Oozatden Posted March 2, 2008 Share Posted March 2, 2008 Hi, This is my first post... I've spent days reading here, but to read it all would take a lifetime, so apologies if this has already been asked. We are mortgage free, in our early 60s, self employed higher rate tax payers. Looking at the depreciating housing market, our property could be worth 20-30% less in 5 or 6 years time. Is it better to sell now, invest the money we get and rent somewhere or stay as we are? Quote Link to comment Share on other sites More sharing options...
Guest The_Oldie Posted March 2, 2008 Share Posted March 2, 2008 Having sold my mortgage free house to move area, I decided to rent and am very relaxed about my decision. I'm currently paying about half the amount in rent than the interest I would lose if I drew enough cash out of the bank to buy the house I'm renting. Of course, you must make your own decision based on your circumstances. Quote Link to comment Share on other sites More sharing options...
silver surfer Posted March 2, 2008 Share Posted March 2, 2008 Hi,This is my first post... I've spent days reading here, but to read it all would take a lifetime, so apologies if this has already been asked. We are mortgage free, in our early 60s, self employed higher rate tax payers. Looking at the depreciating housing market, our property could be worth 20-30% less in 5 or 6 years time. Is it better to sell now, invest the money we get and rent somewhere or stay as we are? Do you like your house, feel comfortable with your neighbours and the area, do you plan on staying there? If yes then it's probably pointless at this point in the property cycle trying to move out only to move back in a few years time. Think of all the moving costs, and think how far you'd have discount your current property in order to achieve a quick sale. On the other hand, if you're planning on downsizing when you retire then it may be worth advancing those plans, as long as there's a location commutable to your current employment where you could see yourself retiring to. Quote Link to comment Share on other sites More sharing options...
SarahBell Posted March 2, 2008 Share Posted March 2, 2008 Go read some of the worst bits about renting before you decide. Quote Link to comment Share on other sites More sharing options...
Sheer Heart Attack Posted March 2, 2008 Share Posted March 2, 2008 Good luck if you do sell. I put my house on the market in October 2007. Numbers of offers? None. Number of viewers? None. Even if I had had any offers, I strongly doubt it would have been anywhere near the EA's grossly optimistic valuation. Quote Link to comment Share on other sites More sharing options...
tiggerthetiger Posted March 2, 2008 Share Posted March 2, 2008 Hi,This is my first post... I've spent days reading here, but to read it all would take a lifetime, so apologies if this has already been asked. We are mortgage free, in our early 60s, self employed higher rate tax payers. Looking at the depreciating housing market, our property could be worth 20-30% less in 5 or 6 years time. Is it better to sell now, invest the money we get and rent somewhere or stay as we are? Think about your situation carefully.Put the idea of saving or making money to one side.Do you like your home and are you happy there.If you have lived there more than five years then it would be a huge upheaval to move and rent.Some of us move without batting an eyelid,others of us need a long time to settle afterwards and the older we are the longer it can take. To my mind renting from private landlords is so risky in todays environment it scared me out of selling.I had a buyer and he was keen.I backed out at the last minute.I realised I loved my home more than money.Ove the next few years many private landlords will go broke in my opinion and I wouldnt want to be renting from one of them when they do. Stay put if you are happy with your home.Its more than just a piggy bank. Quote Link to comment Share on other sites More sharing options...
Mr Nice Posted March 2, 2008 Share Posted March 2, 2008 Hi,This is my first post... I've spent days reading here, but to read it all would take a lifetime, so apologies if this has already been asked. We are mortgage free, in our early 60s, self employed higher rate tax payers. Looking at the depreciating housing market, our property could be worth 20-30% less in 5 or 6 years time. Is it better to sell now, invest the money we get and rent somewhere or stay as we are? it's really just a matter of adding up the numbers and doing a bit of research. how long do you plan to stay there, checking on what the rents are in the area/style you are looking for etc. planning for 20-30% down over the next 4-5 years isn't a bad place to start, fill in the rest, and you might be surprised how much you save just by renting for a while. Quote Link to comment Share on other sites More sharing options...
Pluto Posted March 2, 2008 Share Posted March 2, 2008 Hi,This is my first post... I've spent days reading here, but to read it all would take a lifetime, so apologies if this has already been asked. We are mortgage free, in our early 60s, self employed higher rate tax payers. Looking at the depreciating housing market, our property could be worth 20-30% less in 5 or 6 years time. Is it better to sell now, invest the money we get and rent somewhere or stay as we are? It is too late; the market is dead. Quote Link to comment Share on other sites More sharing options...
Mr Nice Posted March 2, 2008 Share Posted March 2, 2008 Think about your situation carefully.Put the idea of saving or making money to one side.Do you like your home and are you happy there.If you have lived there more than five years then it would be a huge upheaval to move and rent.Some of us move without batting an eyelid,others of us need a long time to settle afterwards and the older we are the longer it can take.To my mind renting from private landlords is so risky in todays environment it scared me out of selling.I had a buyer and he was keen.I backed out at the last minute.I realised I loved my home more than money.Ove the next few years many private landlords will go broke in my opinion and I wouldnt want to be renting from one of them when they do. Stay put if you are happy with your home.Its more than just a piggy bank. having to unexpectedly move is usually given as one of the biggest reasons for not selling to rent. but honestly if someone asked me to help them move, and were going to pay me several thousands of dollars to do so, I could do that happily. if the situation ends up that you would be saving several thousand a year. an unexpected move here or there, is more than off-set by the money imo. unless you are already wealthy enough that 25-30k over 5 years is irrelevant to you. Quote Link to comment Share on other sites More sharing options...
huw Posted March 2, 2008 Share Posted March 2, 2008 Hi,This is my first post... I've spent days reading here, but to read it all would take a lifetime, so apologies if this has already been asked. We are mortgage free, in our early 60s, self employed higher rate tax payers. Looking at the depreciating housing market, our property could be worth 20-30% less in 5 or 6 years time. Is it better to sell now, invest the money we get and rent somewhere or stay as we are? As higher-rate taxpayers presumably you will be paying 40% on any interest payments (apart from whatever you can manage to shelter). You will also have to pay rent out of taxed income. Compare your current situation, where the benefit you gain from the putative rent (what you would have to pay to rent your current place) is tax-free. Have you got pets? How much security of tenure do you need? As someone else has suggested, you need to research the downsides of renting. Also consider the transaction costs of selling and re-buying, and the headache of where to put the money where it will be safe. If I were in my 60s and already planning to downsize in a few years, then I might consider bringing my plans forward, on the grounds that cashing in equity from a house is better when prices are higher. But I certainly wouldn't turn my life upside-down just for the sake of playing the housing market. Quote Link to comment Share on other sites More sharing options...
jez123 Posted March 2, 2008 Share Posted March 2, 2008 Hi,This is my first post... I've spent days reading here, but to read it all would take a lifetime, so apologies if this has already been asked. We are mortgage free, in our early 60s, self employed higher rate tax payers. Looking at the depreciating housing market, our property could be worth 20-30% less in 5 or 6 years time. Is it better to sell now, invest the money we get and rent somewhere or stay as we are? So what you are suggesting is gambling a huge amount of money on property prices going down? Quote Link to comment Share on other sites More sharing options...
Mr Nice Posted March 2, 2008 Share Posted March 2, 2008 If I were in my 60s and already planning to downsize in a few years, then I might consider bringing my plans forward, on the grounds that cashing in equity from a house is better when prices are higher. But I certainly wouldn't turn my life upside-down just for the sake of playing the housing market. depending on his situation, the house might represent much of his savings. It would if he were the average UK citizen. now is the exact time to lock in any gains for retirement, as one of the real possibilities is that his standard of life goes way down when he sells later on. it's definitely worth at least going through the numbers and seeing how things look. Quote Link to comment Share on other sites More sharing options...
Uriah Heap Posted March 2, 2008 Share Posted March 2, 2008 Selling in a falling market is a miserable business. Unless you really need to do it I wouldn't. Quote Link to comment Share on other sites More sharing options...
gavp Posted March 2, 2008 Share Posted March 2, 2008 (edited) Hi,This is my first post... I've spent days reading here, but to read it all would take a lifetime, so apologies if this has already been asked. We are mortgage free, in our early 60s, self employed higher rate tax payers. Looking at the depreciating housing market, our property could be worth 20-30% less in 5 or 6 years time. Is it better to sell now, invest the money we get and rent somewhere or stay as we are? If you view your property as your pension or are planning to downsize in the next few years because you need to release equity from your home then it's better to act now while we're near the top of the market rather than leave it until we're near the botom. On the other hand if you don't absolutely need the money then you have to weigh up whether any extra you would make is worth all the stress, hassle and instability that comes with selling and then renting. Your house may have more value to you as a home rather than as an investment. Edited March 2, 2008 by gavp Quote Link to comment Share on other sites More sharing options...
Guest The_Oldie Posted March 2, 2008 Share Posted March 2, 2008 So what you are suggesting is gambling a huge amount of money on property prices going down? But you still have the money, gaining interest, so even if house prices were to go up ten percent this year (which I think is unlikely) you would only lose 5%ish of the value taking interest received into account. Quote Link to comment Share on other sites More sharing options...
jez123 Posted March 2, 2008 Share Posted March 2, 2008 (edited) But you still have the money, gaining interest, so even if house prices were to go up ten percent this year (which I think is unlikely) you would only lose 5%ish of the value taking interest received into account. Yes you do have the money. Imagine these scenarios: 1) Sterling gets devalued. Interest rates fall. How much is your cash worth? 2) Inflation rises, wage inflation goes into overdrive. How much is your cash worth? Economic environments don't seem to be rational beasts in my experience. There is something to be said for owning an asset such as a house outright if you live in it. Now if it was a second house.... Edited March 2, 2008 by jez123 Quote Link to comment Share on other sites More sharing options...
Guest The_Oldie Posted March 2, 2008 Share Posted March 2, 2008 Yes you do have the money. Imagine these scenarios:1) Sterling gets devalued. Interest rates fall. How much is your cash worth? 2) Inflation rises, wage inflation goes into overdrive. How much is your cash worth? Economic environments don't seem to be rational beasts in my experience. There is something to be said for owning an asset outright. Offset that against house prices falling significantly. You are correct though, inflation is a worry, which is why I currently have substantial funds in EUR. With the current volatility in the stock market and a big question mark over property, I feel safest with liquid cash at the moment. Quote Link to comment Share on other sites More sharing options...
Guest barebear Posted March 2, 2008 Share Posted March 2, 2008 Hi,This is my first post... I've spent days reading here, but to read it all would take a lifetime, so apologies if this has already been asked. We are mortgage free, in our early 60s, self employed higher rate tax payers. Looking at the depreciating housing market, our property could be worth 20-30% less in 5 or 6 years time. Is it better to sell now, invest the money we get and rent somewhere or stay as we are? Why what does it matter to you if your house goes up or down in value. I str'ed in 1999 and again in 2004 both times to lose money.My intention of course was the opposite.Its all a gamble but I would say in your position youve got more to lose than gain.What would you do if you did str only to find property rocketing again and you not being able to buy anything approaching what you had before. It would be a tough call at 60 to sell a house and end up in a flat. My advice for what its worth is to stay put. Quote Link to comment Share on other sites More sharing options...
Mr Nice Posted March 2, 2008 Share Posted March 2, 2008 Offset that against house prices falling significantly. You are correct though, inflation is a worry, which is why I currently have substantial funds in EUR. With the current volatility in the stock market and a big question mark over property, I feel safest with liquid cash at the moment. why not at least buy some form of short term euro denominated asset? like a gvt bond or CD? Quote Link to comment Share on other sites More sharing options...
Killer Bunny Posted March 2, 2008 Share Posted March 2, 2008 Having sold my mortgage free house to move area, I decided to rent and am very relaxed about my decision. I'm currently paying about half the amount in rent than the interest I would lose if I drew enough cash out of the bank to buy the house I'm renting. Of course, you must make your own decision based on your circumstances. Yes, but you didn't try to sell in March 2008. To the original question - the market will fall, IMHO, a further 30ish %. If you were able to sell it would be at price now - 10%, I reckon. The cash could pay the rent. Then you buy cheaper in 3 or 5 years. You do the sums. All the best fp Quote Link to comment Share on other sites More sharing options...
Mr Nice Posted March 2, 2008 Share Posted March 2, 2008 Why what does it matter to you if your house goes up or down in value. I str'ed in 1999 and again in 2004 both times to lose money.My intention of course was the opposite.Its all a gamble but I would say in your position youve got more to lose than gain.What would you do if you did str only to find property rocketing again and you not being able to buy anything approaching what you had before. It would be a tough call at 60 to sell a house and end up in a flat. My advice for what its worth is to stay put. there were falling prices and critical bank failures in 99 or o4 was there? for a person in their 60's it is better to play it safe and lose out on some possible appreciation, than to gamble and definitely lose half . imo security has a value, like insurance. byt selling to rent, it removes a lot of the uncertainty from the near fute when he and his wife will be retiring. taking the pressure off of them for making hasty decisions etc that might not end up well. Quote Link to comment Share on other sites More sharing options...
Guest barebear Posted March 2, 2008 Share Posted March 2, 2008 there were falling prices and critical bank failures in 99 or o4 was there?for a person in their 60's it is better to play it safe and lose out on some possible appreciation, than to gamble and definitely lose half . imo security has a value, like insurance. byt selling to rent, it removes a lot of the uncertainty from the near fute when he and his wife will be retiring. taking the pressure off of them for making hasty decisions etc that might not end up well. Well the talk in 99 and 2004 was we were heading for a recession, as it is now.So I thought I'd do the 'clever' thing and str but it back fired.As we all know they, the supposedly independent BOE dropped interest rates and it took off again. So in their position and knowing recent history I wouldnt be taking any risks with my home. Just my opinion obviously. They dont say why they want to make money by str'ing,it could be they have very little pension who knows? Quote Link to comment Share on other sites More sharing options...
tiggerthetiger Posted March 2, 2008 Share Posted March 2, 2008 (edited) there were falling prices and critical bank failures in 99 or o4 was there?for a person in their 60's it is better to play it safe and lose out on some possible appreciation, than to gamble and definitely lose half . imo security has a value, like insurance. byt selling to rent, it removes a lot of the uncertainty from the near fute when he and his wife will be retiring. taking the pressure off of them for making hasty decisions etc that might not end up well. Why does it have to be about money ?....security is more than pounds in the bank.Its about a happy home life with good neighbours.It can be about owning your home and not worrying about when to buy back in just as much as it may be to some of when to sell ? Why swap one worry for another.Especially to live in someone elses house. Security at later stages in life is about familiarity also,being used to living where we are.Security comes in all shapes and sizes depnding on who we are and what makes us content. Mr Nice you equate security with money.Some people feel secure having no money but a compatible partner.There are so many other things that makes us feel secure in life Edit : I should have said "it can be about owning your home" not "it is" I am aware some people rent and are happy ! Edited March 2, 2008 by tiggerthetiger Quote Link to comment Share on other sites More sharing options...
Guest The_Oldie Posted March 2, 2008 Share Posted March 2, 2008 Why does it have to be about money ?....security is more than pounds in the bank.Its about a happy home life with good neighbours.Its about owning your home and not worrying about when to buy back in just as much as it may be to some of when to sell ? Why swap one worry for another.Especially to live in someone elses house. Security at later stages in life is about familiarity also,being used to living where we are.Security comes in all shapes and sizes depnding on who we are and what makes us content.Mr Nice you equate security with money.Some people feel secure having no money but a compatible partner.There are so many other things that makes us feel secure in life After owning for many years, we are thoroughly enjoying the freedom of renting and are in no rush to buy. Quote Link to comment Share on other sites More sharing options...
Mr Nice Posted March 2, 2008 Share Posted March 2, 2008 (edited) Why does it have to be about money ?....security is more than pounds in the bank.Its about a happy home life with good neighbours.Its about owning your home and not worrying about when to buy back in just as much as it may be to some of when to sell ? Why swap one worry for another.Especially to live in someone elses house. Security at later stages in life is about familiarity also,being used to living where we are.Security comes in all shapes and sizes depnding on who we are and what makes us content.Mr Nice you equate security with money.Some people feel secure having no money but a compatible partner.There are so many other things that makes us feel secure in life thats why so many people have no savings. if you could possibly feel secure with no saving, or a dwindling cushion as your primary savings asset is deterioration, all because you have a lovely garden, more power to you. I am in the camp that says renting isn't the hellish punishment that it is always made out to be by many of the posters here, and could very well save this guy several thousand dollars that Im sure he will be able to use as he heads into retirement. It's at LEAST worth running the numbers so an informed reasoned decision can be made. knowledge also can be security. Edited March 2, 2008 by Mr Nice Quote Link to comment Share on other sites More sharing options...
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