Sell and move into rented property

Ph3 · 10/12/2024 02:47

i suppose it would depend on the type of mortgage you have but I would think that paying on your mortgage (which as to be less than renting) helps you build equity and also the house prices keep going up… not sure about your specific situation but I wouldn’t advise it. I have had friends who have done this - but then loved rent free with parents which I think is different

Harshtruth1111 · 10/12/2024 03:24

hedgeqq · 09/12/2024 23:03

Has anyone experienced selling and moving into rented to find an ideal onward purchase? Is it wise to do so? Many say paying rent could be very expensive but on the other hand you earn interest from funds from sales and don't pay mortgage interest. For those managed to do so, how long did you find the rental property? Did it put you in a better position as a buyer?

This was sound advice in 2021 and 2022.
House prices were alot higher and people sold asap to get maximum returns and then rented whilst the market came down in price.

The market has cooled down and the rent prices have shot up.
You will not get great money for your house now and will have to pay above 1200 for a house on rent.
Plus saving rates have come down.
And also factor in if money placed in savings, you need to pay tax at 20 or 40 percent based on current earnings.
Plus could be years before you find a house you want.

If living rent free at parents then go for it.

Monty27 · 10/12/2024 03:31

Never come off the housing market you might not be able to get back on if prices shoot up again and you'll have spunked thousands on rent

RogueFemale · 10/12/2024 03:42

hedgeqq · 09/12/2024 23:03

Has anyone experienced selling and moving into rented to find an ideal onward purchase? Is it wise to do so? Many say paying rent could be very expensive but on the other hand you earn interest from funds from sales and don't pay mortgage interest. For those managed to do so, how long did you find the rental property? Did it put you in a better position as a buyer?

I did it once in 2017, very briefly - i.e. selling then renting in between before I could buy/complete on the next place. I did so because I was very keen to secure the sale of my flat, the market had been so dead in London since the Brexit referendum, so I agreed to move out before I'd found or bought the next place.

It puts you in a stronger position as a buyer as you can move quicker than if you're in a chain.

Having said that, I really would NOT recommend renting for longer than, say, 6 months between properties. A year MAX.

showersandflowers · 10/12/2024 04:35

We did this in 2021 but only for a few weeks and it worked out very well. We obviously already had a purchase lined up, our sale just went through quicker than purchase so we went with it so that we were in the perfect position with the purchase. There was a horrible limbo period though where we realised if the sellers pulled out we suddenly had nowhere concrete to live any more... but we did obviously have the advantage that if we had to start from scratch on a purchase we were no-chain buyers at least.

It's risky. But it might work out, like it did for us.

Beck30 · 10/12/2024 04:36

Yes, but we did it as interest rates were still trending up (ie house prices were more likely to slow), and also as we were moving to a new area / lifestyle so it seemed reasonable to 'try it out without hard to reverse commitments. Ended up buying the place we were renting. Useful and stress reducing to be out of a chain when buying.

Tel12 · 10/12/2024 04:43

Yes we did this a number of years ago. We rented for 6 months and yes we got a perfect house for us. The house was being sold with vacant possession. Might have needed to extend the rental otherwise. It definitely made us a preferred purchaser. House prices were relatively stable at the time.

lineylines · 10/12/2024 04:45

A family friend did that as she didn't want to lose the buyer.

It took her a while to find something, prices went up and she found herself priced out of the area she'd wanted to live in, that she could have comfortably afforded if she'd only held onto her house.

It's risky, I wouldn't unless they was no choice for some reason.

purplesmiler · 10/12/2024 09:08

We ended up in this position, it wasn't our first choice however we would have lost our buyer and initially we moved in to the property we were due to buy with the plan to own it within three months. Roll on ten months later and issues from the sellers side continued. We needed a whole new mortgage application due to the time and the new rates were so high we made the decision not to continue with purchasing that house. I didn't want to stay in it any longer on a rental basis as it needed work and it was never going to be our home. We moved to a smaller property to pay as little rent as possible and allow us to look at buying another home on our own terms. Fortunately it has helped as we are in a good position with no chain and currently going through purchasing our hopefully forever home.

Wherestheoffswitch · 10/12/2024 12:25

We did this last year as we were relocating and wanted to make sure it was the right choice before committing to buying. It was absolutely the right thing for us to do as we ended up re-evaluating where to stay and then when we did buy this year, we got a great deal on a house as we were chain free and they needed to move fast and we only had a month's notice to give on our rental so the whole process from offering to moving was only 6 weeks.

zingally · 10/12/2024 15:13

My parents did this.

They were moving to a completely different part of the country, so it would have been impractical to look for a house in the new area, whilst still living elsewhere.

They rented a perfectly pleasant but characterless newish build in a small town in the general area they wanted to buy, and then started looking.

They had a 6 month lease, and just by complete chance, they found their new house and moved in just before the 6 months was up.

The whole thing worked out really well for them.

Harshtruth1111 · 10/12/2024 16:28

People who did this in 2021 and 2022 made alot of money doing this.
A friend sold her house for 335 in 2021
That same house now can't even sell for 290.
It's worth putting your house up for sale and if you get the offer you want then great.
But
The market is not pretty now.
Plus rent is ridiculous
Literally about 1200 in a rough area

Original poster

hedgeqq · 10/12/2024 22:53

Our mortgage is on SVR (nearly 8% now) so it's definitely a lot of money. Need to relocate to a different area but we couldn't find an ideal house so far. The offer on our house is also quite decent. The problem with rental though is that most properties need 12m minimum tenancy. Another risk factor is house price going up rapidly next year but how likely is it?

OP posts:

Startingagainandagain · 10/12/2024 23:31

I did that 2 years ago.

I sold my flat in London and then moved into a rental in a seaside town where I was hoping to relocate.

I wanted to make sure I would enjoy living there before committing to buying and it also gave me time to look for a house to purchase.

I rented a small one bed for a year, then moved into my own house.

CandidHedgehog · 11/12/2024 01:35

I did this. It put me in a much better position to buy and let me check out a new area. However, I live on my own so I got rid of a lot of furniture, put the rest in storage and became a lodger for 6 months (which doesn’t have the same issue with minimum rental periods).

I ended up buying a flat in the same block I was lodging in which was really nice for moving - I completed on a Thursday, got my furniture delivered on the Tuesday following and spent a week or so unpacking while having somewhere else to sleep.

I don’t know if it cost me extra - I didn’t worry about that. It was less than the cost of buying the wrong place would have been anyway