Advise needed to sell or buy to let

neha9

RipleyG said:

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. 

Thank you for sharing your valuable experience.
The big worry is health — my partner’s recently had high blood pressure and heart issues and I’ve had diabetes for years, so the stress is too much.

We’re thinking of selling up and buying somewhere cheaper a couple of miles out, which would cut the mortgage to under £1k and give us more breathing room. It feels like the right move to protect our health and keep life stable for the kids, especially since our son has been working hard on his exams.

The health condition of my husband was not anticipated at this time during our sons exam, as he is the main bread winner and he doesn't not want to let go of his job because of mortgage commitments. When we had our initial mortgage payment of around 1400, which was manageable given everything was covered based on his salary.

After getting advise and suggestions from this forum, the best option for us would be sell and reduce our financial stress and consider buying in catchment with less outgoings.

neha9

Emmia said:

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 

We understand that as parents, you always want the best for your children, but we also know that our health can’t take a back seat. That’s why we’re considering downsizing — to reduce stress, protect our health, and still provide stability for the kids, the future certainly looks unpredictable given the current economic situation

martindow

Another thought.  Assuming your child gets in to this school, what would happen if you subsequently move out of the catchment area?  I assume a change of address would not require you to take them out of this school.

If that is correct, you could stay put until he starts at the school and then widen your search area for moving to a new house.  Quite possibly there are areas with cheaper housing outside the school catchment that would still be easy to travel to school.

neha9

martindow said:

Another thought.  Assuming your child gets in to this school, what would happen if you subsequently move out of the catchment area?  I assume a change of address would not require you to take them out of this school.

If that is correct, you could stay put until he starts at the school and then widen your search area for moving to a new house.  Quite possibly there are areas with cheaper housing outside the school catchment that would still be easy to travel to school.

We’re not able to decide whether to wait until our child gets a school offer before moving. The problem is we won’t know until next year, and if my husband loses his job in the meantime, money could get tight. We have some emergency savings but not enough to last long.

RAS

Paying anything over one third of your income towards housing put an enormous strain on your budget, ideally you want 25%.

I appreciate that £56k+ to live in a nice house makes "renting" your current home very expensive as effectively your mortgage payments are not accruing any equity. 

Can you port your existing mortgage?

Has your husband not only seen his GP but been referred if needed? And is he complying with any recommendation? 

Talk to your potential EA about the timing of your listing, would it be better at New Year? Double check the EA's contract and tie-in period.

And maybe go over to both the DFW forum and the Old Style forum to look at ways to stretch your existing budget until you can reduce the housing costs.

_Penny_Dreadful

If you purchased the property for £465,000 and could sell it for £480,000 how would that be selling at a loss?  Unless the £20,000 you spend on renovations made the property larger e.g. adding an extension that you were never going to see that money back.  I suspect the £20,000 was really spent on decoration.

If you're worried about the size of your mortgage now then keeping the current property to let it out won't make things easier. If anything things would be worse as you'd now have two mortgages to service.  Having to pay the higher rate of SDLT/LTT/LBTT on the purchase of your new home would also use up a chunk of your equity.