Selling and then renting until you find ‘the one’ ?

tim_london

Rather than paying 6 month rental at a minimum and moving twice, isn't part exchanging an option?

housemovehelp

tim_london said:

Rather than paying 6 month rental at a minimum and moving twice, isn't part exchanging an option?

That’s exactly what we tried to do . They lost patience and sold to someone else . Left us in a right mess.  Never again 

GDB2222

Davesnave said:

GDB2222 said:

Newnoel said:

Davesnave said:

Newnoel said:

Time out of the market is always risky... 6 months from now house prices could be a lot higher than today

Well, they could be, but most of us look for evidence when considering the likelihood future events and I doubt if many see a rosy picture in the year ahead!

That's not to say some kinds of houses in particular areas won't buck the general trend. Covid has so far been kind to the area where I live, but it hasn't put lots of well-paying jobs here.

You could have said the same thing in late March, and house prices are up by more than 5% in many area so far this year.
Lots of people have been burned by thinking they are clever enough to time the market

Newnoel said:

Davesnave said:

Newnoel said:

Time out of the market is always risky... 6 months from now house prices could be a lot higher than today

Well, they could be, but most of us look for evidence when considering the likelihood future events and I doubt if many see a rosy picture in the year ahead!

That's not to say some kinds of houses in particular areas won't buck the general trend. Covid has so far been kind to the area where I live, but it hasn't put lots of well-paying jobs here.

You could have said the same thing in late March, and house prices are up by more than 5% in many area so far this year.
Lots of people have been burned by thinking they are clever enough to time the market

It’s  a massive risk to climb off the property ladder and go into rented.

But there are better and worse times to do it.

When we did it, we had £400k in the bank earning 6% so we made a profit, which is no longer possible.

Prices also fell, and in  one area where we were looking, they continued to do so for some years after we bought. Here, where we live now, they recovered slowly, and where we used to live, very fast. Variables of location are disguised within the big picture.

Currently, you'd earn essentially no interest on your £400k. If you rented a £400k property for a year, the rent would be around £20k (5%). So, at the end of the year, your new property would need to be £380k for you to break even.

Obviously, you'd be quids in if prices drop more than 5% over the year. But, it only takes some weird political moves for all bets to be off. The Bank of England is clearly thinking about negative interest rates, where the banks might pay buyers to take out a mortgage, rather than the other way round. 

gwynlas

We initially moved into a house that seemed liveable but discovered a lot of botched jobs from a previous owner and without experience were taken in by a dodgy builder who later went bankrupt. We sold and just covered our costs moving into one of our rental properties then rented in an area we thought we wanted to live . The rental was ideal a converted barn but much to near the motorway and far too rural after living in London. We searched and searched eventaually returning to the village we had left. The rental was good in that it offerred a period of testing a new area, allowed us to take stuff out of storage thus saving money and allowed us to modernise current home whilst empty. 

Newnoel

GDB2222 said:

Davesnave said:

GDB2222 said:

Newnoel said:

Davesnave said:

Newnoel said:

Time out of the market is always risky... 6 months from now house prices could be a lot higher than today

Well, they could be, but most of us look for evidence when considering the likelihood future events and I doubt if many see a rosy picture in the year ahead!

That's not to say some kinds of houses in particular areas won't buck the general trend. Covid has so far been kind to the area where I live, but it hasn't put lots of well-paying jobs here.

You could have said the same thing in late March, and house prices are up by more than 5% in many area so far this year.
Lots of people have been burned by thinking they are clever enough to time the market

Newnoel said:

Davesnave said:

Newnoel said:

Time out of the market is always risky... 6 months from now house prices could be a lot higher than today

Well, they could be, but most of us look for evidence when considering the likelihood future events and I doubt if many see a rosy picture in the year ahead!

That's not to say some kinds of houses in particular areas won't buck the general trend. Covid has so far been kind to the area where I live, but it hasn't put lots of well-paying jobs here.

You could have said the same thing in late March, and house prices are up by more than 5% in many area so far this year.
Lots of people have been burned by thinking they are clever enough to time the market

It’s  a massive risk to climb off the property ladder and go into rented.

But there are better and worse times to do it.

When we did it, we had £400k in the bank earning 6% so we made a profit, which is no longer possible.

Prices also fell, and in  one area where we were looking, they continued to do so for some years after we bought. Here, where we live now, they recovered slowly, and where we used to live, very fast. Variables of location are disguised within the big picture.

Currently, you'd earn essentially no interest on your £400k. If you rented a £400k property for a year, the rent would be around £20k (5%). So, at the end of the year, your new property would need to be £380k for you to break even.

Obviously, you'd be quids in if prices drop more than 5% over the year. But, it only takes some weird political moves for all bets to be off. The Bank of England is clearly thinking about negative interest rates, where the banks might pay buyers to take out a mortgage, rather than the other way round. 

Add to that two sets of moving costs, and the foregone  capital repayments on the mortgages this Sell to Rent gamble starts to look very foolhardy

Davesnave

GDB2222 said:

Davesnave said:

GDB2222 said:

Newnoel said:

Davesnave said:

Newnoel said:

Time out of the market is always risky... 6 months from now house prices could be a lot higher than today

Well, they could be, but most of us look for evidence when considering the likelihood future events and I doubt if many see a rosy picture in the year ahead!

That's not to say some kinds of houses in particular areas won't buck the general trend. Covid has so far been kind to the area where I live, but it hasn't put lots of well-paying jobs here.

You could have said the same thing in late March, and house prices are up by more than 5% in many area so far this year.
Lots of people have been burned by thinking they are clever enough to time the market

Newnoel said:

Davesnave said:

Newnoel said:

Time out of the market is always risky... 6 months from now house prices could be a lot higher than today

Well, they could be, but most of us look for evidence when considering the likelihood future events and I doubt if many see a rosy picture in the year ahead!

That's not to say some kinds of houses in particular areas won't buck the general trend. Covid has so far been kind to the area where I live, but it hasn't put lots of well-paying jobs here.

You could have said the same thing in late March, and house prices are up by more than 5% in many area so far this year.
Lots of people have been burned by thinking they are clever enough to time the market

It’s  a massive risk to climb off the property ladder and go into rented.

But there are better and worse times to do it.

When we did it, we had £400k in the bank earning 6% so we made a profit, which is no longer possible.

Prices also fell, and in  one area where we were looking, they continued to do so for some years after we bought. Here, where we live now, they recovered slowly, and where we used to live, very fast. Variables of location are disguised within the big picture.

Currently, you'd earn essentially no interest on your £400k. If you rented a £400k property for a year, the rent would be around £20k (5%). So, at the end of the year, your new property would need to be £380k for you to break even.

Yes, agreed, I hope it didn't look as if I was denying that.

We rented because there was nothing available that we wanted to buy, not because it was a great time to sell and buy again, which it wasn't. Sometimes it's not sensible to put life on hold. If we'd had the freedom to choose the time, we'd have gone  years earlier.

badger09

Thanks for everyone's interesting take on this.

Background is we've been in same lovely house for 20 years but its now too much work for us and not everyone's cup of tea (swimming pool, fish pond, gardens, long sloping drive that needs clearing if there's any snow, semi rural etc etc). Tried to sell it 3 years ago - some interest but no offers. I call it a 'Marmite' house.

This year was totally different - end of August got 2 offers both above asking price. Originally thought of moving to completely new area, but Covid changed our minds. Found a lovely house day after we accepted offer on ours - bigger but more modern, less maintenance & easier access to necessary amenities (we're in our 70s). All going well until vendor realises they probably can't get their tenanted 'forever home' before SDLT holiday ends, so decide to stay put.

Long story shortish - we've offered them the money we would effectively have to sink in rent, storage, removal x 2 etc & they've agreed to exchange & complete as per original agreement. Effectively, everyone gets what they want., though I'm well aware it could still all go horribly wrong 

We're not gambling on prices going up or down  - we just want an easy life

Davesnave

badger09 said:

Thanks for everyone's interesting take on this.
We're not gambling on prices going up or down  - we just want an easy life

I hope you get a deal.

badger09

Davesnave said:

badger09 said:

Thanks for everyone's interesting take on this.
We're not gambling on prices going up or down  - we just want an easy life

I hope you get a deal.

Thank you. 

I usually hang out on the Savings & Investments, Budgeting & Bank Accounts, Cutting Tax and dip in and out of the Deaths & Probate boards as that's where I have experience. This board has been great for info & reassurance during what is for most of us, a very stressful, not to mention expensive process.

I'll obviously 'give back' on here if I think I can offer anything useful.
(Not that that stops some posters )

fishfingerbutties

Really pleased it's hopefully going to work out for you, badger09. Money is important and the financial impacts of course, but it's not always the only thing.

 Actually this thread has been giving me a bit of food for thought as well - similar properties to mine have been languishing a bit for a while. But all of a sudden the past few weeks lots have gone from for sale to sold - even a few that were originally on the market last year!