Stepping OFF the property ladder?

PrincessJR

Hi,

For numerous reasons mentioned in other posts, my Husband and I are considering selling our home to my In laws (its too small for us and they need to downsize) and renting a larger home, for a maximum of 2 years while we build on our deposit, hopefully meaning we will have around £40k when the time comes.

Is it foolish to jump off the property ladder, or can it, in certain circumstances, be the better option?

notanewuser

No more foolish than posting multiple threads on the same issue.

jackieblack

PrincessJR wrote: »

Is it foolish to jump off the property ladder, or can it, in certain circumstances, be the better option?

We did this, several years ago and it worked well for us.

At the time we were living in a house that we thought would take a while to sell, and we wanted to be living in a particular area by a particular date to give our child the best chance of a place in the local school (we wanted to move anyway, but wanted to do it sooner rather than later for the school and other reasons)
Property in our preferred area rarely came onto the market and usually sold by 'word of mouth' without the need to advertise, but one day I was walking past the agents when they were putting information in the window of a property available to rent in the area in which we wanted to live. I went straight in and arranged an appointment to view and we agreed to rent for a year (which put us in the right area for the important dates).
We moved out of our house which, much to our surprise, sold in a few months, much quicker than we'd anticipated.
We were then in a much better position to purchase when our current house became available for sale and, with a mortgage agreed in principle beforehand and no chain, the purchase went through quite easily and we had the keys a week before the year's rental was up.

It is VERY unlikely that things would have worked out so well for us had we not done it this way. It did mean that we were paying both rent and mortgage for a few months (which you would not need to do) but it was worth it in the long run.
We have now been in the new house almost 13 years and cannot foresee ever moving again.

PrincessJR

notanewuser wrote: »

No more foolish than posting multiple threads on the same issue.

Thanks for that constructive and useful reply. Although my posts are based around the same issue, they are in fact asking different questions and dealing with different sub-issues,plus I have posted in 2 seperate areas to gain a wider perspective.
Thank you for yours.

Thrugelmir

PrincessJR wrote: »

Is it foolish to jump off the property ladder, or can it, in certain circumstances, be the better option?

Do what's right for you and your circumstances. If you can save for another property whilst renting. Then I would say the right one.

Difficult to see property prices rising significantly in the the medium term. Quite possibly the reverse. So unlikely you'll disadvantage yourselves financially.

PrincessJR

Thanks for the replies. I think it looks likely that renting in the short term is our best option. Ihad a word with a broker, who advised us that as we will have around a 20% deposit (£40k) when we come to buy we will probably need 1-2 years accounts as proof of income, but anything could happen between now and then so I think we will plan for 2 years of renting and saving.

On the plus side, it does mean we can test out potential long term areas, without commiting to a mortgage.

bigadaj

In some ways it makes more sense, as with a decent deposit and being chain free you should be attractive to most vendors.

I can't see house prices moving much in the next few years but for many people there is a combination of a perceived stigma in renting and paranoia of being off the ladder.

This is all assuming that you have the discipline to save, not saying you haven't but much of the population seem to see income as a target to be spent rather than saved, invested etc

joerugby

Not sure why people still refer to a "property ladder". Times have changed. Saving until you can afford a property that you will live in for the foreseeable future is the way forward. The absence of price inflation to provide equity for a bigger deposit to move up and the increasing costs of buying / selling mean that climbing up a "ladder" step by step may well be a thing of the past