To sell our House to rent with know prospect to buy again, but live in more ideal location?

[littleHen84]

We own our own home if we sold would make enough to clear everything we owe with some left over, there wouldnt be enough for a deposit to buy another home. We wan't to live more rurally but could only have this life if we rent, couldnt afford to buy. Am i being ridiculous to sell our house and security to live in the location we want but would have to rent? Feel like my head is spinning with pros and cons to each life just looking for advice really.

I wouldn't give up the security of a home you own for a rental right now, especially if you don't have enough in savings for a deposit (so I presume you don't have a big chunk of savings to cover your rent if, for example, one or both of you lost your jobs or got ill.

Do you have critical illness and income protection cover? Will you ever be able to buy in the rural area (are your salaries likely to go up, can you save enough to buy before you're too old to get a big mortgage, do you want to be paying off a big mortgage for longer)? Or will you rent forever and do your pension provisions allow for this? Do you mind the uncertainty of being at the mercy of a landlord who may wish to sell up at any time - i.e. do you have any children whose schooling could be affected, or would your jobs be affected if you had to move suddenly(ish) and had longer commutes from a new location due to there being lower rental opportunities in rural areas?

A lot to think about, and it seems like madness to me, but if you can confidently cover all the above then maybe!

From an investment perspective, it's murder.

No, short sighted foolhardy plan. Just rent out your current home to tenants and then rent yourself where you want to live.

@GreenlandTheMovie

No, short sighted foolhardy plan. Just rent out your current home to tenants and then rent yourself where you want to live.

Unless there’s a big difference in rent between where the OP lives now and where she wants to live that’s a financial risk.

Renting a house is pretty expensive - got to keep up with the household maintenance, laws around regular checks, all the tenancy checks cost money, void periods, risk of tenants defaulting on the rent, if you don’t live nearby you really need to have managing agents (10% to 15% of the rent plus VAT). Plus you pay tax on the net income (mortgage interest tax relief is limited).

So, sorry that’s not an easy solution.

It would depend on what my pension looked like, I am getting closer to retirement and the only thing that will mean we have an ok retirement is living rent free.

We do have a son who will start school next year, so would like to reach a concludion on what to do and stick to it for continuity, we could possibly afford to buy in a few years but it is very uncertain. I just feel really lost on what to do head/heart scenario, i think deep down staying in the property we own us probably the right thing, maybe this years events have made me evaluate life more and take a risk?

You will likely have no security if you rent. I rented for 12 years after my divorce and was asked to move three times. Once because the house was being sold and twice because they wanted it back for family to live in.

Also, your mortgage is probably lower than rent would be.

I would never do this. I WOULD rent my house out and then rent elsewhere because I'd have my own house as security in case renting fell through.

The UK does have a weird attitude to renting in that it's regarded as absolute financial suicide, absolute irresponsible failure to plan for your old age, 'money down the drain' etc, whereas spending £££ in interest on a high LTV mortgage for 25 years + is a totally sensible and responsible 'investment' . In large parts of the world including most of mainland Europe it's totally normal to rent long-term (although of course they do have stronger legal protections for renters than we do) and to invest in other ways to financially protect yourself for the future.

So it isn't necessarily awful to rent but it really depends on the rest of your financial situation - when you say you'd have nothing left for a deposit, does this mean you have significant debt that you are planning to clear using the equity? Where did that debt come from and is the situation that led to it resolved? In your plan after rent, bills and living expenses are paid would you have enough money leftover to save something for the future? How are your pensions situation? Essentially living month to month without building up any kind of asset or savings (whether this is in the form of equity in your home, cash savings, other investments and/or pension) is not the best plan for the long term and probably indicates you are living beyond your means, but if you don't have any spare income whatsoever this is going to be a problem regardless of whether you own your own home or not.

So in the absence of any further info I would say potentially yes do it, but cut your cloth to match your income, if that means renting a smaller house in a less nice area to let you build up some savings (whether that's to eventually buy your own house again or to invest alternatively) then so be it. Do be very wary of picking an area where house prices are likely to significantly rise faster than wages, as you may be at risk of being priced out, this tends to be less of an issue in rural areas than cities historically but with Covid/Brexit on the horizon who knows?

As someone who rents and is highly unlikely to ever be able to buy somewhere, do not do it. You have security, not the fear that your landlord may decide to sell your home from under your feet, giving you two months to find somewhere else and leave, or end up with a dodgy landlord who won't do essential repairs that are needed to keep your home safe for you and your family.

Madness. Agree with above, rent it out then rent where you want if you must.

I wouldn't make a rash decision right now, I appreciate it's much more sensible to move before kids start school but kids can and do move school, you don't have to make this decision in the next year, especially considering how tumultuous it could be. I'd be very hesitant to step off the ladder without a plan, as well as the investment aspect renting in this country can be very disruptive with less rights than countries where renting is more common in the longer term, so I'd be careful reading into international comparisons.