To sell so we can live mortgage free - or sit tight?

[threefeethighandrising]

Please help me decide if I should sell up or not!

I've posted in this before and got some great advice. I just got my London flat valued this week and I wondered if that would make a difference to the advice I get.

They said it's likely to achieve £230,000 as it is, or £250,000 if we do it up (we'd need to plaster the walls - currently horrible woodchip! - paint & lay new carpets throughout and a couple of little jobs like tidying garden).

We actually live out of London, in a rented flat. We're likely to be in our new town for another 3 years for sure, then we may move on or get jobs locally we're not sure yet (depend on jobs at the time).

I'm fed up with managing the London flat (which is old with lots of expensive problems building up). We have about £150K equity in the flat which is enough to buy a modest place and live mortgage free in our new town.

People keep telling me I'd be mad to sell up in London yet as London property is still a good investment. But ... as £250K is a bit of a ceiling because of stamp duty, then actually there's going to be a period of time when prices go up elsewhere but our flat doesn't, so that is a vote in favour of selling sooner, isn't it? (Of course long term it will catch up once it breaks through the £250K sticking point - but how long?!).

Incidentally my upstairs neighbour put his flat on the market a couple of months ago, he got lots of interest and it sold in a matter of weeks. Ours is an up and coming "trendy" area, loads of new people moving in. (Although in reality it's pretty rough, lots of people want to be there!)

Also we're full-time students and so although our friend lives in our flat technically it's still our main home (we stay there when back in London) and where we live now is our "term time address" so we don't need to worry about Capital Gains Tax AFAIK.

Any advice would be much appreciated, thanks :)

[mollschambers]

Mortgage free for me. I'm not a risk taker when it comes to money. Though I am mortgage free so must have done something right.

[oldenoughtowearpurple]

Flog it. The risk and hassle of hanging on to it just doesn't seem worth the possibility of making some money on it in the whenever future.

[threefeethighandrising]

Great :) You see in my heart I want to sell up, but my head (and other people!) keep saying it's a stupid thing to do!

Would you buy a place knowing you might have to move again in 3 years?

[mollschambers]

Depends. Will you stay put if you can find work? Are their suitable employers locally? If yes then I might. If no then I probably wouldn't in this market.

[threefeethighandrising]

It totally depends on DP's job. I can get work anywhere, but DP's work is harder to find. Jobs in his industry do exist here, but not so many and there's fierce competition. Moving is a real possibility if he lands his dream job elsewhere once qualified.

[threefeethighandrising]

Thanks for taking the time to reply by the way :)
It really helps to talk it over!

[threefeethighandrising]

DS is young enough that I feel it's OK to move after we leave uni. But after that I want to stay put wherever we go next (or here if we stay) while he grows up.

[mollschambers]

In which case, given the number of threads on here from people who can't shift their houses (albeit probably because they're overpriced), I would say to continue renting and sell the London flat when DH is qualified and you have a better idea where you will be long term. Not sure where you are now but London flat more likely to hold it's value I would have thought?

[ElderberrySyrup]

I would think it would be a very good time to sell. It's possible London prices might go up a bit more but even in London we are seeing more and more falls; if you get out now you might miss out on the chance of a little bit more rise but equally you are avoiding the risk of a fall.

[mollschambers]

Wouldn't worry to much about moving while DS is in primary btw. I've done it. Kids adapt quickly.

[threefeethighandrising]

I don't think it will rise for a while though, as it's at £250,000, which is a threshold for Stamp Duty. Places at £250K tend to stay there for a while while places not near the threshold continue to rise.

mollschambers thanks thay's reassuring, you're right kids can be adaptable. I guess perhaps the truth is in part I'm sick of moving! DS is only 2.5 and we've moved 4 times. I'm prepared to do it a couple more times (we want to move nearer to school we want DS to go to anyway) but once we have permanent jobs I'd really like to stay put for a while!

[threefeethighandrising]

*that's not thay's!

[RhinoKey]

Mortgage free for me too. Its mine and DH's aim to be MF in the next 5 years (on both our house and my rental).

[mollschambers]

You could sell now and invest money rather than buy? Returns not great but if flat starting to become a burden then might be worth it. Or does London rent cover your rent just now?

[threefeethighandrising]

You're right though it's more likely to hold it's value if elsewhere prices drop significantly. It's a very sought after area (I can't say desirable as it's so rough!).

[threefeethighandrising]

The London rent does cover our rent here.
DP not keen on investing money as he thinks it's all about to collapse!

[mollschambers]

It's a tough one. Personally I would prefer to have my money in bricks and mortar than a bank right now but only if the bricks and mortar are my home.

What do you WANT to do?

If you want to sell and buy a family home then do it. Life is too short. Just be very very choosy. Go for a good area and drive a hard bargain.

If you have to move later you may not get all your money back but houses where your moving to will hopefully (from your point of view) have fallen in price too. You won't be in negative equity anyway so it doesn't really matter in the grand scheme of things.

[threefeethighandrising]

I want to live in my own place here. But we can only afford something modest.
I'm worried that it'll scupper our chances of getting a really nice family house slightly longer term, if prices do continue to rise in London. But then again everything could fall again and so then it'd be stupid to hold on!

I think if we could afford more than just a modest place here that might sway my mind more! I don't know. I think I would help to work out exactly what we can afford here, taking into account all the costs of moving. I suspect we're about £15-20K off the places we'd really like here. (Do they give mortgages to students I wonder?!)

I suspect to get the place we'd want here we'd have to spend quite a while looking and be a bit lucky! But I actually enjoy the process of house hunting so that doesn't bother me. When I bought the London flat, I could only just afford a one-bed and it took a while to find one that was decent / lovely, but I did in the end, in a rising market too.

[threefeethighandrising]

"Life is too short." Indeed!

Sorry if I'm drip feeding, but it might be worth mentioning that the rented flat we live in is absolutely lovely.

[threefeethighandrising]

But anyway, if we own a place outright then we'll be in a good position to buy next time round, won't we?

[mollschambers]

Okay so a modest house. In which case it's not going to be your forever house anyway and you will be moving again. I'm not sure you'd get a traditional motgage for that small an amount? I'd be tempted to stick to your budget and make cheeky offers personally.

[adamschic]

I'm contemplating doing something similar, selling my house in an expensive area, paying off the mortgage and buying and nice maybe smaller place nearer to work. I figure the money spent on the mortgage can be saved or spent on lovely things instead. Life is too short.

[Hullygully]

NEVER EVER SELL PROPERTY IF YOU CAN POSSIBLY HELP IT

[mirpuppet]

Sell but do not buy outside of London. Keep on renting. The property you will not be able to sell is the one in the town you are currently living. Unnecessary stress if you like where you are living.