should we sell up and rent?

lucre

Hi,
We are debating the following and could do with some advice.
We have been lucky enough to buy a house years ago which if we sold it now we would walk away with 300k!

As our income is fixed for the foreseeable future(one of us, 42yrs old, works in a government institution and I am incapacitated) I am thinking that if prices are due to fall we could save up to 80k by moving and renting. We go just under every month so any extra money would be a good thing.

We need to move in 2 yrs time for secondary school catchment (where houses start at 400k) so I am thinking just do it early, have cash in our pockets and wait for them to fall. To be honest the stress and upheaval of moving has to be taken into consideration but this is the only way we can make extra money.

I feel that house prices have to go down now until the first time buyers can afford to get on the ladder but I am a bit of a dreamer. What do you think?:rolleyes:

thank you.

nelly_2

4th largest economy in the world (allegedly) and people have to move house to get a decent education for their sprogs????

PasturesNew

You've given a few reasons:
- can't really afford to live as you are
- want to move anyway in 2 years' time
- if house prices drop you'll be able to buy where you want to be without increasing your mortgage

I'd say do it for the first one, that you've got no life living as you are at the moment. Doing it for the other reasons is speculative and therefore carries risks.

Personally, I'd say do it, house prices are dropping, yes you are right and will be able to move where you want to be in 2 years if you do it now.

However, the stress will be large. The waiting can be VERY stressful (watching for each market report to check you did the right thing) and could lead to arguments. Nothing is 100% assured, what if you've timed it wrong or something happens to stabilise the market. Can you ensure you will be remortgageable in future years to your current level.

It's not as black/white as sell, bank, wait, buy. Everybody's situation is different.

Do it for the right reasons, not the wrong ones. And stand by your decision without argument between yourselves, even if it turns out you chose wrongly.

lucre

nelly wrote: »

4th largest economy in the world (allegedly) and people have to move house to get a decent education for their sprogs????

I know, it feels so mad to have such equity yet to be scrabbling around for more? when we moved here our son was 18months old and schools irrelevant but now the local one has some pretty scary stories attached and the new one costs 100k to move to! it is truly crap. I am certain that if there were no private schools this mess would not be so bad.

PasturesNew

lucre wrote: »

I am certain that if there were no private schools this mess would not be so bad.

Blame the chavs, not the well-behaved citizens.

The chav social strata are growing at a faster rate than good, honest citizens.

I yearn for a world where there's no peasant behaviour. Being poor isn't something to be ashamed of. Creating, nurturing and encouraging poor and anti-social behaviour is the greatest crime against civilisation.

Even tramps living under bridges would have a nice life if there weren't bad behaviour.

Good luck whatever you choose!

beecher

I'd be wary - house prices have already fallen significantly in many areas, so I'd be unsure that 300k is a figure you could really achieve. I suppose you could put it up for sale and see.

also, if you have such a lot of equity I'm guessing that your mortgage is relatively small? Are rental costs in the area cheaper than your existing mortgage - and would you then be able to avoid going into the red each month?

If you're sure you've done your sums, then you need to way up the odds of prices coming down in the area you want to move to. It is impossible for anyone on this board to tell you the answer to that one - I think locally where I am 2 bed new builds are coming down fast, but areas with good schools will - I think - remain fairly buoyant, and certainly out of my reach. Perhaps the reality may be that with your income you simply can't afford to move to where you want to be - welcome to my world

pinkshoes

Catchment areas for a good school can make the prices quite resilient, so keep an eye on the market, and make sure prices aren't rising rather than falling. Also, if prices do drop in the catchment area, then there'll be a lot more people chasing those houses. At least if you're in rented, you'll be in a better position to move if a house comes available. I guess it depends on the area.

Could you rent in the catchment area just incase you can't buy there? At least then you'd get your kids into the chosen school!

PasturesNew

beecher wrote: »

Are rental costs in the area cheaper than your existing mortgage - and would you then be able to avoid going into the red each month?

Don't forget there is the interest on savings.

Some sums, assuming £80k mortgage and clearing £280k:

£520 - repayment mortgage on £80k at 6%
£800 - interest gained on £200k savings at 6% tax after paying basic rate tax

So there'd be about £1300 available per month.

beecher

PasturesNew wrote: »

Don't forget there is the interest on savings.

Some sums, assuming £80k mortgage and clearing £280k:

£520 - repayment mortgage on £80k at 6%
£800 - interest gained on £200k savings at 6% tax after paying basic rate tax

So there'd be about £1300 available per month.

Hadn't though of that