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Original poster

What would you do in this situation?

99 replies

Frogmarching · 12/10/2020 17:07

Need a bit of impartial advice/other opinions as DP and I are just going round in circles about this.

We bought our London flat in 2016, in Spring, just before our DS was born. It's technically a 2 bedroom but the second bedroom is an odd shape and it wouldn't really work as an adult or teenager's bedroom - it's been fine for DS because he was in a cot and then a toddler bed, and it would be fine for a study (it's actually not a bad size, it isnt' "box room" sized), but if you wanted a second double bedroom or a room for an older child or teenager it just wouldn't be for you. It also has no garden.

We bought it for 345k which at the time given the area was booming was a pretty reasonable price. Then Brexit happened. Then the pandemic happened. We are desparate to move somewhere bigger but as it is no one wants to buy it - flats without gardens in London are badly struggling at the moment. It's on the market for 325k and I'm starting to accept that we are going to have to drop it even further. I never wanted to make money off it, but as it is it's looking like we're going to be financially no better off and potentially worse off than if we'd just rented for the past 4 years. We've 260 left on the mortgage - not enough equity to rent it out (I've explored this option).

So essentially we either sell at a massive loss or we wait it out and hope the market picks up a bit. My immediate fear is that the market will crash completely and we'll be in negative equity.

WWYD in this situation? I'm driving myself crackers thinking about it. Comparable flats in the area are selling once they drop to about 315k (on rightmove - how much they're actually selling for I don't know). The market is very sluggish in general for flats but some stuff is selling.

OP posts:
nicknamehelp · 12/10/2020 17:09

no one has a crystal ball to tell you the answer.

Newname1236 · 12/10/2020 17:12

Could you rent it out and move out of London and rent ? So.hold onto it until its the right time to.sell?

Gazelda · 12/10/2020 17:12

If you dropped it to 315, would you be able to raise a big enough mortgage to buy the size of property you need? If not, then there's no point moving.

If you can afford to drop, take out a mortgage and have the funds to cover the moving fees etc then maybe give a drop a go?

Interested in this thread?

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Property
Horsemad · 12/10/2020 17:12

Think I'd try and hang on but I've no idea whether that's good advice or not!

MiddleClassProblem · 12/10/2020 17:16

Other than the garden feeling more needed due to lockdown, you wouldn’t use it much in winter anyway.

Your DC is only 3, there’s no need to rush it out now. The market ebbs and flows so there’s no real telling what the situation will be like in 5 plus years time.

It might be worse to jump the gun and sell now than then. It might not.

At the end of the day you have a roof over your head.

At that pricy I don’t imagine you are that central, so are you looking to move out of London?

It’s not just about selling but buying to. Also if you move later you have schools to consider to...

Sorry no answer but just factors to think about x

Original poster
Frogmarching · 12/10/2020 17:19

Could you rent it out and move out of London and rent ? So.hold onto it until its the right time to.sell?

Unfortunately not, we don't have enough equity for a BTL mortgage. That would have been our back up plan.

If you dropped it to 315, would you be able to raise a big enough mortgage to buy the size of property you need? If not, then there's no point moving.

Yes, we would have about 50k from the sale of the house, plus 40k approx in savings. The stamp duty holiday would also help.

OP posts:
Original poster
Frogmarching · 12/10/2020 17:19

Your DC is only 3

No, he is 4.5

OP posts:
Original poster
Frogmarching · 12/10/2020 17:20

At that pricy I don’t imagine you are that central, so are you looking to move out of London?

Yes, we're moving to Cirencester to be near family.

OP posts:
MiddleClassProblem · 12/10/2020 17:21

@Frogmarching

Your DC is only 3

No, he is 4.5

Sorry, don’t know why my maths failed me so terribly 😂
SandysMam · 12/10/2020 17:22

Just live in it OP, it sounds ok! I would not take that much of a hit, better off over paying the mortgage to build up equity for BTL in the future.

Original poster
Frogmarching · 12/10/2020 17:22

I'm actually not bothered about the garden but I'm desperate to move for more space. I feel so sad we can't even eat round a dining table together as a family, and my kitchen is literally the size of a cardboard box.

The flat is lovely, we've made it nice, but we've outgrown it as a family.

OP posts:
Original poster
Frogmarching · 12/10/2020 17:22

better off over paying the mortgage to build up equity for BTL in the future.

That's what my DH says but I can't get over the fear of falling into negative equity.

OP posts:
BabyLlamaZen · 12/10/2020 17:24

Have you found a place you want? I'd keep it on and if something you love comes up then lower if needs be. I'd do house by house basis.

Original poster
Frogmarching · 12/10/2020 17:24

TBH the reasons to stay ALL outweigh the reasons for wanting to take the hit and move:

Reasons to wait it out - currently have a pretty affordable mortgage given our incomes which are both good, can afford to overpay, DS is settled at a nearby school which he likes, the flat although I moan about how small it is the fact of the matter is we've lived here and managed for nearly 5 years now so there's no reason we can't manage another year or two, not planning on any more DC so won't suddenly become too small...

Reasons to take the hit and sell: would have more space immediately, would avoid risk of negative equity.

OP posts:
Original poster
Frogmarching · 12/10/2020 17:25

Have you found a place you want? I'd keep it on and if something you love comes up then lower if needs be. I'd do house by house basis.

I've not allowed myself to get that far as it just makes me feel sad tbh.

OP posts:
m0therofdragons · 12/10/2020 17:25

If you can take the drop then do but do it soon as I have a feeling things will slow further with another lockdown. South has a couple of weeks by the looks of it. What has the agent said?

MiddleClassProblem · 12/10/2020 17:26

Does moving affect your work at all?

Original poster
Frogmarching · 12/10/2020 17:26

sorry I know no one can tell me what to do I just needed a sounding board. The uncertainty is doing my head in.

OP posts:
Original poster
Frogmarching · 12/10/2020 17:27

Does moving affect your work at all?

No, we both WFH in permanent roles and will be allowed to continue to do so post-covid, that's been checked with our employers. & both have jobs where we could work anywhere for relatively comparable salaries.

OP posts:
SheepandCow · 12/10/2020 17:27

It's hard psychologically to think you're 'losing' money - but in the end what's most important is that you can afford to buy where you want to move to. If you have enough to do that, just sell now. You still win. You can buy a nice family home near your support network. It all works out just fine. Try not to let could haves ruin that for you.

Original poster
Frogmarching · 12/10/2020 17:28

What has the agent said?

We've only had 2 viewings since we put it back up at the end of September. First was a FTB couple who intimated they were interested but then dropped off the radar completely. Second was a landlord who thought it was too small for the price and said he would only have paid 300 for it at a push (not that he offered 300, that's just what he said).

Agent said market is slow for flats without gardens but that it would sell eventually. But they have to say that really don't they!

OP posts:
Original poster
Frogmarching · 12/10/2020 17:30

Try not to let could haves ruin that for you.

It's more that I worry it's going to end up being a huge wedge between DH and I depending on what happens. Like if we take the hit and move and then the market picks back up, he'll resent me because he'll think we should have waited. And if we wait it out and the market crashes, I'll resent him because I think we should have just taken the hit and sold.

I should say at this point that I have OCD and get these terrible obsessive thought processes, so I really do apologise that I sound so irrational.

OP posts:
grassisjeweled · 12/10/2020 17:30

I'd wait. Its too much money to lose

Original poster
Frogmarching · 12/10/2020 17:33

I feel like waiting is the sensible option but then I go into a tailspin about negative equity. I'm such a mess, it's laughable really.

OP posts:
SheepandCow · 12/10/2020 17:35

I understand. It's very easy to get caught up agonising over what ifs.

The most important thing, however, is that you're both happy and can afford to live somewhere you want to. There's always a level of unknown with buying and selling even in non pandemic/Brexit times.

The key issues to discuss with the dh are:

  • where do we want to live?
  • can we afford to buy a family home there?
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