Renting my house and buying in London - What to do?

v360ce

Hi.

Im in a dilemma. Can anyone advise?

I have a 2 bed house that is paid off and is outside London. Its worth about £300k. The thing is, I want to live in London. Its likely I would only be looking at 2, possibly 3 bed places due to the huge increases in cost, likely to be in the region of £700k. What should I do?

Bear in mind I have a salary in the region of 100k.

Option A
Sell my house, cash in when times are good to sell. Use that as a deposit on a house. A mortgage of about £400k would mean roughly a 2k a month. I could rent out the second room.
Assume a stamp duty of around £28k

Option B
Somehow keep my house and also buy in London if possible. Rent my house out. Remortgage it to the max. Assume the rental income of around £1200 pcm would cover the repayments. Get a second mortgage (if possible) on a new place in London.

Option C
Rent my house out. Rent in London for a set period of time to bide me time to decide on areas.

Option D
Something I haven't thought of.

Any advice would be appreciated.

Cheers

Annisele

I'd go for option D - move into rented accommodation in London asap (to see if I liked it, and to check out areas), and put my house on the market. Then, if I realised quickly that I hated living in London, I'd still have my house to come back to. If I did like London and my house sold, then I'd be in a great position buy - huge deposit and no chain.

However, that's based on my own personal opinion that the London property market is overheated. I've been predicting a crash for a few years now, and been constantly wrong - so I'm not a good person to listen to about expected price changes!

Jenniefour

It depends what your aims are other than moving to London. I'd go for option A. I wouldn't want the hassle of being a landlord from a distance.

amnblog

What 'feels' right to you V360?

v360ce

Thanks Guys.

I forgot to mention, over the past 3 months I have actually moved out and moved in with a friend in London to 'test the water'. A friend of mine is currently in my house. Its in that time Ive realised that I love London living, and hence now posting on this forum.

Im slowly starting to come to the conclusion that selling up is the way forward. I just cant see myself liking the idea of having 2 mortgages totalling around 600k and all of the stress that goes with it and rending a house. Who knows, it might be very stress free, but im someone who prefers an easier life.

Im going to start having a look at house/flat options that are in my price range. Going to see them will hopefully help my decision further. I can then think about putting my house on the market.