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Letitbe

Should We Or Shouldn't We?

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Hi

This is my first post and I need some help and advice if I may?

My wife and myself both about 60 years old have had our own home with a mortgage for a number of years. Four years ago I had to take early retirement due to ill health but I am now fine and working again albeit part time. Upon my forced retirement because we didn't know how we were going to continue with the mortgage payments we changed over to the retired home owners plan and now just pay the interest only leaving the building society to collect on the final death of both of us. We have a property that is worth around 200k with a mortgage of 80k we have nobody to leave our home to so we now have a problem......

In years to come we will have a property that we will not be able to do things on and if something major goes wrong like the roof we will have serious problems raising the cash to repair said problems because we will still have the mortgage around our necks.

What we are considering is saying sod it selling up, paying off the mortgage and renting a bungalow. As I said we have nobody to leave it to and we could now enjoy the fruits of our labour and spend our hard earned cash on enjoying life. We can afford the rent with no problems and would have our money to enjoy ourselves with before we start to slow down too much to enjoy it. Has anyone any thoughts on this? Would we be doing the wrong thing? would landlords out there make our lives a misery? would we miss the secure lives we now have just enjoy our money? Any comments are welcome as we know nobody who has done this but we do know people in rented accomodation who say its fine out there in someone else's house.

Is there anyone out there who has done this? Did you do the right thing?

Cheers :)

Ken

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Well, my first thought is that renting tends to be more expensive than paying a mortgage....if you were going to do this I would suggest downsizing but still buying rather than renting, otherwise it is not solving your problem.

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Well, my first thought is that renting tends to be more expensive than paying a mortgage....if you were going to do this I would suggest downsizing but still buying rather than renting, otherwise it is not solving your problem.

Mr Shed,

In most parts of the country in most types of property renting is cheaper than paying the mortgage - in many cases even if you hold the cost of the property in a savings account and pay 40% tax on the interest.

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I find it difficult to believe that the majority of buy to let landlords are doing so at a loss a.j.....interest only mortgages should nearly always be cheaperthan the rental income from said property. Not saying you are wrong, just explaining my reasoning.

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I find it difficult to believe that the majority of buy to let landlords are doing so at a loss a.j.....interest only mortgages should nearly always be cheaperthan the rental income from said property. Not saying you are wrong, just explaining my reasoning.

I dont believe that the majority of BTL landlords are making a loss - on their purchase price as the average property being rented out has been held by the same landlord for several years. Different matter if you take the current market value.

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My advice would be to downsize to a happy medium where you are comfortable in your own home, yet have some surplus cash to enjoy life while you are fit and able.

The problem with long term rental is that you may not have the stability and security of tenure. As you get older do you really want to have to move home every few years or sooner?

If your ill health was to recur in later years do you really want the insecurity of a rented property to also worry about.

Move to a pleasant area with cheaper housing if you have no family ties or strong roots in a specific location.

Consider living abroad in a country with a healthier climate and cheaper living costs.

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Sell up clear your mortgage, move to a nice small town or village. Buy a "Park Home" enjoy some of your cash while you are fit and able , and put yourself down on the waiting list for a council old folks flat or sheltered housing. If you don't fancy that idea [the wife assures me she knows quite a few who are using this ploy] you can put me down alongside the Building Society as a benificiary :D

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Thanks for all your replies. We have some very serious thinking to do about this. I have spoken with others who rent and they seem to find it ok but after having our own homes for 30 years we may miss the security.

The idea of a park home is interesting and I will look into this a bit. As for putting down 'catch22' as a benificiary I have a wife who wants a cruise to think of first. ;)

Thanks everyone.

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Just do think long and hard, it is a big decision to make. Bear in mind that whilst many moons ago tenants had good security, now they really don't. And also bear in mind that if the predicted house price crash happens, many landlords may try and sell up quickly, leaving you without a home. Let us know what decision you come to.

AJ I see what you are saying, but rent is directly based upon house price.....it goes without saying that BTL landlords are still buying properties, and still making a profit on them. House prices rise, rent rises.

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AJ I see what you are saying, but rent is directly based upon house price.....it goes without saying that BTL landlords are still buying properties, and still making a profit on them. House prices rise, rent rises.

Not true. The markets are different and may move in different directions. When I moved to Reading in early 1999 the cheapest flats I could find were approx £750 per month. This was true bottom of the market stuff and you had to be able to dash straight round to view. Five years later I rented a much better flat for £650 - and prices to buy had increased significantly in the intervening years.

Rent is based on what people will pay to rent, this may impact the sales value but it is at least a tenuous link in the short term. To say 'rent is directly based upon house price' is not meaningful - the converse may have some significance.

If you don't believe me pick five towns with a large number of flats and run a few searches on Rightmove. Check out the rental yields where you can see the same type of flat in the same block. In either Reading or St Albans you'd be lucky to identify a gross yield of much over 5%. I believe the return in Northern cities is worse than this.

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Letitbe

One slightly different thought on your situation would be to sell your property but arrange to stay there for the rest of your life (or your wife's, who is statistically likely to out-live you!) at zero rent.

If you want a contact who can arrange this for you, or at least who can take you through the ins and outs of this option, just email me or give me a call on 07831-412088.

Hope this helps

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Letitbe

One slightly different thought on your situation would be to sell your property but arrange to stay there for the rest of your life (or your wife's, who is statistically likely to out-live you!) at zero rent.

If you want a contact who can arrange this for you, or at least who can take you through the ins and outs of this option, just email me or give me a call on 07831-412088.

Hope this helps

Ohh a bmv property leech.....

Edited by moosetea

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Ohh a bmv property leech.....

I wouldn't say leech, rather someone offering another solution. Obviously he is intending to make money out of it, but it sounds a great solution if the tennancy agreement is solid enough to stop it being sold from under them in any circumstance.

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On the question of cheapness I pay rent of £1200 pm on a house worth around £450,000. If I paid that for the house the interest/repayments would be at least double the rent, even if we assumed I paid half and had the rest of the money on deposuit I am still quids in.

But this does vary. I am renting a "family home" (detached, 3 beds backing onto woodland in one of the best parts of Surrey). 2 bed flats are far more lettable and thus relatively expensive.

I am told there is a rule of thumb that good btl should look at capital value:monthly rent as 100:1 or better. It makes sense. 100:1 words out at £12k pa on a place worth £100,000. There are expenses and there is a time involvement and risk. Assume zero capital growth and 12% gross makes commercial sense.

btl'ers are simply prepared to take less becuase of the capital apprecation they think is guaranteed. When the bubble bursts they will not be happy bunnies. Experienced btl'ers buy cheap and will see a crash as a good buying opportunity.

btw I have had my share of greedy landlords who hate giving up the deposit - I just wonder what it is like to live inside a body consumed by so much greed.

JOHN - www.the-planet-earth.org/fc

Edited by john8888

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On the question of cheapness I pay rent of £1200 pm on a house worth around £450,000. If I paid that for the house the interest/repayments would be at least double the rent, even if we assumed I paid half and had the rest of the money on deposuit I am still quids in.

But this does vary. I am renting a "family home" (detached, 3 beds backing onto woodland in one of the best parts of Surrey). 2 bed flats are far more lettable and thus relatively expensive.

I am told there is a rule of thumb that good btl should look at capital value:monthly rent as 100:1 or better. It makes sense. 100:1 words out at £12k pa on a place worth £100,000. There are expenses and there is a time involvement and risk. Assume zero capital growth and 12% gross makes commercial sense.

btl'ers are simply prepared to take less becuase of the capital apprecation they think is guaranteed. When the bubble bursts they will not be happy bunnies. Experienced btl'ers buy cheap and will see a crash as a good buying opportunity.

btw I have had my share of greedy landlords who hate giving up the deposit - I just wonder what it is like to live inside a body consumed by so much greed.

JOHN - www.the-planet-earth.org/fc

That last comment I couldn't agree with more.We were also on the receiving end of an incredibly greedy landlord who took money off us for all sorts of dubious reasons,even the agents were shocked & hinted loudly we could take him to the small claims court & they were acting on his behalf!!.

I think it was his way of exacting some kind of petty "revenge" on us for having the temerity to insist on having the property managed through an agent & not by him when we were negotiating the terms for rent...he could have told us to "BUZZ OFF" but took our money anyway.I think he festered over that for 6 months.Ho hum.

what I find incredible is that tennants have such little protection when it comes to getting the deposit back,the best recourse being through the small claims court at best & only if you want all the hassle that goes with it.

All I can hope is that all these petty minded individuals get their come uppance at some point.

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Moggy - I just feel that level of obsession with money must be pretty awful to live with - they can't enjoy being that way can they?

Richard

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Moggy - I just feel that level of obsession with money must be pretty awful to live with - they can't enjoy being that way can they?

Richard

It came across as seething resentment towards us "The tennants" if we dared to ask for something to be mended (eg roof leaking over electric light switch ).

It was as if we were sub-human to them....unbelievable.No sense of common decency at all.

Our neighbour (at the time) told us how foul-mouthed they were towards each other when they used to live there....plus to their children (sadly) I guess we were just lowest of the low to them!!

I am sure they must go through their lives feeling that everyone is out to rip them off so that must make them pretty miserable too (here's hoping!!)

Incidentally he was a mortgage broker!!! Does that indicate anything in his behaviour I wonder!!

Moggy

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I had exactly the same one, they had these cheap kitchen chairs and one broke - unsurprisigly.

I mentioned it to them in passing one day and they were fine, then I phoned to say it had completely broken and she freeked out - what have you done to my chair, etc. etc. Worth about £30 and we were paying around £900 pm!!

Love of money is the root of all evil!

I think these people are simply inadequate and need someone to look down on/bully so they feel thay have some value themselves.

But most landlords are fine, just a few rotten apples as in all walks of life - well maybe a slightly higher %?

Richard

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I had exactly the same one, they had these cheap kitchen chairs and one broke - unsurprisigly.

I mentioned it to them in passing one day and they were fine, then I phoned to say it had completely broken and she freeked out - what have you done to my chair, etc. etc. Worth about £30 and we were paying around £900 pm!!

Love of money is the root of all evil!

I think these people are simply inadequate and need someone to look down on/bully so they feel thay have some value themselves.

But most landlords are fine, just a few rotten apples as in all walks of life - well maybe a slightly higher %?

Richard

I agree,we never had any problems before & have rented quite a few times.

I always look after the places we rent as a matter of principal.... these particular landlords treated us with contempt.

The place was filthy when we moved in too,it was too late to do anything about it by then.

I think she fancied herself as some feudal Lady of the Manor & we were the Great Unwashed or something,grateful to be forking out £1000 per month to live there!!

We moved on as soon as poss....trouble is you just don't know what sort of landlords you may be getting until you have been living there for a while.

I gather she used to bully everyone on the street, her family & the letting agents so I guess we were easy prey to her.

What I found so shocking is the appalling way in which the law seems to be biased towards the landlord ,in particular the damage deposit return.Even though we had a proper inventory done by an independent company,they can still make an arbitrary pronouncement on what they perceive as "damage" & keep back what they want from your deposit!! Then it's up to the tennant to argue in court to get it back,if you can face all the trauma.

Nightmare over now ,we live in a house owned by someone abroad through decent letting agents so it's more of a business arrangement.

Now I wonder if they bothered to declare their earnings with the tax office....very tempting!! ;)

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I agree,we never had any problems before & have rented quite a few times.

I always look after the places we rent as a matter of principal.... these particular landlords treated us with contempt.

The place was filthy when we moved in too,it was too late to do anything about it by then.

I think she fancied herself as some feudal Lady of the Manor & we were the Great Unwashed or something,grateful to be forking out £1000 per month to live there!!

We moved on as soon as poss....trouble is you just don't know what sort of landlords you may be getting until you have been living there for a while.

I gather she used to bully everyone on the street, her family & the letting agents so I guess we were easy prey to her.

What I found so shocking is the appalling way in which the law seems to be biased towards the landlord ,in particular the damage deposit return.Even though we had a proper inventory done by an independent company,they can still make an arbitrary pronouncement on what they perceive as "damage" & keep back what they want from your deposit!! Then it's up to the tennant to argue in court to get it back,if you can face all the trauma.

Nightmare over now ,we live in a house owned by someone abroad through decent letting agents so it's more of a business arrangement.

Now I wonder if they bothered to declare their earnings with the tax office....very tempting!! ;)

OOOps just noticed I am repeating myself....I think it's old age creeping on.

Moggy :rolleyes:

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  • 339 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%



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