What to do with house?

gearfreak

Hi,
I'm looking for some advice on which way would be the best way to go with my current house. The situation at the moment is that I brought the house 6 years ago just before the market crashed for £147,500 (it was on the market for £149500), I have a mortgage of £110,000.

I put the house up for sale about 3 years ago and between then and January this year only had three viewings despite dropping the price to £137500 and taking advice from the estate agent on what to change on the house to improve the chances of selling. And no offers.

The reason I'm looking to sell is that the house is a small 2 bed terrace and with one baby on the way and hopefully another one somewhere in the future we want to move to a 3 bed house that is closer to shops etc.

There are two other properties up for sale in the same row of a similar size, neither of which have had offers and the one has been on the market since we moved in to ours and they have dropped the price to £126k.

The other thing is that the previous owners of my house did get planning permission about ten years ago to build a two storey rear extension to provide three bedrooms and an upstairs bathroom. Obviously this is now out of date, but there is a precedence set here as there are other houses in the row that have similar extensions. I think we would be looking at about £30-40k for the extension.

So my query is should I sit tight and wait for 1/2 years to see what happens to house prices and the market generally and then try and sell and save up as much money as possible for the next house? Should I drop the price even more? Or should I plan for the extension? Hope that makes sense?

Thanks

thelem

Could you afford a mortgage on a three bed house if you sold your house for £120k (5% below comparible asking price)?
Can you afford to increase your mortgage by £30-40k?
Have you considered letting your two bed, and renting a three bed?

If it were me, I'd probably be tempted to extend, but a lot will depend on how much cash you would get by selling your house and therefore what deposit you can put down on a new property. Don't be too disheartened that your house has lost value though - if yours has lost £25k, how much has a three bed house lost?

SuzieSue

I'd definitely extend unless I didn't want to stay in the area.