Are we actually doing the wrong thing?

[unicornee]

So I have a plan to move to London. This require us selling our house and taking a further mortgage out (not currently in London)
We’ve just been offered out of the blue an ok offer on our house. Even if this doesn’t work out it got me and dh thinking we should sell the house. We’ve out grown it and think if we can get a good offer than we should just go for it. Every now and then people ask to buy the house but we’ve been too lazy to actually think seriously.

I told my parents we plan to sell up and rent a cheap dump while we look in London and just go in and offer on a property on the basis we are chain free.

I have literally been on Rightmove every day for months researching houses in areas we want to live in. We’ve been to see many towns and settled on three options. We’ve been to school open days etc and are pretty sure we know what we want.

Anyhow when I told my parents our plans they went on and on about how we mustn’t sell and then rent as we might never be able to afford another property if we do that.

Are we doing the wrong thing by selling renting then aiming to offer lower given our chain free position? We feel it might give us more scope to buy probates or properties that move more quickly off the market.

We bought in london chain free a few months ago. It didn’t give us too much of an advantage we found. We lost out on the first property to a couple who weren’t chain free but offered 5k more (not a huge amount on price of property). Then we got ours as no one was else bid on it. We knew they had no others bidders and used that as basis to go in slightly lower.
The chain free - i think - will only help if you are in bidding war with someone else offering very similir to you.

Out of curiosity, where in london are you thinking? Some areas are likely to fall in coming months others are just plateauing.

I think being chain free is a very strong position. Its always going to give you an advantage over another offer, unless of course they’re chain free as well.

Thanks both. @Nonomore2 that’s also part of the reason we want to sell and rent, as our property will no doubt drop in price eventually as well.
We are looking at dulwich mainly, we also looked Richmond and liked it there but is a bit further out.
Not a great budget either. £800k, which is why we wondered if we should try and go for it or potentially buy a doer upper but if we spent £800k on a doer upper I would have to go back to work to pay for the works on it, something I don’t want to have to do right now but obviously it needs must...

Chain free is great if you buy quickly. But if you procrastinate it could cost you dearly if property prices increase. They may not. The point is no one knows, literally not even the Bank of England hence why they do projections either way.

It seems to make sense to me. It means you can take time to research areas and look for the right place.
Just think, if you bought now but found the area or property weren’t right it and you needed move again it would cost you around £15k if not more.

Dulwich is nice, but yes sadly 800k doesn’t get you a huge amount there. I don’t know if you are restricted by schools. Properties next to excellent non-fee paying schools I don’t think will drop despite movements in general market.

Between east Dulwich and Denmark hill there are some lovely roads and cheaper than Dulwich village. You are then between 2 good overground stations (quick hop to Victoria from Denmark hill and quick hop to London Bridge from east Dulwich) if commuting is an Issue.

It is very hard to say if what your parents say is right.
Renting in london isn’t cheap. Let’s say you rent in Dulwich. It’s going to be £1500 at least for a decent 1 bed. (Though you can slum it for less!). If it takes a year to find a place that’s £18k in rent down the drain (so to speak). But your property might get £50k less in a year! Who knows?!
Each move does cost money.
Vans. Buying bits for the rental.
If you go to a small cheap place will you have to put that into storage? That’s an extra cost. All that has to be offset against this Ok off r you have had.

Like previous poster said no one knows what will happen.
I would be tempted to take the good offer.
Move to cheapish place in desired location where I could then actually go to viewings very quickly, be first to see properties and then hope to get somewhere.

Downsides also to think about are..

• renting properties with 6month break clauses is hard. You have to pay premium for short stay.
• there is lots of fear around brexit and market has slowed. It’s anecdotal but I have friends who sold in one part of london 3 months ago and took the good offer they got. They are now in rental accommodation but tell me nothing is coming on the market and complain how slow it is. So perhaps be prepared to rent for quite a while.

I’m sorry, that is an unstructured ramble and not probably not that helpful! Just a bit of a brain dump!

Thanks @Nonomore2 no the low budget of £800k is because of school fees.
They will have to continue to be paid wherever we are as frankly I’m not willing to take a gamble on a hope in hell of living near the ‘prime’ state schools.
By the time we’ve even attempted to move within the inch long catchment areas we will probably need closer to £3m. No hope for measly old me!!
Thanks for your points though they’re great.

Ah, I see. Well, I’m happy for you that you at least don’t have that dreaded headache!
Well, with child/children then rent is easily £1500 and for somewhere nice it will be £2000 plus. So that is quite a bit to offset . But the advantage of being nearby is significant. You can get to know the agents and hopefully see places before they have even gone on the market etc.

Hopefully someone will be along to advise.

Good luck!

800k won't get you a nice house? Why are you moving there then?

I also don't think you can assume you will be able to buy cheaper as you are chain free, it never really works like that, as I have sold chain free, and much depends on the seller. What they are willing to accept but also what posiiin they are in. All things being equal it puts you on a better position to have an offer accepted, but I don't think you can assume it gets you a discount.

Probate sales are also notoriously tricky and can be the opposite of a normal sale, they aren't faster, they are slower, way slower, as they need to clear probate but more importantly there is often more than one person who has inherited and getting them to agree can be a time consuming pain in the backside.

Coupling in the point about the rent, moving twice, especially with kids, possible storage etc, personally I wouldn't do it. There is no doubt it gives you an advantage in being chain free, but there is also no doubt it could cost you quite significantly.

It's a gamble with little benefit to be honest, especially if you know where you wish to live and will be tied by kids schools.

Sounds sensible to me.
If we were in a soaring market it would be more risky. But we arent.

Surely that's the point though, no one can predict the market in the next few months, no one. As said, not even the Bank of England.

It’s only a bad idea if the market is rising. Because then you lose out on the value of the property you are selling also rising while you wait to find the property you want to buy. The market in London is quite flat at the moment so I don’t think it will be a problem for you. We originally planned to do this because we got a good offer before we had anywhere to move to. But in reality it hasn’t worked out as the chain below us has taken so long to sort itself out that we ended up finding our next home and are now stuck in a chain.

I'm local and the market is completely flat from a seller's perspective, but as a buyer, this is the perfect time to do what you've suggested.

It's a buyer's market and the likelihood of it rising anytime soon is miniscule. Brexit as well as interest rate rises compound this.

You may not get loads for your £800k but a doer upper is certainly possible. Similarly, surrounding areas such as Sydenham, Crystal Palace, Gypsy Hill & Forest Hill will still get you a decent bang for your buck whilst being easy commutable distances for the Dulwich schools.

I’m local
It’s a buyers market. Prices not going down but certainly not up. My house isn’t selling and 2 years ago people were knocking on the door.

You are wrong about the state schools and the 3m to live in catchment! Really?

Plus, I'm pretty convinced that houses will continue to fall.

No one is 100% sure, but all the signs are on the table for continued correction. Houses in the local areas are already down 10-20% which is is a huge indication of a slow down.

If I was you I'd hold off buying for another year or so.

Also bear in mind that there is the very real chance you'll not be in a position to get the offer you have on your current house in 3/4 months from now.

I'd take the money and run OP.

Girl If houses are not selling then in real terms prices are going down. Take a look at Rightmove. The houses that are selling are those that are priced lower (i.e. correctly).

And, of the other 70 or so percent that don't sell, they end up dropping the price to sell, but many still need to drop prices further to reflect the actual market value.

If you study the market for a few weeks this isn't hard to see. If you have studied it for the last year or so, it's obvious.

Agents (the so called property experts) have no reason to share this information. But, ask them if you should drop your price to sell and they'll agree in an instant! Many will suggest 10-15% reductions if they're not worried about keeping you in their books.

There are still buyers in the market. Houses that are priced correctly ALWAYS sell.

The adjustment is big so many sellers are seeing offers as cheeky, but the options are sell now, sell for even less in a few months or don't sell at all.

The market it is telling us this even if the banks and the estate agents aren't. It is counterproductive for them to but markets are markets. You just have to look at it!

I’m sure you’re right in the main @home2018 - but I do know that hyperloxally to me comparable houses have sold over the summer- there being a fairly short supply of that kind of house (without going into too much detail). Currently the place we want to move to isn’t moving either so I’m not worried.

OP I’d rent then snap up the place you want

@Girlwhowearsglasses yep I’m wrong, slight exaggeration on both the inch long catchment area and the £3m houses apologies for such inaccuracies.
I said those figures in jest but realistically you’re looking £1m+ in dulwich village and we haven’t really got that to play with, not to mention there’s still no guarantee of a place unless you’re really really close.

Thanks for the advice. I think people have rightly pointed out renting is going to cost £££ but we were actually going to rent locally which is a lot cheaper and then try to move to London. However some excellent points re not really knowing the area and better to live there first. We have friends who live close to the areas so trust it’s a nice enough place to live. Ideally a shorter commute so I can go back to work one day!
If this was a few years ago I would not dare consider the sell rent buy plan, however it is based on the press version of events with regards to property prices stagnant or falling that has led us to try to buy somewhere having already sold our house.

In my part of London prices seem to be holding up - its quite an expensive area (though with quite a lot of variation). That's because very few people are putting them on the market so there's a shortage of supply and a lot of desire from families to move into the area because of its excellent state schools.

Separate from the property issues I do wonder have you considered any other areas in London with good state schools - there are quite a lot! You are selecting pretty pricey areas - I'd take the advice of others here to look outside or on the edges of Dulwich and Richmond. You will get a more for your money.

Bottom line is it's a huge gamble op, some random on here hoping they fall, or the sensationalist headlines doesn't change that. It could go in your favour, it could cost you dearly, the simple fact of the matter is don't gamble what you can't afford to lose.

You may be selling at the bottom of thr market and then putting youtself in a position to buy at the top end or rent for ages, or you may be selling at mid end and be able buy at low end, and profit, or they may plateau.

London prices typically increase faster than the rest of the country, and the drop has been minimal on actual house values (not for sale prices, that's very different), so if you're selling out of London, then hoping to buy in London in six months, then the risk is the house you can afford today is out of your reach tomorrow.🤷‍♀️

Prices have dropped slightly in my corner of east London. Certainly not rising.
When we bought, long ago, we did what you are suggesting. Rented for 6 months to check we like the area.
We bought from a woman who was downsizing and wanting to move quickly once she found her new property. It worked well for all of us.

A gamble is doing something blindly, and rightly so.

But, the sale data is there!

It's not just for sale prices that are dropping as 'some random' has said.

Just do your own research.

Tomorrow, call an agent that's listing an £850k house and declare your interest. Tell them that your max budget is £795k.

I'll eat my words if they don't take you on a viewing!

800 k classes as not a huge budget??? Omg another world springs to mind . Holy shit 800k is mega bucks and would get you a fantastic home in north east . London is just a city and I can't understand why anyone would want to live there when the prices are ludicrous and 800 k would get you nothing special.