Should I sell due to impending crash?

Woolsery

Snookie12cat said:

I'm so sick of these posts from people with their crystal balls. You should start playing the lottery because you are so certain of the future.

Oh, such anger, when all the OP seems to be saying is, "I'm worried I might be overstretched and financially vulnerable."

You and I don't have the data to know if they are, but there's no need for hostility when people suggest  a property might not be such a great investment in the next few years as it's been in the recent past.

As usual, I expect diversity of assets will be a good lifeboat in financial rough seas, so if selling one asset to buy more of others seems sensible, that's a strategy. I sold up in the last recession and bought a less valuable house in order to build personal resilience, but there was much more to it than that and I'm not the OP.

OP wasn't suggesting living in a cardboard box under a bridge, just down-sizing. The question is what to do with the funds released, which depends on their character and abilities. Only they know about that.

london21

Is this house for you to live or investment?

If you sold, where would you live, hard to time the market.

Snookie12cat

Woolsery said:

Snookie12cat said:

I'm so sick of these posts from people with their crystal balls. You should start playing the lottery because you are so certain of the future.

Oh, such anger, when all the OP seems to be saying is, "I'm worried I might be overstretched and financially vulnerable."

You and I don't have the data to know if they are, but there's no need for hostility when people suggest  a property might not be such a great investment in the next few years as it's been in the recent past.

As usual, I expect diversity of assets will be a good lifeboat in financial rough seas, so if selling one asset to buy more of others seems sensible, that's a strategy. I sold up in the last recession and bought a less valuable house in order to build personal resilience, but there was much more to it than that and I'm not the OP.

OP wasn't suggesting living in a cardboard box under a bridge, just down-sizing. The question is what to do with the funds released, which depends on their character and abilities. Only they know about that.

It's not anger or fear of being overstretched. I love my house and don't plan to move and have no problem with the payments. 
I just see post after post of people predicting the future which is just annoying.

They can ask about downsizing without having to throw in their assumptions about the terrible doom we are all apparently about to face 🤷‍♀️ 

aoleks

first, there's no crash coming, relax. inflation started going up, there are some compounded problems due to brexit/covid/ukraine/incompetent government and everyone started panicking. one thing led to another and we went from more expensive bricks to an almighty crash.

second, you own an "average" family home in London, one of the most desirable places on earth (property wise). these houses are very much crisis proof, as it's the middle class with stable jobs, solid savings and growing needs that buy them. on top of that, you have your FTBs with some family backing, so again, money! yes, your undesirable properties or those in a !!!!!! location might lose some value, but relax, you won't buy a 1950s semi detached in a London borough for peanuts, it simply won't happen.

third, you have a huge amount of equity. even an apocalyptic crash would leave you unharmed, paying less than it would cost a foreign student to rent a cupboard in a dilapidated flat on a record-low mortgage (last year December was the lowest ever, if I remember correctly). at that amount/LTV, you're probably on 0.99% for a few years, and that's on a £250k amount. you can't rent a toilet for that money, I can guarantee it!

let's assume, for one second, that you're absolutely right and a crash (whatever that means, 2008 won't happen again) is happening soon. it won't affect you and selling now to buy a flat at an inflated price that WILL be worth 30-40% less in a short amount of time is a stupid decision.

stay put, enjoy your suburban family house that's also a gold mine at the same time, overpay your mortgage if you want and count the dollars in a few years' time, when this "madness" is all over.

Tiglet2

Booge said:

Hi

i bought a house last December. I delayed a long time because I saw what happened in 2008 and was always anxious that would happen again. I always used to say the moment I did decide to buy my luck would be that we would go into another global recession and that’s what appears to be happening now.

I bought the house with £450k deposit (savings plus an inheritance) and borrowed £250k. Bought house for £700k in London borough of hillingdon

zoopla now claims it is worth £760k but obviously that’s a hypothetical value. Paid £26k in stamp duty

with an impending recession coming and possibly a 1930s style depression lasting a decade I’m thinking of selling it again and buying a 2 bed flat in similar area that I can do in cash without a mortgage

wbat I’m concerned about is significant price drops in house value/ remortgaging at higher rates/ being the only person paying it/ possible job loss and being forced to then sell the house at a huge loss. 

At the moment I’m find paying the mortgage and even if rates went up to 5% I could still pay it. But obviously if I lost my job then I couldn’t. 

Are others thinking of selling too?

Id need to act very fast though I think as the imminent collapse will come this autumn I suspect. 

Jonathan 

There is absolutely nothing in the above statement that suggests downsizing is needed or necessary.

Do you want to pay out more monies for estate agent fees, conveyancing fees, another stamp duty fee, land registry fees, man co notice fees, removal costs, mortgage early repayment fees (assuming your current mortgage deal is on a fixed deal)...... etc etc.  Leasehold flats will have ongoing service charges and ground rent - the more "facilities" there are, the higher the service charges - there may be no mortgage but there will still be these management fees.  Don't forget Section 20 Major Works Notices - these are where there are high cost renovations that need to be done and all leaseholders have to contribute, i.e. new roof, re-pointing works, replacement windows etc.  Sometimes, you may find they have a sinking fund which you pay regularly into, or otherwise you may get a bill of, say, £50,000 divided by how many flats there are in the building.

You have a lot of equity in your property and you don't envisage a 5% interest rate on your mortgage to be a problem.  If you can, why don't you overpay your mortgage so that if the "impending recession" happens, you can have some choices, i.e. reduce your monthly mortgage payments, increase the term remaining, re-mortgage, have a payment holiday etc.

Honestly, stay put and enjoy your home.  You are in a very good position to ride out whatever happens in the near future and come out the other side unscathed.

GDB2222

Snookie12cat said:

Woolsery said:

Snookie12cat said:

I'm so sick of these posts from people with their crystal balls. You should start playing the lottery because you are so certain of the future.

Oh, such anger, when all the OP seems to be saying is, "I'm worried I might be overstretched and financially vulnerable."

You and I don't have the data to know if they are, but there's no need for hostility when people suggest  a property might not be such a great investment in the next few years as it's been in the recent past.

As usual, I expect diversity of assets will be a good lifeboat in financial rough seas, so if selling one asset to buy more of others seems sensible, that's a strategy. I sold up in the last recession and bought a less valuable house in order to build personal resilience, but there was much more to it than that and I'm not the OP.

OP wasn't suggesting living in a cardboard box under a bridge, just down-sizing. The question is what to do with the funds released, which depends on their character and abilities. Only they know about that.

It's not anger or fear of being overstretched. I love my house and don't plan to move and have no problem with the payments. 
I just see post after post of people predicting the future which is just annoying.

They can ask about downsizing without having to throw in their assumptions about the terrible doom we are all apparently about to face 🤷‍♀️ 

Surely, they can’t ask about downsizing without explaining why they are thinking of doing so?

Woolsery

GDB2222 said:

Snookie12cat said:

Woolsery said:

Snookie12cat said:

I'm so sick of these posts from people with their crystal balls. You should start playing the lottery because you are so certain of the future.

Oh, such anger, when all the OP seems to be saying is, "I'm worried I might be overstretched and financially vulnerable."

You and I don't have the data to know if they are, but there's no need for hostility when people suggest  a property might not be such a great investment in the next few years as it's been in the recent past.

As usual, I expect diversity of assets will be a good lifeboat in financial rough seas, so if selling one asset to buy more of others seems sensible, that's a strategy. I sold up in the last recession and bought a less valuable house in order to build personal resilience, but there was much more to it than that and I'm not the OP.

OP wasn't suggesting living in a cardboard box under a bridge, just down-sizing. The question is what to do with the funds released, which depends on their character and abilities. Only they know about that.

It's not anger or fear of being overstretched. I love my house and don't plan to move and have no problem with the payments. 
I just see post after post of people predicting the future which is just annoying.

They can ask about downsizing without having to throw in their assumptions about the terrible doom we are all apparently about to face 🤷‍♀️ 

Surely, they can’t ask about downsizing without explaining why they are thinking of doing so?

Exactly. Some people here may feel their fear is spurious, but we all have reasons for being optimistic or pessimistic and every financial decision comes with a series of risks attached. Even the Lottery someone mentioned may be fraught with problems if one wins. I know someone who did!

penners324

Best option, sell up, stick proceeds on 0 at the roulette wheel in your nearest casino 

TBagpuss

Booge said:

Hi

i bought a house last December. I delayed a long time because I saw what happened in 2008 and was always anxious that would happen again. I always used to say the moment I did decide to buy my luck would be that we would go into another global recession and that’s what appears to be happening now.

I bought the house with £450k deposit (savings plus an inheritance) and borrowed £250k. Bought house for £700k in London borough of hillingdon

zoopla now claims it is worth £760k but obviously that’s a hypothetical value. Paid £26k in stamp duty

with an impending recession coming and possibly a 1930s style depression lasting a decade I’m thinking of selling it again and buying a 2 bed flat in similar area that I can do in cash without a mortgage

wbat I’m concerned about is significant price drops in house value/ remortgaging at higher rates/ being the only person paying it/ possible job loss and being forced to then sell the house at a huge loss. 

At the moment I’m find paying the mortgage and even if rates went up to 5% I could still pay it. But obviously if I lost my job then I couldn’t. 

Are others thinking of selling too?

Id need to act very fast though I think as the imminent collapse will come this autumn I suspect. 

Jonathan 

I wouldn't sell, in your position.

You're in a very good position as you have a lot of equity - presumably you have a fixed mortgage deal so you know what you payments will be for the next 2-5 years even iof inflation and interest rates continue to rise.

Worst case scenario, if you lost your job you could look at renting out the spare rooms to lodgers to cover the mortgage, and givne that you have a lot of equity,even if house prices fall you are extremely unlikely to go into negative equity so even if you lost your job and struggled to pay the mortgage you would b in a strong position to be able to negotiate with your lender for them to agree a payment holiodya while you marketed the house and looked for new jobs. 

Bear in mind that if there were to be a majr crash it would be unlikely to be limited to housing - so if you took moeny out and invested it elswhere you'd have just as much risk of losing it. 

I wonder whether you are feeling vulnerbale as you've gone from having lots of savings to none / lower amounts, and have a bigger morgage thn you are used to. It does take time to adjust.

IF you are worried, why not look  aat building up more of a cushion? Overpay your mortgag (what I have done in the past is to increse my mortgage payments when interest rates rise even hen I am on a fixed rate - my thinking is that I thn don't have to pay more when my fix ends, and as I am overpaying I eat away at the capital and build up an iverpayment reserve so I can use that if I need to. My mortgage allows overpayment of up to 10% of the outstanding balance and the extra has always been well below that. 

You can also focus on some form of regualr savings so you byuild up a cash reserve for emergencies, and then maybe some longer term savings in a stocks and shares ISA or similar. 

Consider getting a lodger now if having a biot of extra income you can put straight into savings would reassure you. 

If you sell, you immediately lose the money you have aid in stampduty and legal fees, the amount you'll have to spend on agents and legal costs to sell, stmap duty and fees on your new smaller purchase and any ERP on your mortgage.  That's a lot to lose on a hypothetical lossdue to a crash.

It may help to try to start thinking of the house as your home rather than an investment. 

sevenhills

penners324 said:

Best option, sell up, stick proceeds on 0 at the roulette wheel in your nearest casino 

Or pick a share that moves by 10% on a weekly basis.