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Kurt Barlow

Should I Sell And Exchange Tangible Asset For Paper?

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Just landed a new job in the private sector. Previously had worked freelance / part time in private sector. Prior to this made redundant from Middle Level Management position in Local Govt (thank you god).

The new job is on the edge of London and too far to commute. I am therefore presented with the dilemma of either selling (and going STR) or keeping the house as a weekend base (Cambridge) and renting a room in West Herts in the week.

House worth 210-220K with a Mortgage of 55K. Mortgage repayments £250 pcm. I also have 2 lodgers who pay a total of £580 pcm. As some will be aware the house is also fitted out with wood burner , solar, mega insulation.

The question I now have is do I exchange a tangible asset such as house (in a good location) for £150-£160K of potential toilet paper?

Also - new job well paid but no pension scheme. My thoughts are to pay max into stakeholder pension so to effectively get 40% tax relief. Any advice?

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Just landed a new job in the private sector. Previously had worked freelance / part time in private sector. Prior to this made redundant from Middle Level Management position in Local Govt (thank you god).

The new job is on the edge of London and too far to commute. I am therefore presented with the dilemma of either selling (and going STR) or keeping the house as a weekend base (Cambridge) and renting a room in West Herts in the week.

House worth 210-220K with a Mortgage of 55K. Mortgage repayments £250 pcm. I also have 2 lodgers who pay a total of £580 pcm. As some will be aware the house is also fitted out with wood burner , solar, mega insulation.

The question I now have is do I exchange a tangible asset such as house (in a good location) for £150-£160K of potential toilet paper?

Also - new job well paid but no pension scheme. My thoughts are to pay max into stakeholder pension so to effectively get 40% tax relief. Any advice?

How much do you trust your lodgers to take good care of your house during the week if you were to opt for digs close to your new job?

I think that's what I'd do in your position, if I felt I could trust my lodgers not to throw wild parties or turn my place into a tip in my absences!

Your mortgage is small and more than covered by income from lodgers so why sell? Especially if you like your house and its location.

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Guest DissipatedYouthIsValuable

My advice is this.

To make good rice, add just enough water so that the distance between the top of the rice and the top of the water measures from fingertip to first joint.

Put on at maximum heat, with a lid on the saucepan.

Once boiling turn the heat down to minimum.

The rice is done once all the water has been absorbed.

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It sounds like your lodgers more than cover the mortgage and other expenses, if it's self maintainiing financially, why sell?

Roughly where in W Herts would you be considering renting, out of interest?

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How much do you trust your lodgers to take good care of your house during the week if you were to opt for digs close to your new job?

I think that's what I'd do in your position, if I felt I could trust my lodgers not to throw wild parties or turn my place into a tip in my absences!

Your mortgage is small and more than covered by income from lodgers so why sell? Especially if you like your house and its location.

Thanks

One has been there for 2.5 years. He works locally but lives in London and cant move for family reasons. As long as the room is available he is likely to continue to rent. I only charge him £260 a month but when its continous for 2.5 years on a Mon - fri basis why jeopardise the cash cow!

other lodger a friend - a bit careless and messy but not malicious. He lives to dive / go caving. El cheapo rent suits him fine. Will just need to set a few ground rules.

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It sounds like your lodgers more than cover the mortgage and other expenses, if it's self maintainiing financially, why sell?

Roughly where in W Herts would you be considering renting, out of interest?

Berko / Hemel

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Just landed a new job in the private sector. Previously had worked freelance / part time in private sector. Prior to this made redundant from Middle Level Management position in Local Govt (thank you god).

The new job is on the edge of London and too far to commute. I am therefore presented with the dilemma of either selling (and going STR) or keeping the house as a weekend base (Cambridge) and renting a room in West Herts in the week.

House worth 210-220K with a Mortgage of 55K. Mortgage repayments £250 pcm. I also have 2 lodgers who pay a total of £580 pcm. As some will be aware the house is also fitted out with wood burner , solar, mega insulation.

The question I now have is do I exchange a tangible asset such as house (in a good location) for £150-£160K of potential toilet paper?

Also - new job well paid but no pension scheme. My thoughts are to pay max into stakeholder pension so to effectively get 40% tax relief. Any advice?

Keep the house. Cambridge is a good area to be in. You will still have to pay for the room without the lodgers contribution. Rent a room is tax free as long as you dont exceed a certain amount. Cant remember what it is now. In regards to the following post i dont know if you have to inform the mortgage company about a lodger.

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I wouldn't sell. Who knows how much your STR fund would be eroded by inflation over the next few years.

If your lodgers cover the mortgage and possibly your digs nr London, then you're laughing - I've no idea how much a room would cost to rent in West Herts.

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Keep the house. Cambridge is a good area to be in. You will still have to pay for the room without the lodgers contribution. Rent a room is tax free as long as you dont exceed a certain amount. Cant remember what it is now. In regards to the following post i dont know if you have to inform the mortgage company about a lodger.

Where in cambridge is it . Some parts are better than others.

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I wouldn't sell. Who knows how much your STR fund would be eroded by inflation over the next few years.

If your lodgers cover the mortgage and possibly your digs nr London, then you're laughing - I've no idea how much a room would cost to rent in West Herts.

I agree - given the various banking busts / govt going printy printy STR is not something I relish. Not to forget my local wood sources, fruit garden, veg patch, allotment and Guerilla gardening efforts this spring :lol:

Rents for Mon - Fri quite reasonable. I am looking at a double room in Berkhamsted on Saturday for £70 a week. Hemel a bit cheaper.

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Now is not the time to sell, Rent a room for a while, if you like it keep an eye on the auctions and buy a second property in the trough and make ecofriendly, and rent out a room there too/rent your old place out!

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My advice is this.

To make good rice, add just enough water so that the distance between the top of the rice and the top of the water measures from fingertip to first joint.

Put on at maximum heat, with a lid on the saucepan.

Once boiling turn the heat down to minimum.

The rice is done once all the water has been absorbed.

Good advice. However I have an improved absorbtion method. Well I think so anyway !!

I heat up a little oil in the pan before. Then I move this all round the inside of the pan including the sides. Then I add the rice and move it around a little. Gives the rice and pan a nice really thin coating of oil. Then I add the water. I also don't add the lid until boiling point has been reached. I doubt that is too important though.

I also find this method great for timing. Once the rice is done you just take it off the heat and leave the lid on. It will sit there steaming for up to 45 minutes easy.

No more worries about timing with those oriental dishes !! Rice will always be perfect and ready to rock.

Anyway. Kurt - keep the hoose as long as you trust the lodgers. You have done enough work on it to make that worthwhile.

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Move out completely and live in Herts and get a couple more lodgers in if you can.

If the job is for the long term (you may not know that yet) then a long term permanent move seems sensible. Worth giving the new area a proper try by not returning to Cambridge every weekend.

You can decide what to do long term re accommodation later.

Just another possibility.

Cheers

I am going to keep house for at least a year. I don't want the hassle of moving whilst i am getting to grips with a new job. I will stick with 1-2 lodgers and rent a cheapo room near work. For weekends I have friends family in St Albans, Borehamwood & London to see so can live away from Cambridge at weekends.

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Village to the West-North West. Nice location - rolling Countryside!

Not in the Fens, I hope. You know, GW, rising sea levels and all that.......!

(Sorry, couldn't resist the dig!)

Digs aside, sounds like your lodgers are trustworthy enough to leave them in care of your house during the week.

You might even get a tax break - that is, if you're paying tax on income from lodgers (I'm not sure what the tax rules are.) But if you are away, then one or both could be house-sitters - an expense as opposed to an income. (I just made that up - but it sounds feasible!)

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The responses are interesting on this thread.

HPCers telling someone not to sell and not claiming market has further to fall.

Though I agree OP is in a good position, are we more scared of inflation as a collective now?

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Not in the Fens, I hope. You know, GW, rising sea levels and all that.......!

(Sorry, couldn't resist the dig!)

Digs aside, sounds like your lodgers are trustworthy enough to leave them in care of your house during the week.

You might even get a tax break - that is, if you're paying tax on income from lodgers (I'm not sure what the tax rules are.) But if you are away, then one or both could be house-sitters - an expense as opposed to an income. (I just made that up - but it sounds feasible!)

40 metres above sea level on a solid chalk cap! - with rising sea levels it could be the new white cliffs!

Tax allowance on rent a room is about £4400 per annum. One way round the tax limit is to get your lodgers to pay some of their rent in cash for a discount! B). Cash just goes in the back pocket for beer, sundries etc. Golden rule with cash is to not bank it - thats what the HMRC look for.

Edited by Kurt Barlow

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The responses are interesting on this thread.

HPCers telling someone not to sell and not claiming market has further to fall.

Though I agree OP is in a good position, are we more scared of inflation as a collective now?

My reasoning has nothing to do with either HPC or inflation and everything to do with the particular set of circumstances.

The mortgage is small and covered by income from lodgers, he likes the house and llocation, digs are easily affordable - so where is the compelling reason to sell up?

Now, if the morgage had been, say, 90%, that would have been a different matter.

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The responses are interesting on this thread.

HPCers telling someone not to sell and not claiming market has further to fall.

Though I agree OP is in a good position, are we more scared of inflation as a collective now?

I find this interesting. 2 years ago it would have been sell, sell sell.

The way I look at it now - if the house halves in value I still have a nice house, good location, all my energy saving modifications / food production.

I feel safer with this in mind than banking £150-160K in cash that could get vapourised / devalued by Govt printing presses / spent on Banksters coke and hookers.

I am now minded to clearing the mortgage which I can probably do in 5-7 years.

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The responses are interesting on this thread.

HPCers telling someone not to sell and not claiming market has further to fall.

Though I agree OP is in a good position, are we more scared of inflation as a collective now?

Well they should be. I doubt that the OP hose price has collapsed, and most of the bargain houses i see are not worth having.

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The eco-friendly solution would be a job swap with your London based lodger. He would have an easy commute from London. However, you might not be in the same line of work.

Keeping eco-friendly, you could life-swap with him. You mention that he keeps his base in London for family reasons so this solution could be affected by how you feel about his wife (and possibly kids).

Given the area you live in and how snowed in it can get, I'd press the new employer for a big 4x4 and commute daily.

p-o-p

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The eco-friendly solution would be a job swap with your London based lodger. He would have an easy commute from London. However, you might not be in the same line of work.

Keeping eco-friendly, you could life-swap with him. You mention that he keeps his base in London for family reasons so this solution could be affected by how you feel about his wife (and possibly kids).

Given the area you live in and how snowed in it can get, I'd press the new employer for a big 4x4 and commute daily.

p-o-p

Funnily enough he lives 10 minutes from where I will be working. I did suggest this as it would also have certain tax advantages - no cash changing hands.

However he said it wasn't feasible. I'm not sure he was comfortable with me spending all week with his wife and daughters :lol:

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Re tax on property with rooms rented out:

http://www.direct.gov.uk/en/MoneyTaxAndBen...come/DG_4017804

Also if it remains your only property you will be exempt from any capital gains tax. - Principal Private Exemption (although the restriction to gains on just 1 property being CGT free wouldn't apply if you were an MP! - Bastards.)

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