Would you sell at today's prices and move into rented accomodation in the expectation that prices will drop further?

[artichokes]

We had had an offer on our house that is probably just about OK for today's prices. It is 18% below our original asking price but in our area of London that is par for the course. However, a condition of the offer is that we move even if we can't find a place we want to buy, or if our chain falls through i.e. they want a guaranteed purchase.

Currently there is nowhere we have seen that we want to offer on. We could move into rented but it would be inconvenient. I am also concerned that with the interest rate cuts (another is expected) prices could start to rise and we would lose out by selling at the bottom of the market. However, my agent insists that prices will fall further and so getting out now is a wise move.

What do people think?

It depends on the availability of good rental accomodation.

Do you want to move house?

Oh yes I would, if you are going to get a good amount of equity for it at the price you are being offered...

Inconvenient is not too bad if the long term aim is a house you want.

Even if the market does not drop much more, I cannot see if rising either any time soon so you will have some time to find what you want.

I think it depends why you want/need to move in the first place?

we have exactly the same problem. Our worry is how mortgages will be next year, will we be able to get a decent one. Right now ours is transferable and pretty ok, but no one will accept a realistic offer [we have on our flat]. Everyone in denial around here, including loads of estate agents.

It is very inconvenient because you will have to move twice, but I don't think the market is going to stop falling for the next year or so, let alone go up again. The banks don't seem to want to pass on the interest rate drop to borrowers, and it's still much more difficult to get a mortgage than it was before the crunch.

You will be in a very strong negotiating position as a buyer without a chain.

We are going through exactly the same dilemma at the moment. We had asking price offers coming from all sides last summer but couldn't find anywhere so ended up not moving and obviously we didn't foresee a fall of such monumental proportions. We have since accepted a much lower offer on our house to reflect current market conditions and have had a substantial chunk taken off the price of the house we want to buy but are still dithering due to the uncertainty of whether if we hung on a little longer we could get new house for even less money. Rental not cheap so could face the prospect of lining a landlord's pocket for some considerable time to come so i know exactly how you are feeling. Guess I'm also looking for someone to advise me what to do but unfortunately life just not like that!

I think it depends how happy you are in your current house/why you are moving. As long as you take a good chunk of equity with you, you should still be able to get a decent mortgage and if it's a really good chunk, interest on it might cover interest payments.

How motivated do you feel about moving and how good are you at negotiating - there will definitely be further price drops but to make it really worthwhile you may have to haggle hard.

I would take the money and run!

yes do it. We sold in march, banked the money and moved into rented. Would like to buy in the spring and we hopefully are in a good position. Vendors/agents are in denial here too. in fact one agent has put on 10% to a house that was sold 18 months ago and has had nothing done to it

If you've got a buyer, you're lucky! I'd sell sell sell.

Prices are going to go down a lot before they go back up, so you'll get more bang for your buck if you do rent for a year.

A complication that I forgot to mention is that we do not currently have a mortgage on our current home so we have no monthly payments and can save alot. If we rent we will loose about £800(?) a month that we could be saving for the next house.

ah well that makes a difference - what percentage of your true value is 9600? Is it possible your house will fall by this amount in a year?

or will the interest you can make on your equity (after tax) support your rental?

Before we bought this flat we sold our previous house for a really good price but didn't have anywhere to move to, so we rented. Like you we had paid off the mortgage on the house we sold and we put the capital from the sale of the house into a high interest 30-day notice account, and some into premium bonds. IIRC the interest nearly covered the cost of the rent.

You may find that in the current climate the value of the house you are selling is dropping by several hundred pounds a month on average anyway, so you would be 'losing' some money even if you wait a bit longer before selling.

no because i see a house as a home and not an investment.

yes, if you have plenty of equity

I would move in to rented if I wanted to move anyway, the interest on your equity should cover your rent payments.

So it really depends why you are moving....

We are moving because we don't have a garden and we want another bedroom. We are not desperate, we love our current home, but obviously if we sold and prices dropped further we are mopre likely to afford the house of our dreams. However, I also view our house as our home and I know I would find two moves really disruptive.

ditto artichokes, on all your last post.

altho if prices drop further we still won't be able to afford the house of our dreams, merely a house.

I am absolutely certain that prices will drop a lot further (and have quite a bit of experience in the business).

what about mortgages eekamoose Will they be even harder to get next year?

It really depends whether you see your next house as the house you want to live in for the next 20 years or you are interested in the equity.

If its a home then things will go and up over the coming years and as long as you can afford the mortgage then its fine.

If you see your home as an investment then don't buy in the current market - alth' in NI we are beginning to see sales and that can be an indication that things are on the turn (our region can be a good indicator.)

I don't have a garden and would like to have one one day so I would definitely move in that case. Plus what bran said about house losing money vs paying rent.