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First world problem advice please

(7 Posts)
Sounbelievablydull Sun 10-Apr-16 11:29:42

We are wondering what we should do for the best with the denarii we are in.
We have a flat in a very non trendy part of london that is mortgage free worth possibly around 180k
We rent it out for 800 per month but after letting agent fees tax etc we actually get much less.
We also have a mortgage on our family home of about 250k the house is probably worth around 900k
I have read quite a bit about a collapse in the property market and am wondering if should sell the flat and use the money to pay off a chunk of our mortgage?
We go round and round in circles discussing this
I know we are lucky to be in this position but I would value some impartial advice

Luckystar1 Sun 10-Apr-16 11:34:19

Personally with the loan to value of your property I would look into remortgaging at a preferential rate (if possible), thus hopefully lowering your outgoing sand increasing saving potential.

I would retain the flat. Property (especially where it is generating income as well as increasing in capital) is always going to be worth something and one would certainly hope that even the basic house price increases would see it increase in value.

You are unlikely to be in the position to purchase a flat in London again realistically. An unfashionable areas quickly become desirable (see Brixton, Stratford, Shoreditch).

ThroughThickAndThin01 Sun 10-Apr-16 11:42:31

I would keep the flat if possible. It is giving you an income, and with no mortgage only upkeep it won't cost you anything.

As Lucky says, an unpopular part of London now, can only go one way as people are priced out of other areas.

With regards to your house, is a mortgage Of £250,000 comfortsble for you.? If there is a property crash and the economic fall out which will accompany it, are your jobs relatively safe?

Moving15 Sun 10-Apr-16 11:54:31

Keep the flat. Untrendy areas in London have a tendency to become trendy and expensive. Is there any investment due in the area?

Sounbelievablydull Sun 10-Apr-16 12:01:15

Well our jobs are ok as far as anyone knows. We have insurance in place for critical illness cover so even if one us could no longer work we should be ok.
We are now in our mid 50s so need to start thinking about retirement.
I don't know how we have managed to have such a huge mortgage. We added on loans for a loft conversion and a very expensive extension which have contributed.
I just wondered whether selling the flat make more economic sense given our mortgage payments are so much more than we get in rent.

ThroughThickAndThin01 Sun 10-Apr-16 12:05:05

But if you are paying your house mortgage down, eventually you will end up with two mortgage free properties, rather than just one. That can't be a bad thing.

If your jobs are secure, I'd carry on as you are.

We are early 50's OP, and have a much bigger mortgage than you. I know how scary it feels!

Sounbelievablydull Sun 10-Apr-16 13:06:14

It is scary but I very well aware that we are lucky as well.
We would also like to help our children ( young adults really) out but until we are sorted ourselves that does not seem possible

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