Cold feet or legitimate concern in current market?

[Scareaboutfuture]

I grew up in poverty and my family struggled with debt, which was traumatic for me but also motivated me to be as financially independent as possible and find my current situation a bit “triggering” of loads of anxiety (be gentle please). we finally found a house we like and can afford, offered asking price (which is reasonable, probably also because the house is in a semi busy road and late 60s, not the super popular Victorian terraced) and vendor accepted. We can proceed with our deposit (50%) and mortgage (rest, which represents less than half of what the bank thinks we can afford), whilst we sell the flat we have (no mortgage left here). If we had sold our flat we could buy with no mortgage. Our lifestyle is frugal, only high spend item is full time nursery for our only baby. After putting our flat on the market at the price we paid for it 8 years ago plus cost of renovation (a price 10+ estate agents thought fair and sensible), we had great feedback from viewings and some offers 10% below asking price, which in an expensive part of London is a lot of money. If we accepted the offers, we would technically lose money on the flat. If we held, we would have liability for 2 properties and a big mortgage and I am scared of it. We could rent the flat but tax and estate agent cost would leave us covering only the interest, plus tenants may ruin the conditions of the flat and affect the value and the window for selling to get stamp duty on second property back is limited. Our jobs are as secure as they can be (we have been thee years, had above average appraisals but you never know in the corporate world…) and we would still have more than 150k in stock and share isa. My biggest fear is that we may realised that have 2 overpaid properties and will be more stretched financially than I can tolerate…I am thinking to stay put (it’s more than enough space) and pull out of the offer but I am conscious that it took over a year to find this house…I know there are loads of intelligent people on this forum, please help me see things clearly 😀

I would sell the flat, getting renovation costs back is never a given, just because you’ve put that money into the flat it doesn’t mean it’s now worth that. Alsoit sounds like financially not owning two properties would mean you are really comfortable and would be a lot less stress. Renting can cost people fortunes and it’s very hard to get rid of bad tenants and there is a big court backlog.

My situation was not a million miles away from yours, although my background is more “stable low income” than “traumatic debt”.

This summer we bought a house and sold our flat. Overall, we maybe just about broke even on the flat. It took a looong time to sell, the market is weird (not London but high cost of living city with lots of jobs). The day it sold was such a relief, I personally got very stressed at the thought of having two properties to maintain, and for me it is preferable to have the certainty of cash assets we can put into the house or invest, rather than being tied up in property with the associated stresses of that. Our new house is better suited to our family life.

But I’m a stranger on the Internet! You’ve got to decide on your appetite for risk, for the balance of reward and costs in being a landlord, and which is the best place for your family to live. All you can do is make decisions that you’re comfortable with given the information that you have. All your options sound like they could be sensible for different circumstances…what’s your preference?

I would accept 10% under asking price rather than take the risk and stress of holding out. The way the market is going you are unlikely to get higher offers in the near to medium future.

Thank you all for the valuable and kind responses!