Selling up...

clarab_3

hi folks - long time no see, i've been keeping the head down and doing overtime.

Been giving a lot of thought to houseprices recently and selling up. Basically I have a good amount of equity in my home, but stand to lose about £20k from that if prices crash in the next year as many are mooting will happen. I live in the city centre and its typically one of the first areas people will bail out of in a problem market.

Now, no one can afford to lose £20k and selling up would repay all debt and leave me a nice nest egg to tie up. Renting would not cost more than my mortgage.

So why am I so sentimental about my home? How did any other DFW's deal with moving into a rental?

Storm

I've never owned my own home, so here's some of the best bits about living in rented places...

You don't have to worry about repairs - just phone the agent/landlord & ask them to fix whatever is the problem

If a smelly curry house/chip shop etc opens up next door, you can just move!

You can move to be closer to work/family/friends etc very easily

You can make the house/flat completely your own with pictures, ornaments etc, and most places will let you paint too, as long as it's fairly neutral colours

Rental prices remain fairly stable, no more worries about interest rate rises!

bananakinz

This is what I suggested to Hubby this morning, and he is mulling it over. Our house is on the market, and we are thinking about moving out of the area where houses are cheaper for bigger properties and clearing SOME of our debt without increasing the mortgage.

A bigger house has just come up for rent 'round' the corner, we wouldn't have to change kids school, make 'new' friends, can clear ALL our debt and then save a fair amount (10k) over the next year in order to have a larger house but with no bigger mortgage than we have now.

Already had Mum on the phone saying what a bad idea, you won't be able to get back on the housing ladder again etc, it won't be yours blah blah blah

I just don't know .....

onamission_2

I couldn't read this thread and not respond. I am in sort of similiar situation. I could get my house on market (needs some work) but I would probably still be 30k clear but I am really worried about rising rates etc etc. Having spoke with my partner about the whole scenario, we are going to sell up clear most of the debts and start again. I must admit that having rented and bought I find the whole mortgage thing a strain and I worry constantly about the mortgage v debt scenario I'm in. At least doing this I can move to a nicer area or move back home - feel like there is much more choice on the horizon. just have to hang in for another couple of months until I complete my degree.......

bandraoi

If the house market doesn't crash, then your rent may well rise whereas in ten years with a house, your mortgage is likely to stay roughly the same.

Your mortgage also has an end date, renting does not, in the long term your rental costs are likely to be higher.

A crash in the housing market will make not only reduce the price of the house you've currently got, it's likely to reduce the price of the house you'd buy to replace it with, overall you're very unlikely to feel the impact of the loss of £20K.

Also selling a house is a costly business. The % costs in the transaction are very high - solicitors fees, estate agents fees, and you've already spent alot of money in purchasing the property in the first place - surveys, more solicitors fees, stamp duty etc.

jessie-jane

We sold our house and then rentes it back without having to move,however to do this the buyer usually pays only 85-90% of value, so you need to weigh up if you can afford to lose the difference ,although you dont have estate agents feesor removal costs so for us it worked out fine.

Wannabesaver_4

I am in excatly your position and will be completing (fingers crossed)on Friday. We will have enough equity to settle our secured loan and offer 50% full and finals for unsecured.

I do feel sentimental about selling my house (not to mention very stressed) but we have found a lovely house for the same as our mortgage and now i cant wait!

I too am looking forward to not having a mortgage or worrying that the boiler will cost be £1000 if it goes wrong.

My advice is that if you want a clean slate then go for it! good luck x

ZTD

If house prices do crash, the house you want to move into may well decrease in price too - but your mortgage will not.

Spendaholic_Chick

I'm in a similar quandry. Been mulling this over a few months now and still undecided. I want to move to a smaller place anyway but just can't seem to make the decision. Had the house valued last month and if it sold forr a few grand less than they reckon I could still pay off my debts and be left with a nest egg of around £30k.

I keep thinking 'what's the point of having a house cos when I'm older they just make you sell it anyway to pay for your care fees, whereas if you don't own your own property the NHS pays for it'. THis is from experience seeing this where I work (NHS).

*Goes to ponder some more*

clarab_3

Thanks folks - I wasn't ignoring all your great replies, work just kind of took over!

Looks like im not the only one in this position.

To clarify my own position, I have apprix £40k in equity in my home just now.
I would be looking to buy again early in 2009, when I believe (and all the advisors that I have been talking to believe) house prices will have settled.

As I see it, I could have approx £20k in a high interest account, plus investing the money i am currently spending on debt repayments in the same savings account for two years.

I am likely to be able to buy a flat similar to my own for £80k in two years time, and put down a sizable deposit.

Really, its only my overt sentimentality thats stopping me.

lynzpower

selling a house is a costly business. The % costs in the transaction are very high - solicitors fees, estate agents fees, and you've already spent alot of money in purchasing the property in the first place - surveys, more solicitors fees, stamp duty etc.

this is moneysaving expert- not moneywasting expert!! I completely refrubed my house ( well not the floors, but repainted, bought new stuff for it and styled it out to the max) and paid the solicitors estate agents and removal men.

I had a budget of 1200 for the lot, and went over by about 75 quid.

I came out 37k better off. I paid off some debts, stoozing some others at the mo, and feeling pretty perky about the whole thing.

I didnt HAVE to do this tho, I chose to, and I think the only thing posing problem is when they are attached to bricks & mortar. Ive never been one for caring where I live, wherever I lay my hat & all that

As an aside, I came off my fixed rate at end of October, when my place was under offer, and my outgoings on mortgae were 750 -they went up to 1100 :eek: I just would not have been able to handle the rising prices, and when you can rent for the same or less- why would I want to ?