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Thinking about this last night - much as I fully believe that the price craziness cannot continue, if I owned a house now, would I have enough belief in my opinion that I would STR?

I honestly don't know if I would - it would be much braver to leave the 'market' than to decide not to join it. I guess the status quo is often more attractive than any other option.

Many here want a crash / large correction so that they can move up the ladder - surely if that is the plan then STR is the obvious course of action - or am I missing something?

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Erm, no.

There will be some owners who are leveraged to the hilt and living on a knife-edge month by month, perhaps they should STR, but for people who have owned for more than a couple of years and who have a bit of equity in their property the hassle and risks involved are far too great.

And I say this as someone who lives alone. Factor a family, schools, a house load of possessions etc into the mix and STRing for the chance of possibly making a few grand if indeed you are right this time seems crazy.

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Anyone from London with Half a brain would have sold and rented last year

Why?.......with interest rates so low atm they should be trying to reduce the term of their debt......repaying mortgage debt is another form of saving. ;)

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Anyone from London with Half a brain would have sold and rented last year

Not at london rent levels, the best option would be to move out to somewhere cheaper. Not really sure why any normal working person who has been gifted 1/2 mill or more equity would stay there when there are places in the world you could retire and live the high life for that kind of money.

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Not at london rent levels, the best option would be to move out to somewhere cheaper. Not really sure why any normal working person who has been gifted 1/2 mill or more equity would stay there when there are places in the world you could retire and live the high life for that kind of money.

Where?

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Why?.......with interest rates so low atm they should be trying to reduce the term of their debt......repaying mortgage debt is another form of saving. ;)

Depends if you think a 60% collapse is possible or not.

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Not at london rent levels, the best option would be to move out to somewhere cheaper. Not really sure why any normal working person who has been gifted 1/2 mill or more equity would stay there when there are places in the world you could retire and live the high life for that kind of money.

Rent/Interest ( savings or mortgage ) , same difference.

Capital maintained while the collapse happens....priceless.

£1M properties in London have seen a 6% drop, did they not?, which cost anyone buying 18 months ago a cool/scary £100K+

Those £1M properties are actually 2 bed flats in s**t areas.

Who would you hold onto that !!!!

Sell.

Sell now.

Bank the cash.

Leave the country.

Sit back and relax, safe in the knowledge some idiot will work 30 years+ just to pay off their debts.

Life's not fair, get used to it.

Edited by TheCountOfNowhere

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Depends if you think a 60% collapse is possible or not.

Not really.....the equity doesn't come into it....only the debt matters when living in it with it...... ;)

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No, but if I owned in London it'd be mighty tempting to sell up, move away and buy somewhere with less mental prices, assuming life allowed for it.

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Unless I had, for whatever reason, taken on more debt than I could comfortably afford under most likely scenarios, I would not STR. A primary house/flat is somewhere to live and should not be looked at in the same way as other investments.

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I guess an additional question, which may affect what happens over the next 12 months, is if you were going to move anyway for whatever good reason, would you buy again immediately? In those circumstances I can 100% say that I would sell and then rent to see what happens. If this becomes a common decision it will remove another whole tranche of buyers from the market.

Or would you hold on to the current property as 'your pension' for the capital gains as has been so common. I only takes a few to catch a cold on this decision to change opinion and flood the market with sellers but cause a drought of buyers.

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Unless I had, for whatever reason, taken on more debt than I could comfortably afford under most likely scenarios, I would not STR. A primary house/flat is somewhere to live and should not be looked at in the same way as other investments.

...unless any fall fell below the debt outstanding.....then like many did last time the keys were returned to lender, but that would not be sell to rent, it would be no longer renting from the lender. ;)

.......

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...unless any fall fell below the debt outstanding.....then like many did last time the keys were returned to lender, but that would not be sell to rent, it would be no longer renting from the lender. ;)

.......

That's not a great strategy (in the UK at least). Many people at the end of the 80s boom thought they could do that due to having been required to buy mortgage indemnity insurance. What they found was that the insurance covered the mortgage lender not them, many were chased for decades for their outstanding debt...

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STR'd in Oct 2014 in SE. Still got the £s. Left shite job in Sept 2015. Moved to the country. Invested in training. Earning potential and family time increased.

Freedom.

Life is great.

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That's not a great strategy (in the UK at least). Many people at the end of the 80s boom thought they could do that due to having been required to buy mortgage indemnity insurance. What they found was that the insurance covered the mortgage lender not them, many were chased for decades for their outstanding debt...

True......but many never paid anything back, after so many years the debt was I believe was not chased and written off........high interest rates and debt along with negative equity, many then were both repossessed and skint.....there were still plenty of social housing to go around then, often finding they had more disposable income overnight. ;)

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Problem with STR in London is that your capital (assume no mortgage) will generate say 2% and the rent will be 4% (of the capital value, assuming you rent the same as you sold) plus you will need another 5 to 7 % to buy back the same property due to SDLT and fees. So after a year you need a 10% fall to break even with 2% falls per year to hold your position.

And if prices collapse 30/40/50/60 %

Life's a gamble.

Puck your gamble based on instinct, facts and probability.

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If I had the fortune of benefiting from London HPI, I'd like to think I would bank now, buy outright elsewhere in the country and take a lower paid job elsewhere/wind down quicker than planned. I would think I'd won the lottery if I was sat on London property having bought 10-20 years ago. The numbers are astronomical when you consider how difficult it would be to save those amounts out of taxed income, if you don't bank it at some point then you might get a nasty shock. Greed pervades though.

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No because my repayment mortgage is £575 a month and renting a similar flat is about £900 (it's the reason I bought, cash flow decision).

The risk/reward isn't worth it even if we get say a 30% fall over 2 years. Also having been lurking on this site since 2008, and convinced every year the crash is coming, and it never materialising I would never have enough balls to commit in that way.

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No way. I would be hundreds of pounds a month worse off.

I did and I've been thousands of pounds a year better off.

Approx £150K since 2007

The people who sold the house they bought off me in 2007 lost £50k+ on the deal too.

To join in the madness when it's so obvious is, well, madness.

Now is the time to STR in London for sure, maybe even too late now. The peak profit time has gone.

.

Edited by TheCountOfNowhere

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No because my repayment mortgage is £575 a month and renting a similar flat is about £900 (it's the reason I bought, cash flow decision).

The risk/reward isn't worth it even if we get say a 30% fall over 2 years. Also having been lurking on this site since 2008, and convinced every year the crash is coming, and it never materialising I would never have enough balls to commit in that way.

Ditto, although in my case it is academic because my wife would never agree to the idea. I do like the idea of selling, banking £300K and buying a better house in 2 years for £200k but the risks are quite high

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