no idea what to do for the best?

angelfire

(I've already posted this as an answer on another thread, but thought i'd ask in a thread of my own to see if I can get some advice)...

i am worried about the current situation and thinking about selling to rent until the market sorts itself out.

We bought for 109k two years ago, house still needs a lot doing at it and is in a nice area, nice street, is worth around 140k now and we owe 103k.

But we would like to get dd2 into a particular school in a nicer (more expensive) area, we also really like the area.

My immediate reaction to all of this unrest in the market etc, is to sell up and try to find somewhere to rent in the nicer area within the catchment area of said school - hoping to get back on the property ladder once prices have done their dropping. That way, we'll be able to afford a nicer, bigger house for the same or less than were paying now (hopefully).

OH gets really angry with me when i bring up the idea saying that the one thing we've got now is stability and we'd be throwing that away if we sell to rent. But my worry is that prices will drop so much that we'll end up in negative equity and stuck in this house meaning DD2 will have to go to the local school. I'd really rather not move her once she's settled so then we'll be stuck here.

The house only has 3 bedrooms (the third is too small to fit in a single bed, although it is extended downstairs and there's potential for further extension), and we were wanting to extend our family in a few years time.

OH is very stubborn and completely believes that being on the ladder is the very best thing regardless of anything else. Whereas I'm trying to think ahead and try to use what's happening to our advantage.

What does everyone think? am i foolish to want to sell? Is he correct to keep getting cross at me for worrying?

Should also add that currently the mortgage is only in his name, but my credit file will be clean by the time the fixed rate is up (next June), so we'll be in a slightly better position mortgage wise, although would not want to increase our monthly mortgage costs if you see what I mean...

CB1979_2

well you can't do anything for 9 months anyway unless you get hit with an early redemption charge, by which time you could well be in negative equity.

just leave him, miserable git

poppy10_2

!!!!!! wrote: »

OH gets really angry with me when i bring up the idea saying that the one thing we've got now is stability and we'd be throwing that away if we sell to rent.

To be fair he does have a point. Your house is now worth £140k with £103k outstanding on your mortgage. For you to end up in negative equity house prices would have to drop by over 26%. Possible, but by no means certain (and I'm a firm believer in a house price crash in the near future)

Is it worth uprooting just as a gamble - essentially you are betting that prices will tumble by a huge amount.

If you were planning to move anyway, so that DD2 can get into the ncie school, then definitely sell to rent rather than buying a new property in the current climate.

But if you are not sure if you want to move, then don't sell just because you are concerned about house prices. Stability is sometiems more important than profit, especially if you have a family!

Good luck whatever you do, it's a difficult situation to be in.

CYBERCIDERSAVER

How about trying to look at it another way.

Scenario: house prices drop 10% after you sell to rent...

So you sell for 140K, giving you 37k less solicitors and estate agent fees of say 3k = 34K

You buy a house for 140K in nicer area. Fees and Stamp = 3k so mortgage is now 109k so back where you started.....

But don't forget the cost of renting... agent fees, losing some (or all of your deposit... likelyhood of getting kicked out after a short period of time and having to find another rental property....It's an uncertain world out in rental land.

Especially if prices do start to drop. Some BTLs will inevitably jump ship as you wish to do..


My advice is go to church, pray and be nice to the vicar that he helps get your dd2 into a nice VA school.

If I owned my own house I wouldn't treat it as a commodity. It's your HOME. Imagine the feeling of living in 2 different houses in the space of a year. it's very unsettling. Especially for young children. Might as well split up and have the kids on the weekend!!

Good luck with whatever you decide.:)

epz_2

as someone who went to a pretty crappy local comp cause my folks are damn hippys, i am always amazed who low marks me and my mates got compaired to other schools.

now i freely admit im a lazy sod but ive mates who got also b's and c's but have gone on to do post doctoral phd's in real subjects, i know for a fact im smarter than several people who got a's and went to better schools.

given the situation pretty unlikely that house prices will rise even with inflation now that tv shows are jumping up and down on the falls, the btl yields are gone and if you rent you will probably pay less than your would in mortgage interest.

if it were me and my kid i would take the risk, say it costs you 5k its nothing compaired to the value you add to your childs education, but then i dont have any.

Doozergirl

I'd move in a shot if it meant getting my child into a good school.

Amarillo

Usually I would say hold on etc, see what happens. But a decent school is the one thing which I think is absolutely vital and I would personally do whatever it takes to get my child into a good one. In my opinion the first few years a really important and set the whole tone of a child's school experience and you can't put a monetary value on it. Good luck with whatever you decide to do.

littlesos

Doozergirl wrote: »

I'd move in a shot if it meant getting my child into a good school.

Problem is she wants to rent a house in the catchment area. What happens if her landlord decides to move them on just before the start of term, and there isn't another rentable house in the catchment area, she would lose her place at the school. Equally, does the school have enough places for all the catchment area children, if not being in rented accomodation may count against them (not sure whether it would, if it were me I'd check it out).

I'm all for good schools, but I'm more for happy settled children. My daughter didn't get a place in the v good school 100 yards away from my front door, and has to go to a school over 3 miles away, as it was the only one with a space. It's not as good a school, but she is very happy there and doing very well.

I have to agree with your husband, you have security now, if you sell to rent you won't have, how will you and your family cope if you have to move every 6 months?

What school does your eldest child go to? Wouldn't it make sense for them both to go the same school?

kodokan

littlesos wrote: »

Problem is she wants to rent a house in the catchment area. What happens if her landlord decides to move them on just before the start of term, and there isn't another rentable house in the catchment area, she would lose her place at the school. Equally, does the school have enough places for all the catchment area children, if not being in rented accomodation may count against them (not sure whether it would, if it were me I'd check it out).

This sort of information is available online, ours for example is 'www.cheshire.gov.uk', so I guess just substitute the county name. Admission rules do differ between LEAs, but I would lay good money that being in an owned house is not an oversubscription criteria!

After a couple of very unusual rules about children in LEA care, with medical reasons, etc, the relevant oversubscription criteria are usually (1) catchment, (2) sibling, (3) shortest 'crow flies' distance to the school. If any category is oversubscribed, ie, school can take 30 but there are 40 living in catchment, then the following rules will apply, so those children in catchment with a sibling, and then those living closest will get the places.

There are key dates on which you need to be living at the relevant address, to do with when the application has to be in, and when the offer is made. So long as these were adhered to, if you then genuinely had to move a week before school started because you'd been served notice, they wouldn't take the place back.

Check all this out on your county's website, which will give details of how many children applied to this school in 2007 and got places, and ask around the local playgroup, to see how many are going up to school in 2008. This would give you a good starting point (assuming it's next year you're looking at - and if it is, you'll need to get a shuffle on; my county's applications have to be in by Jan 14th...)

HTH

kodokan

pinkshoes

Don't forget that house prices in the catchment area of a good school are usually a LOT higher... so more realistically they either won't crash and stay high (possibly still increasing), or even if they do crash, no one will want to sell at a low price so will hold onto the house.

Do some research into renting, but you could get stuck in rented accomodation for a long time, eating into your deposit, then not be able to afford to buy in your catchment area.

I agree with your OH that stability is the most important thing. If getting into a good school is important, then why not buy in the catchment area, or at least look into it?

I went to the cr*p school in my area (parent taught at the good school, so didn't want to live near it, hence i wasn't in catchment area), but I still managed to come out with straight As at GCSE, 5 A Levels, and a degree from a good uni... so a child CAN do well in a cr*p school... they just need some equally consciencious (sp??) friends who also have ambition!

kodokan

pinkshoes wrote: »

Don't forget that house prices in the catchment area of a good school are usually a LOT higher... so more realistically they either won't crash and stay high (possibly still increasing), or even if they do crash, no one will want to sell at a low price so will hold onto the house.

This seems very reasonable, good advice.

pinkshoes wrote: »

Do some research into renting, but you could get stuck in rented accomodation for a long time, eating into your deposit.

This is unnecessary scaremongering - anyone who's sold a house and moved into rented as a policy can presumably buy back at any time (excluding the unlikely case of rapid increases in house prices), AND have a good chance of having a lower offer accepted as they are in a far stronger buying position. In no way are they 'stuck' in rented accommodation. And renting in most areas is cheaper than servicing an equivalent mortgage at the moment, so the surplus plus the interest on the banked equity will mean a larger deposit.

We're following exactly this strategy - last year we sold our house and moved into a larger rented one, we're considering another move in a few months to play the catchment game, and we're watching our saving balance grow every month!

kodokan