Will house prices continue to drop? Do we sell up and rent?

[ducdo]

Currently have about 30k equity in our house (house worth approx 330k) and husband is really keen to sell as believes house prices will continue to drop and thinks we should come off property ladder now and rent. Monthly mortgage payments are £1,300 and to rent will be the same but I am nervous of coming off the property ladder?! Plus have 3 young children and don't want to disrupt them. Really need others advice..

And, you will have paid off at least most of the mortgage by then.

Just read his in the Telegraph report:

"The Numis report says: ?The bankruptcy of the UK is a very real probability as the UK Government is trying to stimulate a greater debt burden in a grossly indebted economy. We believe the scale of the macro imbalances in the UK means there is no prospect of a recovery in 2009 and we expect the UK to be mired in a deep recession through all of 2010.?

Ooer!

faraday - that sounds very grim and makes it more difficult to choose which option is the best or safest option to go with

I think there is a slight bounce atm which happens in most house price crashes and has been hastened by low interest rates and the printing of £.However in teh long term I agree that prices will probably fall by at least 40% from peak.I sold in spring 2007 and rented for 15 months then bought a real bargain very cheap last october an have renovated it and am going to sell it and rent again I think for teh foreseeable future.30k will go easily though so be careful

My advice, such as it is, would still be to stay put. You could easily find yourself in limbo where yes, you sell; the cash goes into a practically non-interest bearing account, you have to grab a renter which may not be quite what you wanted (and bear in mind in the family home stakes, I don't think renters have come down in price significantly) then you might find out the supply of possible buyer homes has practically dried up! MOST folk don't HAVE to sell, remember. And so when a good one comes on the market, there's so much pent up demand out there, you could end up in a price war yet!

I've certainly found a dearth of good property on both the rental and purchasing front here in southern Hants. I'm talking one 'possibility' a fortnight, perhaps!

I think that 40% from peak is a reasonable level for them to drop to. We are more than half way towards this already though.

I think though that interest rates are unlikely to rise much in the next couple of years, which is a completely different situation to the previous recession.

I agree what others have said and stay where you are. The fact it that if you put your house up for sale at £330,000 and you were even lucky enough to have any offers you could bet that they would be in the region of £300,000 anyway.

Moving house is an expensive business - so you will lose quite a bit of money on sale and purchase costs. You will get little interest on any money you make as you won't want it tied up in case you can't buy when you want. You may not find it so easy to get a new mortgage but could perhaps transfert he existing one.

You have all the hassle of renting and disrupting your lives. One of my friends has done this and is pretty unhappy living out of boxes - and they were intending to buy when they can find a house they like, they just didn't want to lose a buyer.

For those who want to move but are having trouble selling - have you considered a house swap? (Please note not especially recommending this site as I haven't tried it but the concept is an interesting one) www.homeswapper4sale.co.uk/

Thanks to all for your very useful advice and thoughts on what to do .. great food for thought and me and my DH have talked of nothing else over the past 2 months.

Pleased to say we're both feeling much more settled here now, happy to stay until we choose secondary school for our eldest DS which is around 2 years away.

If then we need to move house and buy again or rent, will make the decision then and be driven by best school at the time.

In the meantime will stay put and enjoy our home, thanks again

I haven't read all these - but we did sell to rent and it was the right thing for us.

We released equity to pay off loans and wanted a bigger house as ours was really too small for us (and we wanted another child)

I like the flexibility of renting - no big repair bills.

I'm not sure I'd do it just for the money but I definitely don't regret it. Good luck.

I second what twoluvlykids writes all the way.

I also agree with twoluvlykids.

Your house should be your home, not an investment.

Plus £30k is really not enough to take the risk and it'll most likely be eaten up with fees.