should i sell flat in brighton to buy in london

polyp

Help! I am getting so much conflicting advice. I own a flat in Brighton with about £80,000 equity which i rent out. I really don't make much from rental (about £150 per month) and want to buy somewhere in London where I am now renting. I really want to sell the brighton flat cause i find being a landlady a real pain. But everyone is telling me I am mad to sell my brighton flat in order to buy myself a flat in london. I am sick of renting here and want a home, but don't see how I could possibly afford to keep a flat and buy a flat, and pay 2 mortgages on my extremely low salary. I might be able to cope with being a landlady if it was financially a smart move, but if it makes no odds either way, would rather sell.

I have no financial knowledge at all and would appreciate some advice.

Reaper

I assume the people saying don't sell must be thinking of property prices and what they think they will do in Brighton v London, or they think Buy-to-let is a sure fire winner. I can't imagine otherwise why anybody would tell you not to sell.

Ignore them. They may not be right about the property market, nobody really knows what it will do in the future.

Your first priority should be where you want to live, speculating comes a distant second. Of course you should sell your Brighton flat so that you can afford the London one if you can't afford both.

If you are on a low salary you are going to need that equity from your Brighton flat if you hope to buy in London.

robnye

£150 per month for a flat..... is little low for rent

i have seen them advertised for £450 plus, for 1 single bedroom flat....

polyp

no, thats profit! The rent is £550 and after mortgage, and other flat expenses that is profit.

mkdoodle

£80,000 in a 5% savings account will yield £4,000 per year, i.e. more than £300 per month. Even after selling expenses and tax that's considerably more than the difference between your rental income and your mortgage. With property prices stabilizing I'd sell first before thinking about buying.

Bamf100

Hi Polyp,

If you could stick it out for another couple of years as you are there are some fantastic investment opportunities in Spain at the moment, which could ease your move to London financially.

I released 50k of equity from my rented UK house in August this year to buy an 'off plan' apartment on a golf resort in an up and coming area of Spain. Obviously no investment is guaranteed, but the developer I finally chose to invest with really impressed me. Lets face it to get me to spend 50k on a plot of dirt they had to!

Check out their website below and if you are interested drop me a PM and I will talk you through the process.

https://www.polarisworld.com

Regards

Kenny B

polyp

Thank you all for replying. The point for me is that I want a home in London. Sick of renting, feeling insecure, having horrible landlords and having to move around. My thought was to sell my flat in Brighton around March time, and then start looking for a flat at auction in north london. I have been told that auction flats in my area start at about £130K and that would be what I am looking for. I have a friend who buys flats at auction who could help me do this. However, even he is saying I am mad to sell my brighton flat to do this, and I should hold onto it and move the equity into buying a second flat in london. I don't understand how this works. Also, since my brighton flat has gone up in value so much (and seems far too expensive to me) should I not sell before the market crashes (if it does) and I lose all the profit anyway?

Reaper

I still fail to understand your friends logic as to why you should hold on to your existing property. Even if you could just about afford to own 2 properties that's all your eggs in one basket financially. Sounds like he wants you to remortgage your property or take out a secured loan to get hold of the equity - I say no don't do it. That leaves you highly exposed if property prices were to drop (and they haven't been doing all that well in East Sussex recently).

Unless he can come up with a cast iron good reason why you should hold on to your Brighton property you should sell it.

As for buying an off plan property in Spain - sorry Banf100 but I can't think of worse advice for a person in this situation.

Han_naH

I agree, and with Mkdoodle.

You could remortgage your Brighton flat a bit further, so the mortgage payment is £100 a month more, and this would give you a cash deposit for the London flat.
Then the Brighton flat looks after itself - the rent pays the mortgage, and you have allowed a little for interest rate rises.
Another advantage here is that a remortgage means you find a better mortgage deal.
A disadvantage is that if you have a spell "between tenants", the Brighton mortgage still needs to be paid. :-/

Having said all that, this would leave you enormously over exposed to a single investment class: property. With properties in London and Brighton, and no money is equities, deposits, bonds etc, your portfolio would be rather imbalanced!

My advice is sell Brighton, buy London (but watch prices first) and put the dosh in a good old fashioned savings account.

Fionnuala_2

Hello Polyp
I think the key to what you should do is "I am sick of renting here and want a home". That spells out to me that despite all the financial advice in the world and clever strategies with money and mortgages and rent your Brighton flat is a millstone around your neck. Life is too short! Get rid of it and get what you want. This is slightly against the ethos of this website, but if you want the simplicity of one flat to look after rather than the anxiety of two then do what makes you happy. Money in itself doesn't always buy happiness or peace of mind. You already know the answer - give yourself permission to just do it.
FTS

Bamf100

As for buying an off plan property in Spain - sorry Banf100 but  I can't think of worse advice for a person in this situation.

It's was only a suggestion Reaper, one that has made me financially sound. Incidentally I was in exactly the same position she is in about a year ago.

If you don't like your current landlord/rented flat then move? There are plenty of good rentals around and the income from your Brighton flat should cover most reasonable rent expenses.

You have been given a golden opportunity with the increase in value of your Brighton flat, just as I was. The question is do you make the most of it or just sit on it?

Whatever you decide, just remember you only live once so if you aren't happy then do something about it. Set an objective and just go for it.

Oh and just one more thing Reaper, its Bamf not Banf, attention to detail old chap