We’d like to remind Forumites to please avoid political debate on the Forum.

This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

PLEASE READ BEFORE POSTING: Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Advise needed to sell or buy to let

Hi all,

I’m in a bit of a difficult situation and would really appreciate some perspective.

The housing market is down, and we’re trying to sell our place but not getting anywhere near the value we expected. On top of that, our child’s school catchment is a big factor, and we need to sort things out before end of October which is the national dead line for secondary school applications.
To make matters harder, both my partner and I are facing job uncertainty, and there are some health concerns too, hence planning to downsizing. If something goes wrong with our health or jobs, it would be harder to keep up with the monthly mortage payments.

Not sure if it’s better to sell now at a lower price, rent out the house, or try to hold on longer. We have 3 children.

Current mortage installment -£1900
Balance mortage-£326000
Income- £4000 monthly

Has anyone else been through something like this?

Thanks so much.
«1

Comments

  • El_Torro
    El_Torro Posts: 1,945 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Can you afford to turn your property into a Buy To Let? By that I mean do you have somewhere else to live when you do this?

    Based on the limited information you have provided it seems to me that turning your current home into a BTL will only increase the riskiness of your situation going forward. I would be tempted to sell, though that will depend on how low the selling price is. 
  • neha9
    neha9 Posts: 17 Forumite
    Seventh Anniversary 10 Posts Combo Breaker
    Hi Torro,

    Thank you for your reply.
    We purchased this property in 2022 for £465k, did renovations for around £20k, paid stamp duty £13k. Total mortage payments made £56k. Selling was never part of our plan, but because of health and jobs risks, we're now having to think about it.

    Thanks.
  • Emmia
    Emmia Posts: 6,041 Forumite
    Fifth Anniversary 1,000 Posts Photogenic Name Dropper
    Do you need to move for the catchment area? i.e. your current house isn't in the right place to qualify for the school you would like your child to go to?

    If so, you'll struggle to sell, buy and move in a month.
  • neha9
    neha9 Posts: 17 Forumite
    Seventh Anniversary 10 Posts Combo Breaker
    Hi Emmia,

    We are already in the catchment. 
  • Emmia
    Emmia Posts: 6,041 Forumite
    Fifth Anniversary 1,000 Posts Photogenic Name Dropper
    edited 22 September at 6:40AM
    neha9 said:
    Hi Emmia,

    We are already in the catchment. 
    In which case, unless you're willing to drop the price substantially for a quick sale, I'd sit tight, and see how things unfold.

    If you sell or convert to a BTL, where will you live?
  • neha9
    neha9 Posts: 17 Forumite
    Seventh Anniversary 10 Posts Combo Breaker
    We’re in catchment and my child has already done the exam. Results are due next month and offers come out on March 1st.
    Our agent says the market is down and we’d only get around £480K for the house, which feels like a loss compared to what we expected. If we sell now and move within catchment, we’d be locking that in.
    But if we stay and something happens with our jobs (there’s some uncertainty) or health, we could end up really struggling financially.

    Do we sell now and cut our losses, or hang on, hope things stay stable, and wait for the school results before making a move? The school places will be offered on 1st March.
  • 1.9K mortgage payment per month, is the 4K income gross or net?

    Reference selling it, price paid, SDLT, fees, renovation costs and payments to mortgage company are of little interest to a current sale price, what price has agent said its worth or price to secure a sale and what is the current asking price?

    My initial thought is that 1.9K & 4K monthly data looks a bit heavy going.

    Just imagine renting it out and for any number of reasons the rent stop getting paid, can this risk be managed?

    Below is a link for info that maybe helpful.

    ***

    https://www.unbiased.co.uk/discover/mortgages-property/buying-a-home/what-percentage-of-your-income-should-your-mortgage-be
  • RipleyG
    RipleyG Posts: 82 Forumite
    10 Posts Name Dropper First Anniversary
    neha9 said:
    Our agent says the market is down and we’d only get around £480K for the house, which feels like a loss compared to what we expected. If we sell now and move within catchment, we’d be locking that in.
    More positively, any house you buy in the same area will also be cheaper now than when prices go up. That will also mean you'll pay a bit less stamp duty than if you wait, and presumably savings on your mortgage and other bills if you move somewhere cheaper to run.

    Given the factors involved, it seems like the priority is to de-risk your life. Letting out your home doesn't do that - in fact, given the numbers you quote it seems extremely risky. It generates income, but you'd need that income to cover agent fees, wear and tear/maintenance, pay tax on it, and then hope that whats left is enough to pay rent on wherever you move to. It's harder to sell properties with tenants in, and your tenant isn't obliged to allow property viewings. You'll need to serve notice for tenants to leave, and do so well before a predicted completion date - so could easily end up with a rent void and still have to pay the mortgage in that time. It doesn't seem you could cover the £1900 mortgage on top of your own rent, particularly if one of you lost a job due to ill health. 

    If your child has already sat the entrance exam and you're staying in catchment, moving is unlikely to be a problem. 

    I speak from experience when I say the last things you want when dealing with ill health are the stress of high bills that stretch you financially, or uncertainty about your home life. I was in a similar position to you about 4 years ago, without the ill health factor. We decided to move and I became seriously ill just a week after the move, resulting in job loss and permanent disability. I'm so glad we moved - had we not done so, the financial stress would've been enormous at an already horrendous time, and would have made a big dent in savings that have propped us up. 
  • Emmia
    Emmia Posts: 6,041 Forumite
    Fifth Anniversary 1,000 Posts Photogenic Name Dropper
    neha9 said:
    We’re in catchment and my child has already done the exam. Results are due next month and offers come out on March 1st.
    Our agent says the market is down and we’d only get around £480K for the house, which feels like a loss compared to what we expected. If we sell now and move within catchment, we’d be locking that in.
    But if we stay and something happens with our jobs (there’s some uncertainty) or health, we could end up really struggling financially.

    Do we sell now and cut our losses, or hang on, hope things stay stable, and wait for the school results before making a move? The school places will be offered on 1st March.
    There is no guarantee your child will pass the exam though. Hopefully you're still in catchment for a good alternative 
  • neha9
    neha9 Posts: 17 Forumite
    Seventh Anniversary 10 Posts Combo Breaker
    1.9K mortgage payment per month, is the 4K income gross or net?

    Reference selling it, price paid, SDLT, fees, renovation costs and payments to mortgage company are of little interest to a current sale price, what price has agent said its worth or price to secure a sale and what is the current asking price?

    My initial thought is that 1.9K & 4K monthly data looks a bit heavy going.

    Just imagine renting it out and for any number of reasons the rent stop getting paid, can this risk be managed?

    Below is a link for info that maybe helpful.

    ***

    https://www.unbiased.co.uk/discover/mortgages-property/buying-a-home/what-percentage-of-your-income-should-your-mortgage-be
    We take home about £4k a month, but with 3 kids and everything getting more expensive. Biggest strain is the mortgage and we do not want our child to loose his place just because we moved houses.
    so we’re leaning toward selling and moving somewhere cheaper. That way we could get the mortgage under £1k a month, which would take a lot of pressure off.
    Main goal is to lower stress (for health and job reasons) and still give the kids a decent lifestyle.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 351.7K Banking & Borrowing
  • 253.4K Reduce Debt & Boost Income
  • 454K Spending & Discounts
  • 244.7K Work, Benefits & Business
  • 600.2K Mortgages, Homes & Bills
  • 177.3K Life & Family
  • 258.4K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.2K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.