What would you do?

nadnad · 22 May 2006 at 4:53PM

Me and OH bought a site with outline planning permission last year for £40k.
Due to various planning restrictions brought in since then here (NI) sites have rocketed in price and our site is now valued at £200k.

At the minute we have a 87k mortgage on our present house which is valued at £130k.

We have always been of the opinion that we would build our dream house and live there for ever more. The entire project (including the site) will cost in the region of £170k of which £135k will be a mortgage.

Would you sell the site and make a profit of £160k to put towards another house (about £250) which won't have as much land, or be exactly what we want, however would keep our mortgage to £90k, or would you go ahead and build the house of your dreams even though it'll be very difficult financially for the next year (ie building new house and paying mortgage on present house), and in this case end up with a bigger mortgage.

If we take the 1st option ie sell the site I know its probably the most sensible option, however we would probably have to buy and sell a couple of houses to get to our ideal.

If we go ahead with the build we will have a property worth in the region of £350k plus, but we would never sell it - and this is what gets to me - we will have sunk a lot of money into this house but will never see a return, except of course for the enjoyment of having our perfect house.

Such a quandry. I can't make a decision although my heart pulls me to the build.

What would you do?

Joe_Bloggs · 22 May 2006 at 7:26PM

Don't do anything too hasty. Have you checked out your liability for capital gains tax ? I don't have a clue. Perhaps those on the cutting tax board know how much you are liable for if anything.
J_B.

Suzie_Wing_Wong · 22 May 2006 at 9:37PM

I would build the perfect house on that site if I were you...... live the dream and follow your heart..... you'll probably regret it if you don't.
Money isn't everything!!

nadnad · 22 May 2006 at 9:59PM

think you're right...

nearlyrich · 22 May 2006 at 10:25PM

Suzie_Wing_Wong wrote:

I would build the perfect house on that site if I were you...... live the dream and follow your heart..... you'll probably regret it if you don't.
Money isn't everything!!

Completely agree, you only regret the things you didn't do. You can't beat living in your dream house;)

halloweenqueen_2 · 23 May 2006 at 8:20AM

I'd build the house and enjoy it - if you change your mind after you've built it and sell then at least you've followed your dream! Remember for a new build you get VAT back on building it you won't with a refit on a house thats almost what you want.

comping_cat · 23 May 2006 at 10:50AM

I agree with most of the others, your dream is to build and live in your own house, so go for it. If you dont, it will always be i wish/what if, and you will never know. Life is for living your dreams, so do it while you can xxxxxx

lush_walrus · 23 May 2006 at 11:16AM

Personally, I would keep it. Although you have in theory made some money from owning the site, you didnt go into it as an investment so you hae to remember your goal. Your goal is to build your own house, if this goal changes then yes sell it, if not keep it. If you do sell it, then remember that your site is valued higher than you expected because the demand for land (of that type) is outstripping supply. So if you do sell it and decide to build in the future you may hit high priced land that stops your dream.

gallygirl · 23 May 2006 at 3:30PM

What a lovely dilemma to be faced with!

I agree with the others - you bought it to build your dream home, this way you get a dream home + a lovely extra value added bonus when eventually you do sell.

You'll always regret it if you sell. As you seem set on building your own home you'd probably spend most of the 200k on land anyway - and it wouldn't be as good as you have now.

PIPPER_2 · 23 May 2006 at 3:42PM

My parents were in this situation a good many years ago, site to build in Ire, but things got a bit bitter between family members so they bailed out and gave me the site as a wedding gift. I might well have the same dilemma as you one day!
I would go for it, At least you will have what you always wanted at the end and you won't have to stress about moving location or house hunting.
Best of luck with whatever you choose to do!:D

lynzpower · 23 May 2006 at 4:13PM

Personally, Id sell it.

Its the best return you could ever get in a changing market. From what Ive heard about NI it seems prices have gone crazy over the last few years and the prices have rocketed. If theres any jitters in the market ( interest rates poinsed to go up) Id sell it.

Im naturally cautious, but the opportunity of having somewhere in the region of 160k for free and for doing nothing would appeal to me more than having a dream house. But im not someone who craves a dream house really, i have seen my parents move and move looking for thier dream house, realises that I'd never have anything "perfect" as my dreams change so often.

What would you do?

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free