Tiger Woods? Posted February 4, 2009 Share Posted February 4, 2009 I have a friend who currently lives in a house valued today at £215K by local EA and has been offered free accomadation elsewhere. There's only £30K left on the mortgage. Assuming sold at valuation or let at £900pcm before fees, what would you do with a property that's no longer required with 30K left to pay? This is a difficult one. I fully expect house prices to drop significantly over the next few years and given that expectation, if the house could be sold for a decent price then he would likely do better in the long term, being able to buy an equivalent house and have money left over in a couple of years. Certainly, if someone had much less equity in a property, or this was a second property, this would be my advice. It would have been my advice in any instance at the beginning of 2007. BUT one never knows what radical measures the politicians may take, what banks may fail in the near future and so forth. Given that there is so little outstanding on the mortgage, I personally would let the property and use the proceeds to pay off the mortgage. In a few years time, your friend will own a house, and that provides some long term security and peace of mind...either as a place to live or a source of income or both (if he has enough space to rent a room). There is way too much uncertainty at the moment to take such a huge gamble with such an important asset in my opinion. If, god forbid, hyperinflation was to hit this country would you rather have a house or a pile of paper? If we end up with a long grinding deflation, he still has a house and hence security. Disclaimer: I am of course not a final expert, and none of this should be taken as anything more than a personal opinion. Quote Link to comment Share on other sites More sharing options...
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