Sell house or rent it out.. WWYD?

[ginzillas]

There are lots of ifs and buts to our situation but I'm curious as to what other people would do.

We bought our first house a year ago in Hertfordshire. We only got our mortgage (for £160,000) by the skin of our teeth as I'm self employed and hadn't earned a huge amount since having DD. It's on a two year fixed deal.

We like it here but have since decided that we're better off up north in Yorkshire near family.

DH is looking for work and we've been offered the chance to live in a relative's empty flat on minimal rent. It would be perfect while we look for somewhere permanent to buy. We are very grateful for this. It's the perfect opportunity.

But should we sell our Herts property and stick the proceeds in savings so that we aren't in a chain when we buy again? Prices have shot up so we will have made a good profit. Or should we rent it out for six months to a year until our two year fixed deal is over and we won't be fined for breaking the deal?

DH doesn't want to be a landlord and I see his point but I'm nervous of selling our place and then finding that we are unable to get a mortgage second time around.

Any advice? Thank you.

[roneik]

The bank owns a house until the last mortgage payment clears their account.

So you don't own the house until you pay that last payment.

Between now and the day a lot can happen to the economy.
Don't let greed fog your thinking, at this time best to be cautious. SELL


A bird in the hand is worth many birds in the bush

[roneik]

Seen many property recessions and survived em all. 70yo and working class I never have tried to live up to what others project their image to. There will be countless people on their arse soon , be modest , I try to be and you will have more friends and be solvent.

With a modest wedge soon you will be able to buy a property with your gains.

I could tell you during the eighties several people I knew lost everything , I didn't because I didn't stretch myself financially

[HarrietdeBagotSoay]

Ok we have friends who did this: sold up thinking they could get another mortgage but couldn't as she was self-employed. I would rent it.

[roneik]

Don't forget when the s@it does hit the fan and it will very soon,all the repossessions are sitting on the banks books ,the mortgage terms will be more sympathetic.

We have been on a race to the bottom living standards wise, and from where I am and what I see nothing looks like changing in the near future.

SELL while you still can if the base rates treble probably as many as a million interest buy to let mortgages will fail . 1.5 % base rate will mean current interest only mortgage will double. Bringing one huge amount of repossessed property to the market at fire sale prices . Never mind the repayment fire sales

[roneik]

The herd is already spooked , sentiment has changed .

Use your sixth sense , does the outlook look good? NO

Will the government at the next election kill the elephant in the room (tax credits)? VERY LIKELY

Will our living standards keep going down until we are almost level with the Chinese?

I would say yes
Life's a beach if you make the right decisions

[rocket74]

Please be 100% upfront with potential tenants that it is only for 6months or a year. To them it may be a dream home or close to a school for their child to start at. Being a tenant can suck royally so think landlords have an obligation to be honest. If it's for a short lease.

[TheBeanAndTheBee]

You don't have to have a buy to let mortgage, you can ask your existing lender for permission to let. I would rent it out personally.

[roneik]

Rocket , she is going to sell if she has any sense, so no issues

I do however agree with your post.

OP do not be influenced by posters who I suspect have vested interest in talking up the market, A correction process is under way as I type this.
The government are currently only rearranging the deck chairs on the Titanic economically speaking before the crash, in order to get reelected .
Next year when the election is out of the way and with the deficit needing a fix things will be different

[DontDrinkAndFacebook]

roneik do you think if you keep repeating the same cliched phrases about an impending property market crash ad infinitum, for literally years on end, eventually when there's another dip (as there will be at some point) you'll be able to say 'I told you that.' Even if in the interim years the market has been very healthy?

Honestly. you're like a Jehovah's Witness predicting the end of the world, or that room of 500 monkeys banging on typewriters. If you leave them there long enough eventually they'll come up with a page out of War and Peace.

[ginzillas]

Hi. We were tenants for years so would never want to potentially shaft other people in that position. We would be upfront about it being short term if we did let it out. DH is totally anti being a landlord. I would only do it for our own security because I worry that by selling now and potentially not buying again for a few months, we'd end up unable to get a mortgage again.

[roneik]

Er I have only been a member of this site a few weeks and if you don't like what I post don't read it, so where do you get the years of repeating the same cliched phrases

What's the matter a bit of truth and reality that I consider to be the real situation getting in the way of your distorted views?

Have a nice day and I will post what I like I am not going to change my views because they don't fit in with yours

[roneik]

Seems like others are coming round to the new reality too, seeing more and more negativity in the press lately

moneyweek.com/uk-property-house-price-bubble-finally-bursting/

[EddieReadersglasses]

It's a bit like reading the house price crash forum, which locally has been predicting doom and gloom - for about 5 years at least. Eventually they will be able to say 'I told you so!
There are huge regional variations throughout the country so generalisations are unhelpful I would say.

Personally op I'd want to keep on property ladder so renting your own house and renting a bigger one in Yorkshire would maybe be best.
You should also check if your mortgage can port to a new house if you move- meaning you could sell existing and buy another house with your existing deal. I'd only do this if you are sure you will stay in that area though.

[roneik]

But it's not her house it's mortgaged, and there's a lot wrong with the economy and housing market at this time. All the same arguments about house price crash forum, is that the best the nervous interest only mortgaged buy to let landlords can come up with. Same old answers when what the op needs is to take into account is the distance between Yorkshire and Hertfordshire if anything goes wrong. The likelihood of interest rates rising. There's an election in May next year and whoever get's in power will have to tackle the debt mountain deficit. There comes a point when government borrowing creates such a drag on the economy with the interest on that debt cannot be ignored any longer. You are living in la la land if you don't realize the implications'

Anyway as I said before just like other property slumps getting a mortgage when a lot of property is repossessed and on the banks books becomes easier. That's whats coming if you don't understand that you soon will. It's all happened before

[roneik]

I could if I wanted brag about predicting in 2006 the banking crisis, I could brag about naming the first two banks to go bust. I posted on a forum and it was half wits that made me not bother anymore. Oh and I was called the seer on that forum. I don't want to link to it unless I have to as there were some a holes on there that got spiteful when it all started to come true .

You don't need to be physic to see that a ponzi scheme is almost at tipping maxwell moment

[roneik]

Time goes quickly when you are boomer trying to save the world .

As brown said before he was booted out " Later he rumored as saying " I done it but there's no money left in the till me and ed spent the f@cking lot "

My dog has just farted so I have to get air

[Greencheese]

roneik some of your posts on DIY are really nice and helpful, but your posts on anyone who asks anything about renting or selling really are not. We all know that you think all landlords are terrible money grabbing people but what ever the circumstance you always say sell then go on about the economy. It's not one size fits all.

I'm not being mean, some of your posts are really helpful but come on, leave the economy out of it for a bit hey.

[roneik]

Ok I will as you have put it so nicely . I will however reserve the right to scream at the monitor on occasion.

[Greencheese]

I feel a teeny bit bad now, of cause you can post what you like, but maybe if the poster ever starts a thread called 'what do you predict will happen with the economy and all the buy to fret landlords' I may start one just for you

[roneik]

[InsertUsernameHere]

i'm not sure what others think but it seems you might be connecting two unconnected events. Whether you sell or rent will not change whether you can get a mortgage in the future. When banks talk about porting it is just about keeping the rate. They generally do the affordability checks again, and decided whether the property is suitable to lend on. They have plenty of wriggle room to say no. So talk to you broker about this.
It might be the penalty for ending mortgage within a fixed rate period is enough to make you consider renting it, but your broker will also advice. (Just didn't want you keeping the house on an erroneous assumption - I'm not sure whether keeping or selling is right for you it is a complex decision - do you think there is any chance you would want to return to it if the new area didn't work out)

[bettykt]

I fully agree with Don'tdrink rent it out, as an ex accidental landlord, I now make a living as a BTL landlord, the penalties for cashing in now may/would be horrendous £££. You will also be kicking yourself if you sell now and and this time next year it's gone up by another £55k you'd have wished you'd have hung onto it. And finally if things don't work out up north you still have a foothold in the SE a major plus.

Good luck with whatever you decide.

[ginzillas]

insertusernamehere You may be right about it not affecting our chances of getting another mortgage, whether we sell or rent it out. I just thought it would make us look more attractive if we are already paying off a mortgage rather than effectively being first time buyers again. I don't think we'd necessarily come back here if the move up north didn't work out.