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Advice - Should I Sell Up?

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Hi everyone, I am new to the forum and would like peoples opinions. (apologies if this is posted twice as I am stuggling to post a new topic)

I own a 2 bed semi in Telford, and for the past 6 months I have been looking at upgrading to a 3 bedroom house but found I am priced out of the market. Rate rises mean a mortgage of 150k would cost me 1100 a month, which is rediculous. I am thinking of selling my house and moving in with the in-laws, with my wife. We have a tracker mortgage for 90k which has gone up £70 this year alone, and with rate set to rise again this year i feel we would be better off selling up and saving for 6-12 months and hope prices start to fall.

Many 3 bedroom houses in my area are not selling, they sit on the market for months. A 3 bedroom in the street I am in now is up for 195k and has not had a viewing in 3months - i think this says alot for the market for houses priced at 150k+.

Im thinking of selling the house and riding out the rate increases to enable me to save up a bigger deposit and to help save for moving costs.

My other reason for wanting to do this is as i think if i find a 3 bedroom property and i am not in a chain and have a mortgage ready i will be in s good bargaining position to buy my next house.

Thanks for reading and i welcome all opions.....

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Hi everyone, I am new to the forum and would like peoples opinions. (apologies if this is posted twice as I am stuggling to post a new topic)

I own a 2 bed semi in Telford, and for the past 6 months I have been looking at upgrading to a 3 bedroom house but found I am priced out of the market. Rate rises mean a mortgage of 150k would cost me 1100 a month, which is rediculous. I am thinking of selling my house and moving in with the in-laws, with my wife. We have a tracker mortgage for 90k which has gone up £70 this year alone, and with rate set to rise again this year i feel we would be better off selling up and saving for 6-12 months and hope prices start to fall.

Many 3 bedroom houses in my area are not selling, they sit on the market for months. A 3 bedroom in the street I am in now is up for 195k and has not had a viewing in 3months - i think this says alot for the market for houses priced at 150k+.

Im thinking of selling the house and riding out the rate increases to enable me to save up a bigger deposit and to help save for moving costs.

My other reason for wanting to do this is as i think if i find a 3 bedroom property and i am not in a chain and have a mortgage ready i will be in s good bargaining position to buy my next house.

Thanks for reading and i welcome all opions.....

How much is your house worth?

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You could sell, giving you coveted ‘cash buyer’ status. So long as you invest your money wisely in the mean time (spread it around, make it work hard as possible), you should be relatively safe. Those who STR’d in 04/05 did so in a market that was still growing strongly and, with hindsight, could have been better off waiting.

This is not so true of now though, as the market is winding down rapidly, with many expect further rate rises and a step-change in the credit industry. Your cash, if properly protected, could give you a strong position if you want to buy back in when people are desperate to sell and potential buyers are struggling to get a mortgage.

Just my $0.02 (Or £0.01 at the time of writing…)

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You could sell, giving you coveted ‘cash buyer’ status.

Exactly 'cash buyer' status could be worth 2-4k off the next property I purchase.

The only danger I see is sustained high rates (say 6-7% for 2+years) meaning a mortgage of 150k is just unrealistic.

I know nothing about investing money so I plan to just put the equatity from the sale of my property in a savings account.

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Hi everyone, I am new to the forum and would like peoples opinions. (apologies if this is posted twice as I am stuggling to post a new topic)

I own a 2 bed semi in Telford, and for the past 6 months I have been looking at upgrading to a 3 bedroom house but found I am priced out of the market. Rate rises mean a mortgage of 150k would cost me 1100 a month, which is rediculous. I am thinking of selling my house and moving in with the in-laws, with my wife. We have a tracker mortgage for 90k which has gone up £70 this year alone, and with rate set to rise again this year i feel we would be better off selling up and saving for 6-12 months and hope prices start to fall.

Many 3 bedroom houses in my area are not selling, they sit on the market for months. A 3 bedroom in the street I am in now is up for 195k and has not had a viewing in 3months - i think this says alot for the market for houses priced at 150k+.

Im thinking of selling the house and riding out the rate increases to enable me to save up a bigger deposit and to help save for moving costs.

My other reason for wanting to do this is as i think if i find a 3 bedroom property and i am not in a chain and have a mortgage ready i will be in s good bargaining position to buy my next house.

Thanks for reading and i welcome all opions.....

Assuming you are covered for a few more rate rises I personally would sit tight where you are. The hassle and associated moving costs/fees would be my main reason not to move. You have a fair gap before negative equity could be an issue, and unless you are desperate for that third bedroom I am not sure it would be worth it.

There is no guarantee that prices will fall (we all know that they should) but who knows what stupid schemes will be thought up to maintain things as they are - you could quite easily end up priced out of everything.

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I STRd (sold to rent) in December as I was relocating. I am in two minds as to what to do now.

Yes if one is prepared to wait there will be bargains ahead.

The million dollar question is HOW LONG you can bear to wait.

From my reading here I realise that crashes are slow creatures. The bottom could be 10 years off, as in Japan.

I think that as long as you can cope with living with the in-laws there's no other major downside for you to selling up now. Not even the bulls here expect rapid price increases in the next couple of years. The harder question is when to buy again.

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my house is worth 125k and i paid 90k for it in 2003

so you will have 35k cash.

and you will be saving some £500 a month on your mortgage payments

and you will not have to pay council tax of some £1000

put that cash into a high interest savings account at 6.3%

put your "mortgage" payments into that account as well (since no rent as using family house)

put the "council tax) there too as council tax is fixed and not dependant on no of people living in property

doing the math, at the end of 12month you will have

£44,376.34 in your savings account (this assumes rates stay the same for 12months, if they go higher, you will have more money!)

so on that info, decide if it is worth it!

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Extending is not really a possibility no, its a small semi with communal parking on the side of the house.

In regard to the costs of selling, that is one of the reasons I am thinking of selling as when we move not only will we have to pay estate agent fees etc, but stampt juty and legal costs for the property we purchase.

Also if i sell now i will avoid the pointless HIP

I am one of those people who can only see house prices falling, they have to, they have reached a point where they can not go any higher.

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Extending is not really a possibility no, its a small semi with communal parking on the side of the house.

In regard to the costs of selling, that is one of the reasons I am thinking of selling as when we move not only will we have to pay estate agent fees etc, but stampt juty and legal costs for the property we purchase.

Also if i sell now i will avoid the pointless HIP

I am one of those people who can only see house prices falling, they have to, they have reached a point where they can not go any higher.

to be honest, if the in-laws have the space.

i would sell if i where in your situation

as you either have zero rent to pay and can save that over the course of the year! plus other bills are saved

or if your going to contribute then again the contributions will be far less than what you would normally pay, so it is win win

edit:

if you live with the in-laws for 2 years, you will have 54,280 in the bank (assuming you save 500 a month instead of mortgage payments and save the council tax too) (also assumes rates will stay at 5.75, if they go higher you will have more in the bank) (doesn’t even take into account other saves due to sharing a house)

if by then your 125k house drops in value by 20%. it will cost 100k. you will not pay stamp duty on that. and you will have 54.28k in the bank. only requiring a 45k mortgage!

Edited by cells

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Extending is not really a possibility no, its a small semi with communal parking on the side of the house.

In regard to the costs of selling, that is one of the reasons I am thinking of selling as when we move not only will we have to pay estate agent fees etc, but stampt juty and legal costs for the property we purchase.

Also if i sell now i will avoid the pointless HIP

I am one of those people who can only see house prices falling, they have to, they have reached a point where they can not go any higher.

You only pay Stamp duty when you buy. You could always sell the house without an estate agent.

If I moved in with my inlaws I would set a time limit and then move into rental.

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doing the math, at the end of 12month you will have

£44,376.34 in your savings account (this assumes rates stay the same for 12months, if they go higher, you will have more money!)

so on that info, decide if it is worth it!

If prices continue to increase at the same pace as the last 3 years my property will increase at 10k also, thats the gamble. I am gambling on the fact that prices will not continue to increase at the same pace, at worst I need them to level, at best they need to come down!

Thanks alot for all the replies I have had, iv spent weeks thinking about what to do everytime I make my mind up to sell, someone manages to convince me its wrong and the market will contine to rise and I will end up buying my house back for 10k more than I sold it for in 12 months time.

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If prices continue to increase at the same pace as the last 3 years my property will increase at 10k also, thats the gamble. I am gambling on the fact that prices will not continue to increase at the same pace, at worst I need them to level, at best they need to come down!

Thanks alot for all the replies I have had, iv spent weeks thinking about what to do everytime I make my mind up to sell, someone manages to convince me its wrong and the market will contine to rise and I will end up buying my house back for 10k more than I sold it for in 12 months time.

i don’t think there is anyone in the county who thinks prices will continue to rise 10% every year for ever, that is a definite impossibility

to further hit home, prices in the US are crashing, prices in Spain are crashing, and there are no signs that they are even near the bottom yet

my only concerns would be.

do you get along well with the in-laws

is the house large enough to take the extra people in

if both are yes, i would definitely sell

(and note, markets seem to be predicting a 6.25% base rate by the end of the year. so your tracker mortgage will be even higher!!!)

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Extending is not really a possibility no, its a small semi with communal parking on the side of the house.

In regard to the costs of selling, that is one of the reasons I am thinking of selling as when we move not only will we have to pay estate agent fees etc, but stampt juty and legal costs for the property we purchase.

Also if i sell now i will avoid the pointless HIP

I am one of those people who can only see house prices falling, they have to, they have reached a point where they can not go any higher.

If house prices are about to fall then selling to rent is the logical thing to do. If you're able to move in with in-laws then financially that's even better for you, although I'm not sure that sharing a house with the parents-in-law is necessarily a good idea.

I'd sell if I was in your situation since I believe the market is set to fall.

However, there's no guarantee that it will fall so in the event that prices keep rising you could lose out. That's the risk you will have to take.

Once you have the equity out of your current house as money in the bank, higher interest rates work in your favour. Also, if the market subsequently falls then the 'next step' house that you want will likely drop quite a bit in price, leaving you with less money to borrow in order to get it. So it's win-win, your deposit will grow and the total needed to buy the house will shrink. You may have to pay high rates in the short term but the interest rates will vary by quite a bit over the 20-30 years of a mortgage anyway so I wouldn't be put off by a high headline rate at time of taking the mortgage out.

Of course, that all depends on rising interest rates and house price falls actually happening. There are a lot of vested interests out there making a lot of noise aimed at keeping the market high and preventing IR rises. I have twice thought that the market would collapse (around 2000/2001 and 2004/2005) but it didn't happen.

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You only pay Stamp duty when you buy. You could always sell the house without an estate agent.

If I moved in with my inlaws I would set a time limit and then move into rental.

I think 12 months would be my absolute limit, tbh i think after 6 months i would seriously think about renting a one bedroom flat.

Between my wife and I, we could save about £1300 a month, so thats nearly 8k we could save, giving us the best part of 40k deposit in spring next year ready to put down as a deposit for our next house.

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If prices continue to increase at the same pace as the last 3 years my property will increase at 10k also, thats the gamble. I am gambling on the fact that prices will not continue to increase at the same pace, at worst I need them to level, at best they need to come down!

Thanks alot for all the replies I have had, iv spent weeks thinking about what to do everytime I make my mind up to sell, someone manages to convince me its wrong and the market will contine to rise and I will end up buying my house back for 10k more than I sold it for in 12 months time.

Whatever you do, sit tight or sell you are gambling on what the market will do. Traditionally people have not sold and gambled that price decreases will not happen. People that do/don't will have a market effect.

I STR in 2006, maybe a fraction too early, but I got a good rate and have not seen any other change hands for more. Given the Interest, Savings e.t.c. you can make in that time, I am clearly better off now, however it is not going to be the same for everyone. The market may or may not drop, I think it will, certainly in real terms.

In both my situation and your situation there is one important parrallel, which is that you do want to move. I believe this is the key factor in deciding to STR if you believe in market drops. STR when you are happy where you are and have no reason to move is not in my opinion a good move when you take into account all the costs, however when you move you are going to have those costs anyway so they cease to be such an issue.

I would get your house valued. Wack it on the market for 10K more, snap the first persons hand off. Mine was valued at 90,000. I put it on at 105K and got 100 for it. Maybe its too late in the cycle for that? I don't know, one thing is for certain, if your don't try and find a sucker, you won't!

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I think 12 months would be my absolute limit, tbh i think after 6 months i would seriously think about renting a one bedroom flat.

Between my wife and I, we could save about £1300 a month, so thats nearly 8k we could save, giving us the best part of 40k deposit in spring next year ready to put down as a deposit for our next house.

if you live with the inlaws for 12months, saving 1300 a month

you would have 53.35k in the bank!

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I think 12 months would be my absolute limit, tbh i think after 6 months i would seriously think about renting a one bedroom flat.

Between my wife and I, we could save about £1300 a month, so thats nearly 8k we could save, giving us the best part of 40k deposit in spring next year ready to put down as a deposit for our next house.

Someone on here will probably correct me if I am wrong, but Summer is a good time to sell and winter a good time to buy (just because people like to move in summer generally). So why not sell now and plan to buy again winter '08.

I don't think it matters as long as you have a plan. If the market is crashing by then, you can always wait till it bottoms and your in-laws will see the value in that and will understand.

While you are contributing to staying there, just buy them the odd extra bit and bottle every now and again and they just won't get fed up with you!

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Summer is definitely the time to sell, especially when, like in my house you dont have central heating :-)

I am having my house valued tonight, and will hopefully have my house on the market early next week. I will see how many viewings/offers I get before deciding.

At the moment I am 90% certain I will sell up and wait for the crash

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I'd sell if I was in your situation since I believe the market is set to fall.

I am in much the same position as yourself. Paid of my mortgage and want to move somewhere bigger. The str thing is an option for me but it would have to be based on more than opinion. I want to see more evidence of a downturn than 10% and accelerating annual growth. Probably higher than that where I live in Scotlandshire.

Edited by gordonbrown

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Riding out the interest rate rises?

So you plan to live with the inlaws for around 10 years?

For me, if someone offered me 2k per month, wild horses would not drive me to live with the inlaws.

My advice, if you value your marriage, soldier on with what you have and continue to build your future today, nobody knows what is going to happen tommorow with any degree of certaintly, but even three years with the inlaws will most likely leave you single and looking for a bachelors flat when the market finally does go.

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Take account that there are many people on these *HPC sites who have STR and believe their big gamble will pay off by pursuading others to do the same. Are they really the one's whose advice you want?

Much of your post above is reasonable, Eurobull.

But not this paragraph.

I STR'd due to relocation. Do you really believe that I think that persuading a handful of HPC.co.uk readers to STR will crash the market to my ultimate benefit?

I wish!

:lol:

edit: for grammar

Edited by Selling up

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If your going to sell, sell for as much as possible.... when you buy back in look for a struggling seller, and buy well below the market value...

That's about the best advice you will get if your only planning on staying out of the market for a short amount of time. Despite Telford seeing little (if any) HPI at the moment it's going to be a long wait until we travel from peak to trough - a bit like going round the Wrekin! ;) . You would have to stay out of the market at least two years for it to be worth the hassle and then being realistic another two years before the real bargains are available. If the mortgage payments are a struggle then that's a totally different matter!

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