Live off interest?

IvanOpinion

GracieP wrote: »

This is probably not the place to discuss it, but I think the housing market has peaked or will soon. I'd be more worried about going away and coming back to find my house worth less than it is now. It'll be early next year at the soonest before I sell anyway, so I'll have a better idea then. If the market somehow roars on I'll wait a little while to sell up. But either way my long term plan is to settle down in Ireland where house prices are most definitely falling so I'm not worried about being priced out of the market.

I think that is the million dollar question or possibbly gamble. A friend of mine thought the market had peaked a few years back, sold his house, went into rented accomodation and banked a large sum of money ... he reckons that today he could not afford to buy his old house back. Be careful of the definition of 'falling' ... in many cases all this means is that the monthly percentage increase is falling, not the price (i.e. house price has stagnated or is only rising 0.5% per month instead of 3%).

There is a lot to think about, it is a big decision. I know in the North of Ireland the proparty market has stagnated. A solicitor friend was telling me that at the beginning of the year their practice was doing up to 100 conveyancing tasks a month whereas in August they only did 3.

Ivan

Speculator

make sure your debit card does not expire whilst you are travelling!

baby_boomer

IvanOpinion wrote: »

I don;t know how you could work it but it would be a shame to sell your house simply because it is likely to accrue in value more than any savings account

I'm not sure housing is set to accrue in value or not.

What is certain, is that the cost of selling a house and later getting back onto the property ladder at £250K+ is very considerable. £7.5K stamp duty for starters, £2.5K+ EA fees, legal fees, moving and storage expenses etc. etc.

These are unnecessary expenses if you follow Ivan's suggestion.

sharkmark

Firstly I don't think it's silly or irresponsible - I am not a hippy but I believe if everyone was forced to travel for one year after high school we may come to understand different cultures a little better and world peace might follow...well not sure about that but we may actually be able to understand another countries viewpoint better.

Secondly I agree with you Gracie - I think we're seeing the beginnings of a credit crunch caused by our American cousings overstretching themselves...something us Brits would never do (!!!) and this *might* lead to a property adjustment here...if I were free, single and without a newborn child I would be doing exactly what you are doing now...another reason to sell is that if you are single who knows who you may meet on your travels and you may not even end up coming back to Blighty...(2 of my best mates didn't when they went off travelling - one stayed in NZ and the other in Thailand!!!)

One of my biggest regrets is that me and my wife did not go travelling 5 years ago - we now have a lovely son who I wouldn't swap for the world but it will prove tricky to go travelling now until he is at least 5 years old and by then we'll probably have another little one come along...so it all becomes too much work/hassle/expensive so I'm retiring myself to the fact we'll have *nice holidays*......great......

So what I am saying is that with the benefit of hindsight if I found myself in your position I'd go now...whether you sell or rent is upto you (stamp duty is a good point by baby boomer so don't forget that) but personally I would rather sell the house and take the gamble that prices will not move much or may remain static or even fall...if you rent and have problem tenants then you'll be in Bali trying to deal with your broken shower - not what you want really...

Suggestions for travel include the obligatory Thailand (which is quite simply incredible - but must go off beaten track), Vietnam - try Danang and Hanoi rather than HCMC, Malaysia particularly Borneo - also if you want somewhere different try Kazakhstan - (where Borat is from) stunning in Almaty and feels a bit like a fronteir town (hardly any tourists from Europe have gone there yet)

Lastly try to offset your carbon emissions for your travel - you can plant trees to cover this - now I realise I do sound like a hippy - BUT I think it's the responsible thing to do - air travel emits the highest CO2 per mile than any other form of travel - except if you ride on the back of a cow maybe as they trump a lot - so try using trains and boats - much more fun too as you get to see more.

Have a lovely time - I'm green with envy...!

KingKenny

My advice,
Sell up now, be realistic in your price, so to attract a buyer, and get rid of it.

Stick the lump sum in http://www.icesave.co.uk/ or something similar, spread it around if you want 33k per account etc? How well do you sleep at night, the FSA ruling and all that.

Next you are overseas, register for interest at gross, R85 i think, so you will get 150k/100*6.03% = £9045/12 = £753.75 per month.
Live like a king in Thailand on £750.00 quid per month?:beer:

Not bad, go and have a great time, you only live once!

Come back in a couple of years, and buy your old place back at 20% less than what you off loaded it for?:rotfl:

Go my old son!!!:T

BTW - Open a Nationwide Flex current account, link this to your ICE Save account as the nominated linked account.

The monthly interest will be paid into your Flex account, you can draw your monthly payment out anywhere in the world, incur no costs, and get a good exchange rate. The Flex account works well!

conspirator

sharkmark wrote: »

Lastly try to offset your carbon emissions for your travel - you can plant trees to cover this - now I realise I do sound like a hippy - BUT I think it's the responsible thing to do - air travel emits the highest CO2 per mile than any other form of travel - except if you ride on the back of a cow maybe as they trump a lot - so try using trains and boats - much more fun too as you get to see more.

Have a lovely time - I'm green with envy...!

Made me giggle ^

Whatever your choice, enjoy your travelling and power to you. Excitement awaits with new choices to be made instead of the daily routine ones.

:T

GracieP

Thanks for all the replies. First off I'm married so I do hope I don't meet the love of my life while travelling as it will be very upsetting all around.If we do sell up I doubt we will be buying in London again. We're both Irish and long-term plan to go home. So either way we'll be selling our London house one day and moving to Dublin. And I estimate we'll be paying well over £20k on stamp duty in Ireland as we will be most likely paying at 9%, unless prices drop so far that we can find a house we like under E381k at which point we'll only be paying 6%.

IvanOpinion

Gracie, if yoou go please consider my suggestion of a blog ... it would be nice to follow somebodies antics as they travel the world.

Ivan

wkt54

KingKenny wrote: »

My advice,


Next you are overseas, register for interest at gross, R85 i think, so you will get 150k/100*6.03% = £9045/12 = £753.75 per month.


The monthly interest will be paid into your Flex account, you can draw your monthly payment out anywhere in the world, incur no costs, and get a good exchange rate. The Flex account works well!

Don't forget, if you get interest gross, you will have to pay tax on some of it.

InMyDreams

wkt54 wrote: »

Don't forget, if you get interest gross, you will have to pay tax on some of it.

You can only register for gross income if you believe that your income will not be enough to pay tax in the first place (about 5K ish). So if you've already earned over that since April you can't do it this year. If you already have your £150k in the bank by next April you won't be able to do it next year either. Even if you finished working right at the end of this tax year, filled out the R85 at the beginning of the next tax year (with no job and no savings) and then sold your house, you'd be hard pushed to convince anyone that it was never your intention to have an income of over £5k.