sell house then rent?

jammie*dodger

This thread has really caught my imagination. We are selling at the mo' (touch wood) and hope to bank about £165k in the next month or two. We had planned to plough this into our next house but we are in rented now and could stay here for a while if needs be. I'm assuming any interest earned on this would be taxable. I earn £33k per year so can anyone give me an idea given that figure and say an interest rate of 6% on the savings account(s) what the potential interest per month would be?

Cheers, Rob.

SquatNow

jammie*dodger wrote: »

This thread has really caught my imagination. We are selling at the mo' (touch wood) and hope to bank about £165k in the next month or two. We had planned to plough this into our next house but we are in rented now and could stay here for a while if needs be. I'm assuming any interest earned on this would be taxable. I earn £33k per year so can anyone give me an idea given that figure and say an interest rate of 6% on the savings account(s) what the potential interest per month would be?

The value of your savings rising is irrelevant compared to the value of the next property you are buying plummeting like a skydiving penguin on acid.

jammie*dodger

Thanks..... I think.

I think what you are saying is that given the way the market looks to be going (down) it would make sens to sit on the savings, pocket the interest to help offset any rent, then buy once the market bottoms out?

Rob.

Scabs

I STRed in December 2006 and don't regret it one little bit. Prices couldn't go up any more in my opinion without people really struggling, I am no expert just lucky I suppose (or not as we will find out in 2 or 3 years).
It is very difficult to know whether to buy or sell as everyone is different, however if I was in your position I would lower the asking price so its a little cheaper than any other similar property and hope for some interest.
This is only MY opinion but I feel reading the news daily that I have made the right one.
Good luck as people have definately forgotten the real value of money,105k is a lot of money for the average earner.

confused31_2

To be honest i think my house is well priced compared to the others in the same road there is one for 189950 another for 183000 and then theres mine priced at 169950.

The question to what i will do will all depend on when i sell, im not in a rush to sell, but if i sold next week what i would do then is save my 100000+ option at 6.5% which would give me a monthly income of about 450 pound after tax deductions.

Then i would add half of what i pay for my mortgage now 250 pound and bank the other 250 pound a month adding to my savings.

Then i would wait to see if the house prices come down but a the first sign of them going up i would jump back on the housing ladder.

On the other hand if i dont sell my house until next year and house prices have dropped 50%, it just means i will have to have a very small mortgage added to the one ive got to get a house i would have had to double my mortgage this year.

I will keep you all informed as to what i do.

confused

Davesnave

webmuppet wrote: »

We have been thinking of doing this but for a slightly different reason:

We want to sell then rent - my logic is : we would not end up in a buying chain, sell when we want at the price we want and not get panicked into selling low because we need to close the house we want to buy. After we sell and have a huge deposit in the bank, rent for less than our mortgage is at the moment and sit on the cash allowing us to house hunt at our leisure. Then while the market is stagnating be able to put in below asking offers but be able to move quickly and secure a mortgage easily (big deposit) making us a good choice for peeps that need to sell in a hurry. Also if the market does go down we get a cheaper deal but with bags of equity from our current house so we could still survive a potentially steep fall. Another bonus is we want to move out of the city to a slightly more rural location but can't decide where. This way we could rent in a potential area to evaluate it before making any kind of jump.

What does everyone think? Don't want to suggest it to the missus until I'm sure...

Not a bad idea, despite the negative posts on here, possibly by people who can't do what you propose for various reasons other than just selling-up. Of course selling now is an issue, but if you price right and have a reasonable property, you won't be in any worse position than someone who decided to STR in, say, 2005. People are still buying, just being more picky, especially in areas where there is what I'd call a 'career draw,' such as close to a large hospital or business centre. And yes, it is a nightmare for them, getting a mortgage, keeping the chain together & so on......but many still have to do it.

The 'evaluating a new area part' is also much more possible now than it was during HPI. Before, if you climbed off the ladder, you were punished when you climbed on again. It is a big change moving into a rural area, and one not everyone enjoys when they try it, so now is as good a time as any to rent and see how it works out.

Finally, you are right to say there are bargains coming which you'll be in a good position to pick up on if you STR. I've already missed two; one because I wasn't exchanged and the other because my Rightmove 'low' figure was set too high! But there will be a lot more along between now and the doom everyone's predicting.

As a a relative newbie to this board, you may not have realised that there are folk on here who think they own this recession, hence all the comments about timing and 'You're too late mate' etc. The fact is, none of us knows your personal circumstances, or whether your house will sell easily or not. It certainly isn't 'too late' where I live, nor is it your fault for not selling back in 2004 when some pundits were banging on advising that the recession was 'imminent.' They were bound to get lucky sometime!

For what it's worth, I think things are going to get really messy, probably not for a while yet, and when they do I don't want to be in any city area. Like you, I'm taking to the hills!

mitchaa

Risky gamble especially predicting 50% falls.

That means the average UK home will be worth £90k (Pigs might fly )

If this were the case, people that could afford £180k mortgages would simply buy 2 houses and BTL the other. Smaller homes will be bought for peanuts and flats will be purchased on credit cards:rolleyes:

webmuppet

Davesnave wrote: »

Not a bad idea, despite the negative posts on here, possibly by people who can't do what you propose for various reasons other than just selling-up. Of course selling now is an issue, but if you price right and have a reasonable property, you won't be in any worse position than someone who decided to STR in, say, 2005. People are still buying, just being more picky, especially in areas where there is what I'd call a 'career draw,' such as close to a large hospital or business centre. And yes, it is a nightmare for them, getting a mortgage, keeping the chain together & so on......but many still have to do it.

The 'evaluating a new area part' is also much more possible now than it was during HPI. Before, if you climbed off the ladder, you were punished when you climbed on again. It is a big change moving into a rural area, and one not everyone enjoys when they try it, so now is as good a time as any to rent and see how it works out.

Finally, you are right to say there are bargains coming which you'll be in a good position to pick up on if you STR. I've already missed two; one because I wasn't exchanged and the other because my Rightmove 'low' figure was set too high! But there will be a lot more along between now and the doom everyone's predicting.

As a a relative newbie to this board, you may not have realised that there are folk on here who think they own this recession, hence all the comments about timing and 'You're too late mate' etc. The fact is, none of us knows your personal circumstances, or whether your house will sell easily or not. It certainly isn't 'too late' where I live, nor is it your fault for not selling back in 2004 when some pundits were banging on advising that the recession was 'imminent.' They were bound to get lucky sometime!

For what it's worth, I think things are going to get really messy, probably not for a while yet, and when they do I don't want to be in any city area. Like you, I'm taking to the hills!

All pretty much sounds like what I was thinking. Truth is if my house value fell 50% I would still make a profit (technically it could fall 100%) but I assume that if my price falls 50% then the bigger house I would like would also fall 50% - so the 50% on the bigger house is more than the 50% on mine so I'd still be saving in the long run.

Think I'll ponder it some more. I would have to have some work done on the house first anyhoo.

Thanks for the advice.