Help needed - shall I sell my flat and buy another? 30 April 2008 at 3:20PM in House Buying, Renting & Selling 2 replies 486 views

artipuss

I own a flat with no mortgage which I rent out. I have around £20K and am considering selling that flat and buying another one worth slightly more. But a friend told me it could cost me all that £20K to sell one flat and buy another. If house prices are about to drop, is it a good idea to sell it and buy another when house prices are lower? I can't decide - I don't want to waste my nest egg and end up with no improvement. Any thoughts anybody? I'd be very grateful for any advice.

Jorgan_2

You need to factor in the fees involved in buying and selling. Estate Agent fees 1-1.5% + VAT, solicitors fees (£800-1400), HIP (£250-350), stamp duty (if applicable) nothing below £125k, 1% of the total purchase price if buying over £125k but less than £250k. Survey fees & mortgage arrangement fees could be a couple of thousand pounds. It will probably cost you £5-10k in fees to buy & sell, it maybe more than that depending on how much you are looking to spend.

If I had a crystal ball I could tell if you should selling only or selling & buying, but I don't, sorry.

chappers

personally I would say if you are renting your property ok at the moment and you intend your rental property to be a long term investment, then I would stay put as house prices in the long term will eventually come good again.

If you are going to need to release the equity in the property short to medium term then as jorgan says only a crystal ball is really going to help you, it could be a risky move that may not pay off. If you sell up and wait to buy then you will be at the mercy of the vagauries of the property and mortgage market and during these turbulent times who knows what the affect will be.
It's all about crunching the figures can you sell your current property for a decent price in the current climate , can you obtain another mortgage at the right price too.