Would it be awful to pull out of selling my flat?

[matildawormwood]

I'd really welcome some advice. We are selling our flat and our buyers have had the survey done but no contracts or completion date so far. We hoped to find something to buy ourselves but have seen nothing suitable and I am not hopeful of finding anything before Christmas now as it's gone very quiet. We could let the sale proceed and move into rented but a) this would be incredibly expensive, more than twice what we pay in mortgage and we'd have to commit to a minimum six month lease. b) we would lose our existing mortgage which is a very good deal and which we were hoping to port across to our new house...the transaction would have to be simultaneous to keep the mortgage. I truly hate to let our buyers down and they will be out of pocket on the survey/solicitor fees but I am starting to feel panicky that by trying to do the right thing and letting the sale go ahead I'm possibly making a big financial mistake. We need to be in our new area by January to apply for schools, so if we did pull out of this sale I'd probably rent out our flat and find something to rent in the new area (the income from renting our flat would more or less cover the cost of renting in the new area). Does this seem like a reasonable course of action? What fees/penalties will I be accountable for if i do pull out of the sale? Can anyone suggest an alternative?

Why don't you talk to the vendor through your EA and see what they say about giving you extra time to find somewhere? Believe me renting a property out is not fun at all. I did it for 4 years when we lived overseas and at times it was the biggest ball ache going.

Couple of things:

if you pull out now, are you likely to be able to find buyers again when you need to?

if you let out your current place, can you do so on your current mortgage or will you have to do BTL rate?(ie will you lose the rate anyway)

if you pull out you will then be faced with trying to co-ordinate the sale of a rented out flat, the end of your lease period on your place and completion possibly in a chain. Your tenants might not cooperate and you might face fees to get them out.

do the maths on the loss of the interest rate and then balance it against the cost of the issue of renting your flat out.If you have decent equity don't forget that this will get a little bit of interest during this time.

as things stand, if you go ahead you know that your worst case scenario is 6 months of rent. but you will be able to move quickly when the right place comes up. There are lots of unknowns/hassles if you pull out

I would also suggest you look at the new LA's rules on residence when applying to schools - if the two areas are fairly close together, then if you own a property in one area and rent in the area where you're applying, it might be thought you are only doing it to get a school place. You may need to have a minimum 12 month contract, and you may have to stay there at least until your child starts school, unless the place you buy is in catchment for the school you're offered.

For me your best option is to find somewhere. What do you mean by nothing suitable?

Are there areas you'd like to live in but no houses? If so I'd do a targeted mail shot of the area with the places you'd like to live in. There will be a proportion of those you mail who will respond.

renting out is not quite the goldmine that it first appears. there are lots of expenses which eat away at the headline rent. i would be surprised that it would end up subsidising your rental.....

think gas tests, agency fees, wear and tear, tax, repairs.... do your sums very carefully.....

Thank you - some really helpful replies here and that's a good point Aviva and Sparkle, that I might lose my mortgage deal anyway if I rent.

Where we live the market is pretty brisk - our flat sold within three weeks so I'm not too worried that we wouldn't sell it again. I am more concerned about letting our buyers down but I have to weigh this against the long-term financial implications for us.

Rusty, we are moving to a completely different area so I don't think it will look as though we are trying to pull a fast one when it comes to schools.

Otherworld, there is very little on the market at the moment in the area we are looking, we didn't put our flat on the market until the beginning of september (long story, family bereavement) and I think our timing was rubbish as by the time we started looking things were really slowing down and very few new houses are coming on the market. We are looking in a very wide area and are prepared to do work on a house if need be, so I don't think we're being too picky or anything, and our budget is realistic for this area. It's also a pretty popular area so places tend to get snapped up really quickly when they are half decent. I never thought about doing a mail shot but perhaps worth giving it a try. Thanks for the suggestion.

I will be completely upfront about our situation and ask if our buyers will give us more time to find somewhere. Fingers crossed they will go for it but I imagine things won't pick up again until well after Christmas so it could be a question of months rather than weeks. But I will ask. Thank you.

Thanks Tricot, when it comes to renting am thinking damage limitation rather than goldmine, but they are all good points. I'm going to see a house today - how wonderful if it turned out to be THE house. Would solve all my problems. Really don't want to have to rent myself and go through the hassle of moving twice. Fingers crossed!!

I'd chat with your buyers first. When DH and I were buying, we could easily have deferred moving in as we were renting month by month, so wouldn't make a blind bit of difference. However, I would be narked if we did that and then you still pulled out of the sale in the new year.

Not sure what area you're hoping to move to, but are there any holiday flats or cottages nearby. Friends of ours sold their property and couldn't find anything they liked so they approached someone with holiday cottages and lived there on a month by month basis for about 5 months during the winter. That way you aren't locked in for 6 months and the owner might be happy to get some extra income.

It's suburbia so not really the sort of place that would have holiday cottages. If we weren't tied into having to get DD into a school then it wouldn't really matter if we rented out of the area but we have to be living in the area to apply. I really don't want to pull out of this sale at all. I'm really desperate to move and I would hate to let someone down like that. I just had a big wobble this morning about affording the rent for six months when it's so much more than our mortgage. I guess I could try to look for a private short term rental which won't tie us in for 6 months.

Speak to the estate agent doing your sale. If they think they may lose the sale they may well be able to come up with a month by most rental for you.

We had this when a cash buyer came up for DH's property. We were on our honeymoon and due to move out of mine and into his 3 days after we got back stupid DH was supposed to have taken his off the market Buyer wanted 30 day completion.

We said yes but on the condition the EA found us somewhere flexible to rent whilst we looked. It kept the sale so EA did.