Baby arriving, need to move. Sell at a loss/break even or rent it out?

takesonetoknowone

Hi, i'm a long time lurker, first time poster...this one's a real quandary...

dmg24

Another point to consider - would NR give you permission to rent out your property?

conradmum

It sounds like a whole host of trouble to me. You've got a huge mortgage and loan which is possibly for more than you could sell your flat for and you want to buy something bigger??

There's no guarantee you will be able to rent your flat out at all, and even if you do, the rent won't cover the mortgage. I'm pretty sure you'd have to change to a buy to let mortgage which would be an even higher interest rate, and you'd have to pay all your moving expenses. And you're considering taking out a loan to cover your additional expenses? :eek:

If you aren't careful you'll end up on the debt-free wannabe board. There is no need for you to move that I can see. You can easily make do with a baby in a one-bedroom flat for at least a year after the baby's born. My second son slept in our living room until he was 18 months. People can and do live in far more cramped conditions.

I would wait at least a year and reconsider your options. Now is a very bad time to be selling your home. You don't have to have everything now.

kunekune

How big is your bedroom? You may find that you can have the baby in the room with you for the first year without too much difficulty, in fact you will probably want to because it's less to walk in the middle of the night for a feed.

Gorgeous_George

I'd suggest selling and taking a hit.

Looking back in 5 years' time, it may seem a very wise thing to have done.

It's all about taking risk. There's more risk in keeping property than selling it - IMHO.

GG

pinkshoes

I disagree with Gorgeous George, as you're going to be buying another property at almost the same price, so he's referring to an investment rather than a home.

I can't see any reason why you can't stay until the child is at least 12 months old, as children don't really need their own rooms until their a bit older.

Personally I'd try and stay until the end of the fixed mortgage period, when you'll have more equity in your property, so it would be easier to sell should prices in your area drop further. (And thus the new property you'd want to buy should also have dropped in price).

1 bed flats are never particularly easy to sell, as they have a limited market, and can Your mortgage interest is about £700/month, so you'd need to be able to rent it for more than this... and that's if NR let you rent it out!

bluejake

I don't envy your position. Just a few things for you to consider. Your flat may be worth significantly less in the next few years. Also, the new place your are considering buying may also be worth significantly less than what you pay now in a couple of years.

If your thinking is based on house price inflation taking off again or just continuing as it has over the last 10 years then you really ought to consider what will happen if house prices are lower in five years time.

It is your decision but negative equity on one property is bad. Negative equity on two properties is very bad.

morg_monster

Yes they probably can stay in the flat til the baby is 12-18 months or so - but won't the situation be even more dire by then if prices have stagnated or fallen? Then they'll be in an even worse situation!! It isn't like they can wait 3 or 5 years before they need to move, if they don't move right now they'll have to in the next 1-2 years. Not ideal. Sorry I don't have a solution to suggest. i would say you are probably better off moving now, but I'm not sure. What are your outgoings/incomings like? Do you have an extravagant lifestyle? Will you be disciplined if you get a loan to cover moving costs? Be honest with yourself - will this one debt lead to others in the future or will you be frugal until it is paid off?

bluejake

morg_monster wrote: »

Yes they probably can stay in the flat til the baby is 12-18 months or so - but won't the situation be even more dire by then if prices have stagnated or fallen? Then they'll be in an even worse situation!! I

No if they are planning on upgrading to a larger property their situation will be better if prices fall across the board. They will need to borrow less money.

neverdespairgirl

pinkshoes wrote: »

I can't see any reason why you can't stay until the child is at least 12 months old, as children don't really need their own rooms until their a bit older.

I agree. I'm pretty sure it's advised a baby is in with his parents for the first 6 months or so at least, it lowers the risk of cot death. And much less wandering around a cold home at night to feed him!

DaisyFlower

Also remember to take into account you'll have to still meet the mortgage payments if you have a quiet rental period etc.