Are we mad to consider selling up and renting???

[zazas]

We have had an offer on our house but haven't found anything to buy that we like or can afford So we began to think that maybe we should rent for a year or two... The upsides would be, paying of some debt (car loan), invest capital, and our rent would be about £600 a month less in terms of what we would need to pay for a new mortgage - gulp!

We have our own business which is going well but we are only into year 3 and we would really be stretching ourselves financially to upgrade to a bigger house at this stage BUT in 2 years I am confident we would be in a stronger position to afford this.

Downside of course is that house prices continue to rise and we price ourselves out of the market but we are in Northwest - not exactly a hotbed of house selling going on here and prices pretty stagnant for some time.

Are their other downsides I am not aware of ???

Option of not moving not really there as we really run out of room (5 kids )

Hmmmm really thinking this might be a good option - 2 moves would mean a great big clean out though which we so need.

Only worried that my DP might think we are cash rich and have a mid life crisis and buy a motor bike or something else totally unsuitable

Worked out that if we invested the capital at 6% interest, then in 2 years the houses that we are looking at would have to have gone up by 3% each year roughly to equal the returns which doesn't seem likely or am I not logical in my thinking!

I have known quite a few people who did that, then became very picky about the house they wanted to buy, waited a few months and at the end they had to settle down with something that was no better (or even worse!) than their previous house.

I would get another house before leaving the one you have, or alternatively... extend the current one. But going for rented acommodation for a year or two would definitively get you out of the market (or make you accept a house you would have hated a year before)

It's never really a good idea to leave the property ladder completely unless you can be sure that house prices will fall - personally I don't think they will.

If they stay the same then you'll be ok but; if your business should start to fail or other unpredictable things happen financially you would be up the stream without the proverbial as you wouldn't get another mortgage.

We sold our (too small) house and rented, used the capital to clear all our debts / credit cards etc (DH was off work illat the time and i was on mat leave so a huge relief for us)- we've never looked back! yes OK house owning is nice but only if it is a house that works for you (I presume not if you are looking at selling). If you can use the money to help your business and potentially further your family financial interests that way, and you are both willing to take the risk, why not? FWIW we have never been happier- no dets (we both came to the relationship with dents then I got p almost immediately), house we love even if rented- great.

We did this the last time we moved house. We had a great offer on the house we were in and weren't completely sure that we wanted to live in the area that we were moving to. We sold our house and rented for 9 months and then found the perfect place to buy.

It was all very smooth as it meant we were very flexible about dates etc when both selling and buying, so we didn't have the issues that some people have with chains. Of course we did have to move twice, which was a bit of a pain, but that was before we got ds so it would be more of a pain with kids. Wherever you rent you will probably be on a short-term contract (I can't remember the proper term, but 6 months rolling with a month's notice after the first 6 months) so there is a risk that your landlord might terminate your contract, perhaps because he/she wants to sell, and you would have to move house again.

The current property market predictions are that it will be fairly flat for at least the next year, but I think you should base your calculations on the market rising at least a little to be on the safe side.

Sounds reasonable as long as you don't blow the money! Leave it in a high interest account where you can't spend it without lots of notice.

You will find that when you decide to buy again you will be in a really strong bargaining position with not being in a chain and will get a good deal.

Several of my friends have sold their houses then taken a 6 or 12 month lease to rent while taking their time to look for something to buy and have got nearly all the rental back in the discount they negotiated for not being in a chain. Plus they had the interest on all the capital in the bank.

Only down side might be if prices really rocket in the next couple of years but with interest rates rising thats not likely is it? If prices start to go down you will be quids in!

we are thinkinbg of doing the same zazas - we have a flat in the northwest and it is not selling. the houses we can afford would be ok for now ( currently pg with no 1) but we may grow out of it quite quickly. i also feel that the may be a dip in house prices and i am scared of being over streched with our morgate.
we do you live. i am just outside bury

I think if you've got an offer you're happy with now, take it. I think the market's going to drop like a stone.

Thanks! Think we are going to do this. I figure that the interest we will make on the money in the bank over 2 years would cover a moderate house price increase - I guess that is the risk we take - that it is more than moderate! Either way we would have a large enough deposit to buy something.

We have found a house that we do like but needs quite a bit of structural work on it - 3 buyers have pulled out - maybe they will eventually reduce it enough so it is worth our while and we can then swoop in and buy

Now looking at rentals - need 4 bedrooms which are not exactly a dime a dozen and yes they are all for 6 months initially and then monthly so easy to get out of if we spot the house of our dreams! The thought of moving twice with all the kids though is my one stumbling block - just getting us all out of the house at the weekend is a logistical nightmare!

By the way pud1 we are in South Lakeland, Cumbria

Zazas, look at propertysnake

Not mad at all in the current climate. When you do decide to buy again you will be in the stronger position for not being part of a chain.

We rent. The upsides for us:
Rent is much less than equivalent mortgage for our property. Children's toilet training accidents are happening on someone else's carpet
We do not spend every waking hour earning money to pay the interest on a mortgage
We do not spend every weekend obsessing about DIY

Downsides:
House is not exactly as we'd like it

The biggest downside IMO is the possibility of being given notice before you actually want to leave. We have arranged with our landlord to renew our contract a year at a time rather than go to the default rolling notice. The thought of being given two months notice to rehouse a whole family was keeping me awake at night. I'd therefore try and get a feel for whether potential landlords are planning to keep the property for the long term and avoid any that seem a bit 'flighty'.

Hope you find somewhere really nice

We are about to do this. Wea re selling our flat and can't find anything affordable to buy. So we have decided to rent for a year, then travel around the world for 6 months, then come back and see what the property market is doing and either rent again or buy. We will be using the money from selling our flat (no morgage) at about 6% interest rate and using the itnerest to rent. This allows us to keep the money from selling the flat in case we want to buy again. I am excited about the propect as it is allowing us to live in the area we want to live in which buying was not.