Sell and rent for 6 months before buying?

rachael88

Sorry if this is long.
We bought our house on my husbands salary (I was a student nurse at the time). I qualified last year and we are looking to buy a more expensive house on our combined salaries.
We took out a loan when we bought our current home to update the property and have 2 credit cards to pay (around 20k in total now). Looking at other houses selling on the street we have around 100k in equity. 
I think our best option would be to sell our current home, put some stuff in storage and rent for 6 months whilst we find (and possibly update) our next home as houses in the area we are looking go quickly. My thinking is we could pay off our debt which would put us in the best place to get another mortgage, we could take our time to find the right house and have time to do any major work before we move in (we have 2 primary school aged children). I also want to avoid the stress of being in a chain.
My husband doesn't want to waste money on renting which will cost around 1000-1200 per month and has pointed out it would mean moving twice.
What do you guys think? 

walwyn1978

Are you very familiar with the area you want to move to? 

If not, absolutely sell and rent because it allows time to research your chosen area properly. Which streets become loud at night? Which for sale houses
 have that one neighbour who everyone says is hard work? 

Secondly, it reduces the risk that your potential seller sees - you are not in a chain and therefore may well be seen as a safer bet than those who are also interested but in a chain.

Yes you will have to move twice and that is a negative but for me overall the positives outweigh that. 

Good luck with your move whichever you decide. 

knightstyle

Renting is money down the drain and prices may go up whilst you are looking. But the 'experts' say prices will fall in the short term.
So there are no crystal balls just do what you feel is best in your circumstances.

london21

rachael88 said:

Sorry if this is long.
We bought our house on my husbands salary (I was a student nurse at the time). I qualified last year and we are looking to buy a more expensive house on our combined salaries.
We took out a loan when we bought our current home to update the property and have 2 credit cards to pay (around 20k in total now). Looking at other houses selling on the street we have around 100k in equity. 
I think our best option would be to sell our current home, put some stuff in storage and rent for 6 months whilst we find (and possibly update) our next home as houses in the area we are looking go quickly. My thinking is we could pay off our debt which would put us in the best place to get another mortgage, we could take our time to find the right house and have time to do any major work before we move in (we have 2 primary school aged children). I also want to avoid the stress of being in a chain.
My husband doesn't want to waste money on renting which will cost around 1000-1200 per month and has pointed out it would mean moving twice.
What do you guys think? 

Personally, not a fan of renting if it can be avoided.
Also might be renting for longer than 6 months.

What about listing your property and at the same time try to find a suitable property.

Do what works best for you, maybe contact the EA in your area to get their advice and suggestion also.

You mentioned the area you are looking to buy in "houses in the area we are looking go quickly", does the area you are currently selling also get sold quickly?

A lot of people make chains work, can be stressful but selecting a motivated serious buyer helps.

dimbo61

Mortgage rates seem to be only going one way UP.
However clearing your mortgage and other debts will mean that debt drops off your credit file
Have moved twice from a family home to another family home with teenage kids and all your worldly goods can be very stressful.
Your husband is right that moving twice is also expensive and stressful.
As a Landlord I would want a 12 months contract because it costs money to do all the checks.
Do you have pets ? Young kids ?
If you can sell and buy as the same time it can save 

jj_43

you might find it difficult to rent for 6 months, a 12 month contract is more standard.
So spending £12k to have a less stressful move isn't a good reason, i agree with your husband

rachael88

We are familiar with the area we are moving to, I grew up not far from there. 
Our house should hopefully sell pretty quickly, other houses on the street seem to sell within a week or so depending on the price they market at. 
I admit I've not put much thought into renting terms, I might approach one of the local estate agents to get their thoughts. 
Thanks everyone. 

saajan_12

rachael88 said:

Sorry if this is long.
We bought our house on my husbands salary (I was a student nurse at the time). I qualified last year and we are looking to buy a more expensive house on our combined salaries. 
We took out a loan when we bought our current home to update the property and have 2 credit cards to pay (around 20k in total now). Looking at other houses selling on the street we have around 100k in equity. - how long to go on the mortgage fixed term, or are you out of that now? If still within, then you might have ERCs to pay if you sell. If you're out of the fixed term and want to sell / buy at the same time, might be worth remortgaging to cover the loan / credit cards? (would need to think about having to port the mortgage and pay an extra valuation. Also provided you won't get into more credit cards!) 
I think our best option would be to sell our current home, put some stuff in storage and rent for 6 months whilst we find (and possibly update) our next home as houses in the area we are looking go quickly. My thinking is we could pay off our debt which would put us in the best place to get another mortgage, - how healthy do you think your credit history is? If you're paying a good chunk of the loan / credit cards each month then that won't necessarily hinder your mortgage application, and having an existing mortgage is pretty normal. Even if you pay it off now, the historical debt will still be visible for 6 years. 
we could take our time to find the right house and have time to do any major work before we move in (we have 2 primary school aged children). - this is the main thing vs whether you can do the work while in situ. 
I also want to avoid the stress of being in a chain. - there can be stress without a chain too, the chain just exacerbates things if the transactions are moving at different speeds. For this specifically, you could start with selling & buying concurrently, and then if your sale is quicker then break the chain and rent. 
My husband doesn't want to waste money on renting which will cost around 1000-1200 per month and has pointed out it would mean moving twice.- against the 1000-1200 rent, you would save mortgage interest. Do add in the cost of an extra move. Hassle wise, a chunk of it is sorting out stuff you don't need and packing things you don't use regularly, so that won't need to be re-done in 6 months. However you will have to re pack cupboards, work stuff, kitchen, furniture etc. 

What do you guys think? 

Comments in line. Some of the things aren't perhaps as much of a factor as you think, eg 
a) in a chain - you could still have a chain below you for the sale and above you for the purchase. You could start with selling & buying concurrently, and then if the chain below you is at a different speed to that above you, then you break the chain at that point. If not, then carry on with 1 move

b) mortgage application with debts - remember the history will still be there, so them being paid off at the point of applying isn't everything. I expect lenders will look at it on the basis of your equity less loans anyway, so effectively the same as if you paid it off.  

c) Renovations - this is the main reason to break a chain, if you expect to need work that'll you can't live through. As you start viewigns, you'll see if the properties you're considering need that much work.
I guess if you sell & buy concurrently without renting in between, then can think of it as putting some of the saved rent / moving costs towards getting a hotel / storage while the worst of the works are going on. 

rachael88

We're on a standard variable mortgage at the moment, remortgaging was one of the options originally but for some reason we were looking at fixed interest mortgages and didn't consider getting another standard variable, not sure why this didn't occur to us, it might be a good option. 

Other than the current debts we're paying off, our credit history should be fine, no missed payments or anything and our income has increased by around 30k before tax in the last year. Just paying back what we took out when we were living off one income and doing work on our current house. 

Looking at houses in the area we want to move to I think we will be buying a house in a similar condition to what our current home was when we bought it. We needed a new central heating system (it had a back boiler), some work on the electrics, new windows and doors, new kitchen and bathroom. 
We're lucky enough to have my father in law who is a builder and I know the issues he is having with supplies is making everything cost more and take longer. 
I've seen a few houses over the last year in our budget that could be perfect with a few tweaks but they turn to SSTC within a week. This makes me think not having a chain below us might be an advantage.

[Deleted User]

jj_43 said:

you might find it difficult to rent for 6 months, a 12 month contract is more standard.
So spending £12k to have a less stressful move isn't a good reason, i agree with your husband

I don't fully agree, 12 months is standard but you can normally insert a 6 month break clause in my experience, and if you say it's "just in case" most estate agents accept it without comment (in fact they might even like it since shorter leases = greater letting fees for the agent!)

SandyN21

I'm glad I took a 12 month rental in a county I wanted to move to after selling my north London house...6 months in and having viewed over 35 properties...I still haven't found my 'forever' home!