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Contemplating selling our house and renting for while, what do you think?

21 replies

scanner · 10/04/2008 21:48

Our mortgage deal comes to an end soon and we are planning to buy a new larger house next year. So it ocured to me that perhaps we ought to sell now and rent for a while. My thinking is that house prices are certainly not going up, so we won't lose on profit on it. That we'd be in a good position to buy if we were in rented and that if prices go down we'll be selling high and buying low.

Am I mad?

OP posts:
ScienceTeacher · 10/04/2008 21:49

If prices fall, then you will be onto a winner. But it's a big if. And you will be paying tax on your savings.

Lubyloo · 10/04/2008 21:50

This is the situation we are also in although we wanted to move this year. I am a bit wary about renting though as I'm concerned that in 6 months we may find it hard to get a mortgage for the amount we require as lenders continue to tighten up their criteria.

expatinscotland · 10/04/2008 21:51

A big if considering the interest rate will probably be cut again, too.

scanner · 10/04/2008 21:51

Will we? Really so if we put the equity from this house into an account we'll be taxed?

OP posts:
fishie · 10/04/2008 21:51

the amount of messing around with moving and shuffling money about will send you insane.

Roobie · 10/04/2008 21:53

You'll be taxed on any interest you earn on your money while it's deposited. You'll only need to declare it though if you're higher rate taxpayers.

scanner · 10/04/2008 22:16

I love moving house, so that doesn't bother me and I'll rent in the same area so the dc's won't move school etc.

Interesting about the tax, dh is a higher rate taxpayer, but I'm not so I should talk to my accountant about it.

OP posts:
BrummieOnTheRun · 10/04/2008 22:18

The interest rate cuts are not currently being passed onto new borrowers, only existing customers on products that track the Bank of England base rate.

Lenders are still tightening mortgage criteria for new customers which means there will be increasing downward pressure on house prices as fewer buyers are in a position to buy and more people are forced to sell because they can't remortgage.

You're not mad to consider this. Lots of people are opting to rent rather than buy at the moment and many economic experts are advising people to do exactly that.

Whether I'd sell SPECIFICALLY in order to rent is another matter. You need to do the maths. The costs of selling and moving are high, so I'd only do it (and we did) if we were financially strapped and/or considering moving anyway.

I must say, though, it's a great relief to have no debt and a financial cushion with things going the way they are at the moment.

ChasingSquirrels · 10/04/2008 22:18

money in an account in your name then
You are taxed on the interest on the savings, not on the savings themselves.
Tax at 20%, 40% for higher rate payers.

BrummieOnTheRun · 10/04/2008 22:19

scanner - you stick the money in your account then, and promise your DH you won't do a runner

scanner · 10/04/2008 22:22

Will be interesting to hear dh's reaction to me hoarding the cash! I agree Brummie, we wouldn't consider doing this, just for the sake of it, but the plan is to move next year anyway.

OP posts:
BrummieOnTheRun · 10/04/2008 22:29

My DH has confiscated my passport.

ChasingSquirrels · 10/04/2008 22:32

it's always been a no brainer for us that the money is in my name.

sparkleymummy · 11/04/2008 13:10

The basic rate tax will be deducted at source from the interest so you won't be able to avoid that part uness you don't work at all and can use your tax free sum.

We've exchanged and will be going into rented when we complete in July. We're also looking to buy a bigger and more expensive house. The prices are definitely dropping and anyone who says its a big IF is just deluding themselves and trying to talk up the market. Repossessions are up and repo properties are already appearing on rightmove. The interest rate cuts are not being passed on. The first time buyers are not able to get the mortgages they need and still won't be able to even if prices drop with the tightening of lending criteria and the requirement for larger deposits.

I work in the HR/employment law field and the number of instructions we are getting for redundancy work is just amazing. Lots of people are going to be without work in the next year or so.

DH was recently told by a govenment bod that that government and financial institutions have no interest in letting the market deflate gradually. If its going down they need it to crash since that's when people can come in with their mega bucks, scoop up the bargains and bring the market back to life again.

Renting is a good option at the moment IF you can sell quickly and IF you were going to move anyway and so had already accounted for having to pay out stamp duty etc.

sophy · 11/04/2008 17:38

I think it's a good idea, but you may have missed the boat as far as selling your house - the property market is dead at the moment.

kerala · 11/04/2008 17:51

Thinking of doing the same. Just exchanged on our place for a good price (phew slipped under the drawbridge there I think) and the house we were going to buy has big expensive things wrong with it as thrown up by the survey so thinking about backing out.

So may rent for abit in the new area (we are moving 200 miles away) and see what happens. But worried it will be a huge hassle.

BrummieOnTheRun · 11/04/2008 18:02

kerala, if you're moving to a new area then renting is a great idea anyway. you can try out different areas.

we moved 4 times in under 2 years due to our property and relocation exploits and you cope. if it makes financial sense you'll deal with the hassle-factor.

I found the change of addresses a real PITA, but now have a spreadsheet with all the account numbers, phone numbers and addresses on it. Makes one of the jobs simpler.

Very very interested to hear that unemployment may be on the up. Another reason to be mortgage free and have a cash buffer.

morethan1 · 13/04/2008 10:52

This reply has been deleted

Message withdrawn at poster's request.

WideWebWitch · 13/04/2008 10:52

Too late imo.

chonky · 13/04/2008 10:54

Agree boat has been missed - however I think there's a lot more to come off property prices, so still something to be gained by considering selling and renting. We still haven't seen the all of the effects of the credit crunch IMO - it will take a while for it to be reflected fully in the housing market.

noddyholder · 13/04/2008 10:57

Top of the market was last summer.So def too late

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