Should I let my flat or wait to for my flat to sell in this slow market?

violin

Hello,

I have just registered and I am keen to get good advice.

I put my flat up for sale 3 weeks ago (160K), I know that this is not that long ago but I am eager to sell. I have lowered the price by 9K (now 151K) after doing research. I discussed with my agent that bringing the price down seems to be the way to go due to the market and they strongly agreed.

I have now found a 3 bed repossessed house that I would love to put an offer on. The property is on the market for £219,000 the outstanding debt is £170,000.

I really would like to have this house but my money is tied up in my flat. The only way I could put get a deposit is to get the equity from the flat I am trying to sell, but the market is so poor, it just does not look like it is going to sell.

A friend adviced me to let my flat and get some money out of the flat as a deposit to the house I want. I am not sure what the renting market is like right now.

What should I do? ........I just want that house..........

Can anyone please give me some good advice, it would be greatly appreciated.

poppysarah

How does your friend think you should " get some money out of your flat"?

Read through the "Oh my god I've rented out my house and now they've trashed it" threads before you decide to let out.

Ask your estate agents advice on selling it quickly. They will be the experts in your area. They may advise you to cut the price.

Save4ArainyDay

Violin

If you have enough equity in your flat you could get a Buy-to-let mortgage on it for 85% of the value and release the rest of the cash to use against the new property.
The rent achievable on your flat would need to be 1.25 x the interest on the mortgage.

Post the figures and I will give you an example

violin

Thanks Save4ArainyDay

Yes I do have enough equity. I will research what you said. Thank you.

Seeing that the selling market is not that good; does anybody know if it has effected the letting market too?

Thanks, Violin

silvercar

Letting market should be better as there a lot of people who either can't get mortgages at the moment or who are holding off buying until prices drop further.

As is always the case, it does depend on the supply of rental properties in the area.

phil_b_2

The less people who can get a mortgage and buy a house, the more of an army there will be trying to rent? thats my logic anyhow. Unless everyone has gone home to live with mum and dad.

Good rentals are getting snapped up within days around me. I think as long as your monthly rental fee is among the cheapest (most reasonable) for the property/location, you'll get someone in with no probs at all. Just need to be realistic, and make sure the rent does cover the mortgage at least.

I feel for anyone having to actually sell a flat now as the market for them is absolutely dead.

boinging_2

violin wrote: »

Thanks Save4ArainyDay

Yes I do have enough equity. I will research what you said. Thank you.

Seeing that the selling market is not that good; does anybody know if it has effected the letting market too?

Thanks, Violin

What happens when prices fall further and you go below the 85% LTV for your BTL mortgage? This is a very risky strategy.

tom_thumb_2

The market for flats has really gone dead yes. I have been trying to sell since Dec, i had a sale that fell through 3 days before exchange of contracts. This was the week of the credit crunch on the tv. Since then i have had no veiwings... its all gone teets up!

Save4ArainyDay

boinging wrote: »

What happens when prices fall further and you go below the 85% LTV for your BTL mortgage? This is a very risky strategy.

If prices are going down then wherever Violin puts the equity is going to be affected!

As long as the rent on the BTL is covered Violin can proceed with the other purchase. When things pick up as eventually they will then Violin can sell the flat or remortgage it again to get more equity out.

Midas

I think I would be very cautious about the BTL equity release strategy. You don't give us details about the flat such as where it is, and as ever these things do depend on local market conditions, but in general flats are not a great investment at the moment due to relative oversupply compared to other types of property. Do you really want to be exposed to falling house prices on two fronts over the next few years? The rental market for flats is also very competitive at the moment, again due to the fact that there are lots available. Personally I'd take the short-term hit of selling the flat for less than you had previously hoped, and sink the equity into a house, which is likely to be a better long-term investment anyway.