To Sell or Not to Sell? Opinions Please..

rscott4563

Heres my situation, after returning from travelling round the world last year I've moved back into my house which is mortgage free and valued at £105,000. I want to move up the property ladder and was intending on selling up and getting a mortgage of around £140,000.

The thing is with the property market in the current state it is (seemingly unstable, people are very nervous), should I be making this move now (my house has been on the market for almost 3 months now and no offers so probably going to have to drop it to the sub £100,000 mark to spark more interest) or would it be better to wait it out and hope things settle down a bit after Xmas (possibly when the BoE reduce rates slightly?).

My worry is that if the market is about to re-adjust (prices are going to slide) should I get the best price I can get as soon as possible and then hang fire on buying a few months or wait to sell but then the prices might slide and I'll lose possibly 10-15% on the sale value?

I hope that makes sense?

Thanks

Ryan

mjdh1957

You're going to get 100 different opinions by asking but here's my take on it.

I think we're heading for a long crash like happened after the last property boom, so in real terms prices are going to be falling for a while, maybe several years.

In your position, I would sell up at a low price, bank the proceeds in a high interest account, rent somewhere and wait.

If prices fall, you could buy in a nice area for a lower price than you could today, and you have gained interest from your nestegg in the meantime.

If prices flatten out (less likely in my opinion), then you can buy at the same price as today but still have gained from the interest on your savings.

On the other hand, if we really have entered a 'new paradigm' when prices can only ever go up, up and up, then you'll find it hard to get a decent property. But I think that is cloud-cuckoo-land.

In any case, only you will know what is best for yourself. Don't base any major plans on advice received on a free Internet message board!

carolt

Have a look at the threads elsewhere - particularly the sticky at the top on discussing the possible market crash - for some reason, all discussion on this subject has been moved there (ie hidden from view so as not to upset homeowners of a nervous disposition...) but is worth checking out if you want discussion on the latest views about this possibility.

Other than that, even if prices do crash, remember that the larger place you want to buy will have gone down in value too, and so a 10% reduction, for example, of your current place is 10K, but of your 140K next property, 14K.

So it's actually to your advantage if prices reduce, if you want to move UP the ladder. The only people who stand to lose out are those at the top of the ladder or those who've overstretched themselves too much and who can't sell at a profit to repay their debt or prevent repossession.

So based on that, I'd say sell and buy somewhere bigger if you can comfortably afford it, and you want to; wait if you can't or aren't sure... Certainly, you're lucky in that at least it seems to be a good time for wait and see, as at last house prices in most areas seem to have stopped leaping ahead every time you stop to tie your shoelace....!

Chill, you've just got back from travelling, own your place mortgage free - you're doing pretty well already....

HugoSP

Why do you want to sell?

Could you sensibly improve your house to give you the house that you really want?

In any market this may seem a better option if you can spend say £20k and increase the value by say £35k. Even in the 10% drop scenario you would be making money by doing this.

We did this a few years ago with our last house. Our main complaint was that the dining room was isolated from the rest of the house and the kitchen was not family friendly. We remodelled the house to give us a new kitchen/diner, which really brought the 1980s designed house into the 21st century

We spent very little as this was by way of an insurance claim - we got flooded by a burst pipe and our base units were shot as a result. however the cost was around £4k including the new kitchen (we reused our appliances) I reckon we got around £10k added on the value of the house as a result. This was born out when we sold.

SquatNow

Normally I'de say sell-to-rent and buy after the crash, but if you own it out right I say stay.

If you want to upgrade, the difference between the value of your current house and a better house will be less after the crash.

With no mortgage, theres no risk of negative equity, so stay where you are. If you sell and the government chooses hyper-inflation your cash will be worth jack slit. )

Property for productive use (like living in) is always a good investment if you can own it outright and buy at a fair price.

The problems come when you take out a large loan for an overpriced property.

rscott4563

Thanks for you input guys, it all helps..

Regarding staying put and adding value while I wait out the current climate, I've considered this but the problem is that in my area the house is already at the top end of the scale for the type of property, the most a 3 bed terrace would get around here would be possibly £110,000-115,000 for an immaculate example and even then it would depend on whether the buy would like "my" taste in kitchen, bathroom, flooring etc etc... So if I did put money into the property to improve it so that I would want to stay, I would be unlikely to increase the value much over the amount I'd spend.

I did enquire with estate agent regarding improving the property before I placed it on the market and their opinion was that any money spent would probably improve the speed it sells and not the amount it sells for..

I think I agree with mjdh1957 & carolt in that if I do sell now (knock a bit off the price to attract a quick sale) I'll have the cash in the bank earning interest regardless of what then happens in the market and then I'll be in a much stronger position as a purchaser (cash ready) and if the prices really do tumble (even temporarily) they are likely going to affect the more expensive properties more than the cheaper ones, therefore making it a good time to move up the ladder...the only possible downside of this is if the house market rises significantly in the next 2,3,6 months while I'm out of the market (really really doesn't seem likely?) Does this all make sense??

One question to SquatNow, what do you mean by "If you sell and the government chooses hyper-inflation your cash will be worth jack slit"?

Cheers

Ryan

moneysavinmonkey

SquatNow wrote: »

Normally I'de say sell-to-rent and buy after the crash, but if you own it out right I say stay.

What happened to Sell up and Squat- I thought that was your standard advice!
:rotfl: just joking!

I agree with Squatnow - stay put and save your cash... don't worry if your house is dropping in value as the next one up is dropping more and all the time you are living rent free and building a deposit.

rscott4563

SquatNow wrote: »

With no mortgage, theres no risk of negative equity, so stay where you are. If you sell and the government chooses hyper-inflation your cash will be worth jack slit. )

Any explaination of what you mean by this and is there really a chance of it happening??

Cheers Ryan