Moving abroad: What to do with our house? Advice pls

metalmosher

My husband and I are trying to plan a move abroad however we're in quite a quandary with what to do with our house. To give some background, we bought a 3 bed end of terrace house which needed full renovation at the height of the peak in 2007 in a borough on the London/Essex border, for 250k. A couple of years in and the value was as low as £210k. Over the last 6 years we’ve completed the renovation which includes: new bathroom, new kitchen, new boiler and central heating system, new electrics and wiring, new garden with decking and seating area, new flooring and skirting throughout, some replastering, new PVC front door and redecoration throughout. In all, we’ve spent in excess of £30k on the house.

Last week, we’ve had valuations from 2 local agents at 250k and 265k. This in itself is quite heartbreaking given the care and attention, let alone cold hard cash we’ve put into it. We’re quite determined not to sell as we love the house and may want to move back into it when we return. We may only stay abroad for 1-2 years although it has the potential to be longer.

Rental estimates from local agents came in at 1300-1400 per month. Our problem is that we have very little equity and our mortgage costs £1450 per month. Once you take into account agency fees of 15%, insurances, wear and tear and tax payable on interest part of mortgage, we’d be left with approx 950-1000 per month. Whilst we are able to cover the 450-500 shortfall each month, we’re struggling to see financially what is the best thing to do. In 6 years we’ve seen virtually zero increase in house prices, in part due to our ‘unpopular’ location and its very unclear if house prices will rise significantly in the next 5 years. At first we were very optimistic they would as there has been a lot of investment in the area, but now I’m not so sure and wondering if we should cut our losses.

Our heads seem to tell us that selling will be lower hassle and we can at least release some cash and protect against further falls in value, but our hearts don’t want to let go of our home that we worked so hard on for less than it’s worth especially if there is potential for it to be worth much more when we return.
We’re not getting very far on this between ourselves, so I was hoping someone out there could give us some different perspectives and a little bit of advice that might help us make this decision?

silvercar

Depends what you think house prices will do in the long term. If house prices go up, then rents will follow so you will eventually cover your costs. You could consider the amount you will have to pay each month to keep the house going as an insurance policy against not being able to afford to buy a similar home on your return.

seven-day-weekend

I can't advise you on what to do with your house, but would strongly advise that you keep a property in the UK.

ognum

Please, please do not let a house that you 'love'. Appart from your finances that seem to make this impossible letting is a buisness. You need to remove your heart from the house or you will get very upset and the tenants will have tough time.

Just sell and move on!

witchy1066

sell and move on,

we held on to my house , knowing in our hearts we would never move back but it seemed like the right thing to do at the time ,
in 3 years we had 3 tenants, had problems with them all , luckily we had a good agent but it was like carrying a huge weight around for years,
the relief when it was sold was immense but by this time it had long ceased to be my home

Slinky

It's very hard to have tenants in a loved home. We had 4 lots of people in 3 years, none of them did anything particularly bad, but they all peed me off in different ways over time. I only did it as my Dad was round the corner and could keep an eye on things for me. I certainly wouldn't have kept the house it if we'd moved abroad.

We now live back in the house we rented out.

HAMISH_MCTAVISH

Selling would be a very, very bad idea in my opinion.

-Prices are rising, and look set to rise much faster over the next few years

-We're currently at the same point of the housing boom/bust cycle that we were in the mid 90's, remember many people were frustrated then about price falls and negative equity for 5 or 6 years, and look what happened next.

-Stamp duty threshold changes are being planned for next year which will likely cause a big jump up in those houses caught at the 250K limit currently.

Getting off the ladder is usually a very bad idea at any time.

But getting off the ladder at the very bottom of a boom/bust cycle after years of depressed prices, and right as the recovery starts, has to be one of the worst ideas in history.

seven-day-weekend

The reason I said to keep a property (not necessarily your current property) in the UK is I have seen so many expats sell up and it hasn't worked out in their new country and they can't come back because they have no job and nowhere to live. You can't always get Benefits straight away. It's a safety net, even if it is only a studio flat or a mobile home.

We kept our home for the eight years we lived in Spain as we always intended to return at some point, and I'm so glad we did, as the money we got for the Spanish house would only have bought a flat here, instead of the three-bed house we left, and many people can't sell their houses at all, we were lucky.

Of course none of this may apply to you, but that is my advice, for what it is worth.

metalmosher

Thank you so much for all your comments, I really appreciate the feedback.

I know that letting a house can be a time consuming business (I used to run my own business and I know how hard it can be!) so whilst I am reluctant to get into it all again, selling now would be at a loss, and my greatest concern is that prices *may* shoot up and then we'd have made one bad mistake after the other (buying at the peak and selling at the low :mad:).

Seven-day-weekend, I see your point, however our move abroad is with my company, so I'm fairly confident that if we came back, it would also be with that company (or a hefty redundancy package!) so I'm not too concerned about having somewhere to live back here, but I can see the advantages of having that option.

I am also not too worried about having tenants in. Although I love the house now, I'm very practical about the fact that if we move out, its no longer our home, and tenants are only required to keep it in the bare minimum condition, so I'm factoring in some money in our budget for doing work to it if/when we came back, so that we could live in it again. Although on consideration, if we come back, I'm 99% certain we won't live in this house again anyway, we have outgrown it now and would need somewhere bigger.

Still needs some thought, but we're leaning towards the rental option I think...