid=0&f.x=32&f.y=10

I bought: http://www.findaproperty.com/displayprop.aspx?edid=00&salerent=0&pid=045253&agentid=00928

Melissa177

franklee wrote: »

Could be wrong but I think melissa is ignoring the equity she has in the property and so is using the price she purchased at. This ignores the interest that can be gained from the equity and so isn't a fair comparison. People also tend to forget they've put in a deposit when buying too which is also money that can earn income!

Taking everything into account the figures are quite shocking, another reason why I don't think current house prices are sustainable.

That is true, but the housing market is rising much faster than any interest account (or even unit trusts/funds) would bring me. I bought the flat at around 20K less than current market value (the identical flat next door just went for 20K more than I paid), which was a massive help.

I don't believe for one moment that the housing market is going to crash significantly in London, despite the doom-mongerers on these forums. Everything I see about the demographics of London, and the way we are choosing to live now (in singles and couples, vs family units) makes me think it will continue to rise until there is a recession - and then I don't think there will be a significant drop.

I'm prepared to be proved wrong, but I think I'll take my chances and get on the property ladder rather than hope for a housing crash. I think there is something quite perverse about hoping for a housing crash - it's like you're "hoping" for the economy to go tits up!!

If I could rent for the equivalent amount that Lynzpower can (370 month, which is the equivalent for me as a single person as her rent), I might have been slower to buy somewhere. Alas, one bed flats are expensive to rent as a single person, so I chose to buy.

lynzpower

I agree, adn at 165, you did well to be honest, in that area. I agree, it is cheaper for us to rent as a couple, 758 on my own here wouldve been a struggle, but then its a 2 bdd house, so I could share again with a mate if it came to it

incidentally those properties on Charlotte Despard avenue, I know the estate well, ( just sold one of those a few weeks back at work) they are concrete builds and almost unmortgeable, which is why they have "attention investors" or "make a perfect BTL" they do but you need to pay cash for them. Its also fair to say that estate is somewhat dodgy but then where isnt in London eh!