Should we sell our house and rent??

sleepymans

Hi Fastnet,
Long term financial hardship and debt is a millstone around your (and your family's) neck and I understand how it feels to lie awake night after night trying to construct a resolution. Especially a speedy way out.


But, in your situation with recently increased income I would not be in a hurry to get off the property ladder.


You may well find with the help, information and advice available on MSE, that clearing those old debts could happen quicker than you are currently calculating.

However the reasons I would not sell up are :


Family are settled in current HOME (not house...its a home first and foremost)


If you found a house you liked to rent in an area you like/need, then its likely to appeal to others- so you may be in competition- and your credit history may mean you wont pass the letting agents credit checks so not be the successful applicant.


6 month tenancy agreements might not provide much security and stability - how would your kids feel if they had to change home and or school several times in the medium term?


The cost of selling and removals, deposits etc initially will take a bite from your equity sum.


Rents may be higher than your current housing costs and in any case, will be out of your control. If you are paying IO at the moment you have flexibility to pay that minimum or a bit more when your income rises.


With both of you working full time you may find the hassle of moving from rented to rented places additional strains on family life..moving house is very very time consuming and stressful. The fewer times you do it the better I think.


You still have a few years before another bedroom is necessary (though I understand its desirable). Some families find splitting a room or making a living room dual purpose e.g. parents room with sofa bed, can work with a bit of adjustment.


Getting back on the property ladder will probably be a lengthy hard slog, and you may just have swapped one uncomfortable situation(buckling down and clearing the debt in your current home in the short) for another (having less control over your housing in the medium/long term).


Bearing in mind your recent upturn in income why not give it another few months...........I would.


Good luck with whatever you decide.

davestretty

Let's get this into perspective, you have no net debt (i.e. assets are more than liabilities) have a home to live in are both employed and have a joint income of ~£85kpa (>£5000 per month net) - around 3 times the national average family income. Do you have company cars as well? As long as you can continue to service your debts the value of your assets will increase at a much higher rate than your debts ( do you live in/around London - the only part of the country where house prices are rising). I would dream of having your "problem". I may seem unsympathetic but I live in the real world north of Watford.
In most northern parts of the country REAL LIFE means earning minimum wage (or not much more), still falling house prices and negative equity, having in work benefits slashed and having to rely on food banks.
In comparison your situation is comfortably manageable. Interest only mortgage maybe £500 per month, £1000pm on debt repayment (purely guessing) still leaves over £3500 per month to live on. Maybe you could send your kids to boarding school and avoid the need for an extra bedroom.

Stewart_78

I have to say I agree with davestretty. I'm in a position where I have far more assets than debts and am actually quite well off in a net sense. I'm not boasting at all, I was lucky earlier in my life. But I don't want to sell any of it so I am stuck with the debt issue. I have taken the descision to see it through and hopefully emerge with my assets intact at some point.

Yes it is stressful. Yes, there are some dark moments. Yes, you wonder why you have 'wealth' but can't afford to eat. For me it's that I don't want to leave our home, I know I would never get anything else like it unless I could treble our income. I hope to have something to leave to my kids, I think their generation will have it tougher and I want to give them a leg up. I know there are people who would kill for my 'problems' and I know logically that all I have to do is work through it and try to minimise the bad feelings. So I keep coming back to that.

It's hard but unless the debt is really, really freaking you out and ruining your life, I would be trying to find ways to think more positively about your situation. If you start to deal with your debts, you might actually find it's kind of fun in a sick way!

Lydiasparkles

My God you've had some poor advice by the sounds of it. An IVA from a proper firm of Insolvency practitioners would never have tied you up for 18 years. Probably 5 years at the most.And only paying a % of the debts, not the whole amount. An initial consultation would be free and you could visit more than one firm and see what they all say. You don't say how much rent would be compared with mortgage costs. With equity growth, selling up and renting probably would cost you in the long run. I wonder why you have such high debts in first place. Perhaps you need some help with money management and controlling your spending. Of course it may be that some life event contributed to this situation. You could rent out your house, thereby still benefiting from equity growth and rent a property more suitable for you needs, if the area was cheaper you could make up some difference in your disposal income.

Dazedandconfused

Have you looked at the cost of a rental in your area with that many rooms is it affordable?
Just wondering as the house next door to me is a rental and their rent is more than double my mortgage

scrimper88

If the equity is enough to cover your debts and since your both on decent wages I'd definitely say sell up and rent. There's loads of lovely properties out there for rent and lots of decent land Lords.
We are renting a 4 bed terrace in a lovely area with gardens and everything..... There's no chance we could afford to buy anything like this!

Since your both on good wages youl be able to build up a decent deposit / rainy day fund.

The main perk of renting in my eyes is if for example your roof blows off, it gets fixed. Simple as

fastnet

davestretty wrote: »

Let's get this into perspective, you have no net debt (i.e. assets are more than liabilities) have a home to live in are both employed and have a joint income of ~£85kpa (>£5000 per month net) - around 3 times the national average family income. Do you have company cars as well?

As long as you can continue to service your debts the value of your assets will increase at a much higher rate than your debts ( do you live in/around London - the only part of the country where house prices are rising). I would dream of having your "problem". I may seem unsympathetic but I live in the real world north of Watford.
In most northern parts of the country REAL LIFE means earning minimum wage (or not much more), still falling house prices and negative equity, having in work benefits slashed and having to rely on food banks.
In comparison your situation is comfortably manageable. Interest only mortgage maybe £500 per month, £1000pm on debt repayment (purely guessing) still leaves over £3500 per month to live on. Maybe you could send your kids to boarding school and avoid the need for an extra bedroom.

My expereience on this board has been overwhelmingly supportive in one way or another, with people sharing thier views, experience and advice. I suppose it was only a matter of time before I would have to encounter someone judging me, when in actual fact you dont have the full story.

In most northern parts of the country REAL LIFE means earning minimum wage (or not much more), still falling house prices and negative equity, having in work benefits slashed and having to rely on food banks.

I am from Liverpool so please dont try and lecture me about 'real life' and living in the North, I was brought up on a council estate in a large, Irish family. I have worked incredibly hard to be in the position I am in now, with many setbacks along the way. After seven long years, I am beginning to come out the other side .

I would dream of having your "problem". I may seem unsympathetic but I live in the real world north of Watford.

I am not on this board for sympathy - but for advice... oh but wait.....

Maybe you could send your kids to boarding school and avoid the need for an extra bedroom.

How helpful.