Has anyone else 'stepped off' the property ladder in order to waiti for your 'dream house'

[Destinationendoftether]

So....after posting last week asking for opinions on choosing between two fab houses, we were shown around house two again (second viewing).

Decided to offer but EA came back saying that someone else had offered a few days before we had second viewing and their offer was higher. There commenced us putting in higher and higher offers until the EA came out with it......she said that if it is our 'dream home' then we should consider putting in a full asking price offer. Well that is more than we consider the house to be worth and would stretch us to the limit, so no go, and also now DP is fuming as he feels we have been 'played' by the EA.

So we a now considering ploughing on with the sale of our own home and going into rented for a while until something else comes up, this could take a while as the are so few suitable/desirable houses in the area we need to be in.

Anyone else been in this position and if so did it work out ok for you?

Thanks

[RCheshire]

We moved into rented partly because we couldn't see anything we wanted and partly because we wanted to avoid a chain (on our 'end').

The only warning I'd give is that with no time pressure ("need to find a house within the next four weeks to keep my buyer") you do become fussier and fussier!

[georgedawes]

Not done it, but I definitely think you're doing the right thing. You'll be in a stronger position when you buy too.

[specialsubject]

yes - big distance move and also wanted to break the chain. (still got messed about by people two slots down, but there you go).

it makes you dream buyers as you have the money ready to go, and could secure the perfect property. The 'buts' are:

• two moves, two address changes
  
• time in storage
  
• if you can't find a short-let landlord you'll be in rental for a six month minimum.

[Ragwort]

Same as special - we weren't exactly waiting for our 'dream' house but moving a long way and wanted to check out the local areas first.

There are drawbacks, as special points out, also if you haven't rented before there are lots of hidden costs and stress. I had rented since being at university (over 30 years before when renting was much more casual ).

[xabiuol]

Yes I have.
However I have come to the conclusion that my dream house is not in my price bracket so am now on the look out for something less exciting.

Renting has been a real (shocking) eye opener. It is the first time in my life that I have ever had to rent (as before I have always had my own house or stayed as a lodger with friends or family) and I wouldn't want to do it long term.

On the plus side we are ready to proceed when the right place comes up.

Potential problems (both of which apply to me )

1. If prices in your area are still rising and it takes you a long time to find somewhere.
   
2. Landlord issues.

[redwellybluewelly]

Yes.

We did this last year after the house we were buying fell through and having got the asking price on our property were reluctant to let the buyer down.

It worked ok and put us in a very strong position when we bought our house which we both adore. When we were looking around aftwr accepting the offer on our house there was really very little we liked.

It was more costly to move twice, especially as we used removal firms, had we not had DC then I'd have spent a lot more time clearing junk. One tip was that we kept the boxes from our first move, and negotiated a slight discount when we hired the second firm. Also we got slightly screwed over by our landlord and probably lost £300 in total.

It worked overall in our favour but the year spent in rented was stressful because we couldn't decorate and weaning in a house with cream carpets and white walls almost drove me demented!

[Mandy21]

We did - not really to wait for our dream house, but to find the right house in the location we wanted at a price we could afford.

We rented for 2 years before buying again - the timing worked out very well for us (sold in Q1 2008 before prices dropped through the floor in Q2 2008 and the months after) and bought again in Q1 2010.

I don't have any negative issues with renting - rented a very nice house (which we wouldn't have been able to afford to buy), had all been newly decorated and carpeted when we moved in, managed by an estate agent just down the road that dealt with any issues promptly, got our full deposit back when we left.

Meant we were in a strong position when we came to buy - our house went to a bidding war (final offers) and we only secured it because we could move so quickly. Also meant we had a little bit of overlap between giving up the rental property and moving into the new house (2 weeks) which meant that we didn't have to move in one day - spread it over a few days / couple of weekends! Worked v well for us.

[newgirl]

I think it depends on whether you think the prices where you want to buy will go up.

In our area lack of family houses near the popular secondary school mean prices have risen by 50k in 18 months.

[blueshoes]

Yes, we did that, in London.

We wanted to upgrade from an intermediate to our forever home, so in the ordinary course would have ended up in the middle of the chain. To avoid the chain breaking, we took the risk on ourselves and moved into rented accommodation and capped the chain. We used that as a bargaining chip to stop (further) attempts on us to bring down the purchase price on our house on the basis that we were taking on unknown risk that others in the chain were not, just to move things along for everyone else.

In the end, we found a house and made an offer to buy almost immediately after we sold - it was a house that had just come back on the market that we missed out on previously because our chain was then broken. 4 months later, we completed on the purchase. One year later, we moved in after extensive renovations.

So it has worked out. But we were Very Lucky. Prices just keep going up in London.

[blueshoes]

Like Mandy, we sold without a place a move into to put ourselves in pole position to snap up our dream house. There were 8 bidders within a week of the house we bought going on the market and it went to sealed bids. According to the EA (don't know how much to believe), we weren't the highest bidder but were in the strongest position to complete and were credible buyers. We even offered slightly lower than the asking price but got it.

[bassingtonffrench]

Nobody has mentioned the fact that rental money is money down the drain whereas mortgage money pays off your debt and a portion will become your own capital.

This is one of my main worries about stepping off the property ladder, but are there ways of mitigating this?

[Mandy21]

Its not necessarily money down the drain, most people assume that it is but when you do the sums, its not always the case.

Our mortgage repayments were about £1500 a month, we were paying off about £8k a year. Each year therefore, it was costing us say £10k in mortgage interest. We also would have spent money on maintainance etc say £2k / unforeseen repairs etc.

Rent cost us £1000 a month so £12k a year - roughly speaking therefore, we spent about the same. We put the equity we had in a (relatively) high interest account which gave us some interest and due to the time when we came off the ladder, gave us a better return that if we'd have been in a house where the value was falling. We didn't make money but we certainly didn't lose it.

And add to that, the benefit of being able to proceed so quickly. Sometimes thats a financial benefit as blueshoes says, they got a better deal on their purchase than they would have done. So that obviously has a bearing on whether renting makes financial sense. Its not just a question of losing the benefit of paying your mortgage down in the rental period. Obviously you need to consider everything - the local market, mortgage rates, saving interest rates, rents, maintenance costs but you need to do the research before you can make a decision.

[PareyMortas]

Yes we did it and it was a lot of upheaval, the children found it hard to move twice within a year and of course your removal company charges are double. I would be very wary of doing it right now. Only yesterday they were talking on the radio about how mortgage approvals had increased and surveyors were reporting an increase in instructions. I think things are on the move and depending on area you could find the prices go up and you can't afford the same house.

[myron]

We've done this 3 times, the last 2 times with children. We got fussier with each move especially when school catchments come into play. Renting is the easy part - it's not ideal but it's temporary. Just go for a 6 mth tenancy and it'll turn into a periodic i.e. rolling monthly contract thereafter.

We relocated long distances and definitely wanted the time to get to know a new area before committing to a house purchase. This also allows you to wait for the right house to come on the market before pouncing. We were slightly naive at first - even with a healthy budget and no chain, there is a lot of competition for the keenly priced properties in the right location. You definitely won't be the only ones waiting to pounce!

You will be a great position to buy - you may not get a 'bargain' but renting allows you the time to know the local market well so when a 'good' house comes up, you'll be in a great postion to beat others off.

[Bellaposey]

We moved back in with family (toddler in tow) in September after we sold our first home and there was nothing on the market for us. We had an offer accepted on a dream home last week so it's paid off for us (Hopefully!).

[Lilmisskittykat]

This is what I have done. I sold in August and currently living back with parents this has left us in a string position if something comes on (no luck yet) but we have the advantage of saving as much as possible.

I have just had to put a lot of my stuff in storage and it is taking longer then anticipated but I just keep thing is short term pain but gives us the best chance.

Will it pay off? I don’t know I hope so. I can relate to it maybe making us more fussy

[Lilmisskittykat]

Gosh I should re read before I post - sorry