Stay and be skint or move and have spare cash

[Snorkers]

Really agonising over this, hoping for advice please

Moved to a large 60s property in a lovely well connected village in Sussex. We completely and foolishly maxed ourselves out (first time buying on the open market) and now can't afford to do anything, including home improvements like new kitchen, windows, carpets and fix a never ending torrent of bodges we're uncovering that were done by the previous owner.
Heating is high due to us being on oil/no mains gas but we do get solar payments which are c. 2k a year.
The garden is also huge and again lots of money needed for new plants and fixing an old pond.
There's just myself and husband, no kids, we're 40 ish and owe c. 265k to family but no bank mortgage, house is worth c. 550k.

We absolutely love the peace and quite in the village and generally keep ourselves to ourselves, we are not massively into going out-out (which is good as we can't afford to any more anyway!) we're at least 25 years younger than everyone else here tho. I also miss having a character property but do like the fact all the rooms are big here.

Our options are:

1. Work like crazy and live like paupers for c. 3 - 4 years and pay off part of our debt which will free up c. 800pcm, and possibly get a lodger too. We'll then have an extra £65k equity in the house not taking into account any increases in prices

1. Tart the place up, sell up in the Springtime hopefully and move somewhere smaller and more affordable in one of the towns nearby, we'll be c £1k a month better off but won't benefit from the extra equity. (Places rarely come up for sale in the village in our price bracket)

I feel so sad to think we'd have to leave the beautiful village as it's lovely but i think we may not have thought this through properly. I don't want to make another mistake by quitting if we should stick at it though, a bit of pain now for gain later.

Build a yurt at the bottom of your garden and put it on air B&B!!
Watched a programme last week and they charged £170 a night based on min 3 nights stay!!

Yeah I wanted to do that, we can't afford the yurt! Crazy they can charge so much isn't it.
I did airbnb in the last house and not really up for it again, even though it was good money, having people traipsing in and out of my house did my head in, even though they had just our loft space.
Most were sweet but we had some roight twats too and i felt like my home was not my own...

Long term crazy cat lady lodger?

If it is only 3 or 4 years I would manage as the long term result is that you have a bigger, nicer house in a lovely village.

I would hang on in there for a couple more years

Option 1 definitely. 3-4 years is nothing in the grand scheme. And definitely take in a lodger (or two?) to help with money.

God what a millstone it sounds like!

If it's only two of you you don't need a giant money pit of a place. Why not choose somewhere more manageable and pay that whacking debt back??

You’ve just paid £20k of stamp duty. Do you really want I pay another load of stamp duty?

What’s the interest rate on the family loan? Bet it’s not much.

If you like the property and the village I’d stick it out.

If you love the village, and the house (notwithstanding the work that needs doing to it) then I would stay. Go with your first plan - you are still young (I am finally old enough to say that to people OMG) and, as someone else has pointed out, it will cost another fortune in stamp duty to move. Doing up the house for sale will be stressful and you'll be unlikely to make your money back in the short term. Also, you say that the village is "well-connected" - is that to London? Because there is a lot of uncertainty about some London jobs with Brexit, so you might actually find it hard to sell if a typical buyer in the village would be someone who commutes to work in the City or similar. And then you would have done tarting up for a sale, but which might not be your dream tarting up, and that would be annoying if you ended up staying.

Hi, thanks for the replies, interesting most say stay put.

Yes that's right - negligible interest to family, but still repaying c. 1400 a month.

Yes connected to London directly by train.

The issue is that even if we pay off over 3/4 years we'll have some equity, but will still have no money to do the place up, and if we borrow again from the equity for refurbing we are back to square one with no money! I estimate we need 50-60k to sort the place out so another 4 years so save it up again.

I know it will be hard to sell now as Brexit has really put a spanner in the works, we'd probably wait until after March if we were going to try to sell.

Stamp duty for another place would be 10 - 14k which is a lot, but we'd have either a finished place so no work needed so can just move in and live again, and an extra £1k + a month, or buy a do-er upper and allow enough money to refurb, and still have an extra £1k+.

If we stay we are going to be poor AF living in an unsuitable house for at least 8-10 years when factoring in paying off debt and saving to refurb.

I'm minded to agree with Crooked it feels like a millstone and to just cut our losses. I'm starting to lose sleep and I can't think of anything else.

Christmas presents? No money
Holidays/weekends away? No money
Car repairs? No money
Fix rendering/dangerous pond/broken fence etc etc? No money
Make the garden look pretty? No money
Go for dinner? No money
Dogs need non-urgent vet treatment? No money
Clothes? Haha, I can't even afford charity shop clothes any more.

I could cry, i'm so fed up of being so poor.

Theres your answer in your last post OP. If you really think you'll be that much better off, then sell. It's miserable and stressful having no money

why have you got no.minimal mortgage? usually mortgages are a veyr good way of borrowing a chunk of money - you have a lot of equity if thats the value- maybe you shoudl speak to a financial advisor before you decide anything...
I would borrow the money to do the house up faster then decide.and give you saoce so £100k for example ..if you still dont want to live in the vllage then sell at least you will have added value and will still have a chunk of equity if you sold it

Look if it’s huge, rent some rooms out.

averythinline We borrowed from family who can't wait 30 years for it back you see
I also don't think we could add that much value tbh we already set a ceiling for the street.
Yes, we are idiots.
Labradoo aye we could do that - but it does seem silly getting lodgers in to pay for rooms we don't even need and I don't really want to live in a house share for the next 8 years.
I'm finding it harder to argue to case for staying tbh.
Anyone want to buy a lovely detached house in Sussex?!

Why don't you get a mortgage? The repayments would be smaller so you could start doing the place up.

Because we own our house outright and we pay virtually no interest on a £260k loan, not sure why i would then go and get a mortgage with all the risk that entails and sign over my house to a bank when we cant even afford the repayments we've got now.
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Would your repayments not be less over a thirty year mortgage though OP?

Personally, I would be tempted to cut losses and sell up.

You could own a smaller place outright too, and still be much better off per month. There are only two of you and your dogs at the moment. How badly do you really need such a large and expensive to maintain and heat place?

What is the rental value of the whole house OP? Could you rent it out (assuming it's in a good enough state) and that covers the loan repayment. You and DH rent a smaller place for less money. Have more disposable income, but still pay off the house and build equity.

You could be looking at retirement in a freezing dilapidated house! Get rid of it, it's only bricks and mortar. Wouldn't you rather live a comfortable, enjoyable life?

But you don't own your house outright. It may look that way on paper but you still owe money on it. I would be inclined to mortgage the property through a bank and borrow the amount needed for the renovations. You do have 290k equity sitting there. The payments will be lower over a 20-30 year term. Once the Reno's are completed you can then up your repayments to whatever is manageable and reduce the term of the mortgage which will then reduce the interest you're paying.

Surely you had an idea of how expensive this house would be before you bought it?!

I'd go to the bank, get a mortgage and pay off the relative. Then with the extra each month you can start doing the house up.

Sell up. You only need 2 bed house

Interest rates are still low. I would get a long mortgage, with an extra bit for doing the house up a little

Is it an inheritance tax thing?