Recession?

carolt

Crucially, you're pregnant, which is both a great time for sorting out your finances while you can and a terrible time to have the hassle of selling/finding suitable rented accommodation.

With the new responsibilities you're soon to have, do your best to cut down on expenditure now to reduce debts. If you're happy with the house AND the area (is it in a catchment area for good schools, for example? - you might not care about that now, but if you get stuck there due to negative equity, then you soon would) then selling might not be the easiest option or necessary - but if your debts are overwhelming, your oh may have a point - on one salary (or one and a half or two minus childcare costs) debts and possibly rising mortgage payments will become a lot harder to service.

Without any figures, only you can do the maths. I'd say there's a lot to be said for bringing children up in a home you own. But having children is certainly easier without major financial stresses. Only you can work out which side of the line you're on.

Best of luck - and by the way, kids can be v cheap if required - this site has excellent tips! And at the end of the day, take it easy - pregnancy is a damn sight more important than buying/renting a house!

bobbie78

Congrats on the baby. Just my thoughts for you to consider, do you have enough bedrooms for a baby (or 2) if you stayed there for another 5 years say? Unless you were moving somewhere with more rooms then you might as well stay where you are.

Have a search on the mortgages board as I *think* there are people on there who have contested large exit fee's / mortgage fee's for the same reasons people get money back from banks. Sorry don't know the details I haven't had to do either but they might be able to point you in the right direction so that re-mortgaging to stay won't cost the earth. Or the other way to look at it if you are stuck is it would cost you the same to sell and buy your house in fee's and stamp duty anyway so you'd still need that money.

Only you can know if you like that area, if it you are unlikley to need to move for work - what are the schools like around there for your expectant little one. The only way people really end up making money from these house sales as far as I can see - and I'm sure I'm probably wrong - is by upsizing as a family grows then downsizing once all the kids leave the nest and you don't need all those extra bedrooms. So if you treat your house as a home and love the house, the area, the schools etc then don't worry about the property !!!!!!, if you look at is as an investment, maybe look at the investment board on here and if you do sell see how best to invest your equity for the best results. But either way you will end up having to pay to live somewhere, so if you do like it if it was me I'd stay put, as long as you can afford it ok on one salary for when you will be off for a year or two soon.

Fergie73

It depends entirely on your situation. I have a lot of sympathy for your OH as I always felt the same owning property - if you end up trapped in negative equity, and you're living somewhere you don't want to be, or need to move, that's an absolute nightmare.

Also, if there is a recession, and there happens to be a period of unemployment, you can get benefits for rent but not for the full mortgage payment, so in many ways, if you are worried about recession, house price falls and possible unemployment periods (all very possible looking at the moment), selling up isn't a bad idea.

On the other hand, if you're in a house you like, and you can afford payments, selling simply because you think prices have hit the top can be extremely risky. It's impossible to call the top with any certainty. If it wasn't, everyone would be millionaires :cool:

You risk losing your home and ending up renting as prices continue to rise. If there was no other good reason for selling up, but purely a profit motive, that would be a real bummer.

talksalot81

LandyAndy wrote: »

Exactly. If you plan to live in your house for the next, say, ten years forget all this doom mongering. At the end of that time it will be worth more than your mortgage and, 99.9% certainly, more than its worth now.

Is that not conveniently ignoring the question of whether it would be affordable in the case of a recession!? There is a very strong chance you are correct (although study of the japanese scenario will demonstrate that there is no guarantee) - however that does not matter if the OP is £100 a month away from the red line and IRs went up further.

Guy_Montag

epz wrote: »

problem for landlords is when people get skint they also move back to mummy and daddys, take in lodgers and house share especially if there is a dissincentive to buy ie falling prices.

as you say things dont happen in isolation but it would be a brave landlord who tried to up the rent of a paying tennant in a recession.

:rotfl:Good points all, might I add another one?
There is a better chance that a tenant will stop paying rent during a recession than at other times.

LandyAndy

Romani_Ite_Domum wrote: »

99.9% that a house wil be worth more in 10 years time? What utter tosh.
How can you possibly know that?

We could have the scenario that property will stagnate for a couple of years, then crash, bottoming out 7 years later and start the next boom/bust cycle making it 20% less in 10 years than its worth today.

Not saying the odds are high, but they are a lot higher than 0.1%

Take any ten year period in the last seventy and the price of houses has been higher at the end than at the beginning. History isn't everything but it is better than hysteria.

LandyAndy

talksalot81 wrote: »

Is that not conveniently ignoring the question of whether it would be affordable in the case of a recession!? There is a very strong chance you are correct (although study of the japanese scenario will demonstrate that there is no guarantee) - however that does not matter if the OP is £100 a month away from the red line and IRs went up further.

Of course. But this OP isn't suggesting that affordability is an issue. Their OH is suggesting the sale as a speculative venture.

Guy_Montag

As a regular poster on GHPC & a thorough housing bear, I don't think I would ever STR, it's too damn risky for me, especially if I had a family.

Romani_Ite_Domum

LandyAndy wrote: »

Take any ten year period in the last seventy and the price of houses has been higher at the end than at the beginning. History isn't everything but it is better than hysteria.

Agreed, over any 10 year period the house price has increased. What you said in your previous post was that a house will be worth more in 10 years time.

If you are going on history. During the last crash, the 10 year perod of 89-99, property was worth less at the end of the period. A fall in real times.

This current boom has been longer and bigger and the fallout could be huge. It is not outside the realms of possibilty of possibilty that a house may see negative nominal HPI over the next 10 years.

I would give the odds higher than 0.1% but even at that the odds are 14000 times more likely than winning the lottery.

Rick62

If you STR (sell to rent) you might well make some money, however, you will have the transaction costs of selling and then buying back, including stamp duty and fees, and you will have to rent for several years, usually from amateur landlords who mess you around, maybe sell and forcing you to keep moving, you will then have to find another 'family house', at a time when people in nice family homes will not be wanting to sell unless they absolutely have to and you will have to correctly judge both the top and bottom of the market. Is it worth all that aggrevation for a few thousand pounds?

I too think prices are overinflated right now and could come down and, for a number of reasons, am currently renting, however if I owned a nice family home which was affordable I would not take on the costs, risk and aggrevation of STRing.