Jump to content
House Price Crash Forum
Sign in to follow this  
the gardener

What To Do? Advice Needed.

Recommended Posts

I have a friend (yes really) who needs help making a decision.

She currently owns (with a mortgage) a 3 bed semi in a reasonable part of town but is wanting to move to a nicer area within the catchment area of a good infant and junior school. She has the house on the market and has received an offer of £15k below asking (asking price is £230k). She paid £225k for the house in summer 2007.

As she and partner have a good income (joint income is approx £125k) she is thinking that maybe she should keep hold of the existing house as she doesn't want to sell at a loss. They've overpaid their mortgage quite a bit in the last 4 years (originally borrowed £195k and have £155k outstanding) so have lots of equity. They could rent their place for about £950pcm so this would cover the existing mortgage and then they could rent a place in their desired new location.

Given that houseprices are falling she is unsure as to whether:

1) to keep hold of their house and rent somewhere new (avoiding selling at a loss)

2) sell it and buy in the new location (swallow the loss and negotiate a lower price on their purchase) - This is her preferred option at the moment.

3) sell up and rent in new location

The problem is that renting is very expensive in this area and there are very few suitable properties available.

Any advice for her?

Share this post


Link to post
Share on other sites

I have a friend (yes really) who needs help making a decision.

She currently owns (with a mortgage) a 3 bed semi in a reasonable part of town but is wanting to move to a nicer area within the catchment area of a good infant and junior school. She has the house on the market and has received an offer of £15k below asking (asking price is £230k). She paid £225k for the house in summer 2007.

As she and partner have a good income (joint income is approx £125k) she is thinking that maybe she should keep hold of the existing house as she doesn't want to sell at a loss. They've overpaid their mortgage quite a bit in the last 4 years (originally borrowed £195k and have £155k outstanding) so have lots of equity. They could rent their place for about £950pcm so this would cover the existing mortgage and then they could rent a place in their desired new location.

Given that houseprices are falling she is unsure as to whether:

1) to keep hold of their house and rent somewhere new (avoiding selling at a loss)

2) sell it and buy in the new location (swallow the loss and negotiate a lower price on their purchase) - This is her preferred option at the moment.

3) sell up and rent in new location

The problem is that renting is very expensive in this area and there are very few suitable properties available.

Any advice for her?

You can't butter both sides of your bread.

Share this post


Link to post
Share on other sites

You can't butter both sides of your bread.

No 2....and see that the people who they buy their house from does the same to the house they buy..... the buyers working together with the sellers can and will force the prices down....win win....less debt = more for your money. ;)

Share this post


Link to post
Share on other sites

For me it largely depends on how many years until the kid(s) would start at the primary school she has her eye on.

If it's next school year, i.e. this September, then surely the only option in the time is renting?

If it is not until 2012 then she has one and half ish selling periods (late summer, spring, next summer) to sell their house. Assuming they can find somewhere they want to stay for 10 years+ I would take the hit. On those salaries and that timescale the loss is neither here nor there. Don't keep it to rent - you want to spend time with your kids, not looking after the demands of tenants. But a BTL if/when they go to Uni if you want to get back into it later.

If there is nowhere to buy then it's a bit of a moot question?

Share this post


Link to post
Share on other sites

I have a friend (yes really) who needs help making a decision.

She currently owns (with a mortgage) a 3 bed semi in a reasonable part of town but is wanting to move to a nicer area within the catchment area of a good infant and junior school. She has the house on the market and has received an offer of £15k below asking (asking price is £230k). She paid £225k for the house in summer 2007.

As she and partner have a good income (joint income is approx £125k) she is thinking that maybe she should keep hold of the existing house as she doesn't want to sell at a loss. They've overpaid their mortgage quite a bit in the last 4 years (originally borrowed £195k and have £155k outstanding) so have lots of equity. They could rent their place for about £950pcm so this would cover the existing mortgage and then they could rent a place in their desired new location.

Given that houseprices are falling she is unsure as to whether:

1) to keep hold of their house and rent somewhere new (avoiding selling at a loss)

2) sell it and buy in the new location (swallow the loss and negotiate a lower price on their purchase) - This is her preferred option at the moment.

3) sell up and rent in new location

The problem is that renting is very expensive in this area and there are very few suitable properties available.

Any advice for her?

I would go for the second option. If you want to trade up then a falling market is a good thing provided you can find a property to buy that has been reduced by a similar percentage (I'm amazed at how many people don't get this) Selling "at a loss" is neither here nor there - you sell at the current market value and you buy at the current market value.

Share this post


Link to post
Share on other sites

I have a friend (yes really) who needs help making a decision.

She currently owns (with a mortgage) a 3 bed semi in a reasonable part of town but is wanting to move to a nicer area within the catchment area of a good infant and junior school. She has the house on the market and has received an offer of £15k below asking (asking price is £230k). She paid £225k for the house in summer 2007.

As she and partner have a good income (joint income is approx £125k) she is thinking that maybe she should keep hold of the existing house as she doesn't want to sell at a loss. They've overpaid their mortgage quite a bit in the last 4 years (originally borrowed £195k and have £155k outstanding) so have lots of equity. They could rent their place for about £950pcm so this would cover the existing mortgage and then they could rent a place in their desired new location.

Given that houseprices are falling she is unsure as to whether:

1) to keep hold of their house and rent somewhere new (avoiding selling at a loss)

2) sell it and buy in the new location (swallow the loss and negotiate a lower price on their purchase) - This is her preferred option at the moment.

3) sell up and rent in new location

The problem is that renting is very expensive in this area and there are very few suitable properties available.

Any advice for her?

2 or 3, there's no harm renting for a while in order to find the place they want after they've sold.

Why so many people consider 1 is beyond me, they must be mental if they are entertaining the idea. Voids, repairs, undesirables etc etc. The risks are massive. If they cannot pay both houses out of existing funds, as they will have to do in void periods etc, get rid. Tell 'em to bite the hand off the person who offered. £10k loss on a house bought at peak? Do they realise how lucky they are to find a mug willing to pay that much?

Edited by cheeznbreed

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.