Moving house to trade up - worth renting before buying the next place?

ToneControl

Iamnobody said:

While you are renting you’re losing money - there’s uncertainty about house prices/Brexit at the moment but in 15 years I’m sure you’ll be ok.

There’s no guarantees at any time...

you can't say that, housing market changes can wipe out years of rent, or double it, nothing is predictable enough

ToneControl

worth looking at what rent costs for what you want
A few years ago when I was looking, bottom-level houses cost much more to rent than to buy on a mortgage, but the very big, pricey houses in the posh area cost more to mortgage than to rent, it's all supply and demand

boogieman

spark240 said:

House prices are definitely on the rise around Midlands where I am, renting is stable.

Ive just sold a place that we thought would be about £110k, it went for £118k.

Personally I don’t believe there will be any long term effect on house prices, I’d be more concerned about the interest rate you will be paying,

I would go rental for short term, puts you in a much stronger position and gives you some space to find the right house for you.

Good luck !

Whereas we had an agent round to value our place a couple of weeks back who said prices have dropped 8-10% locally in the last six months because everyone’s waiting to see what’s happening with Brexit. Take from that what you will, but I read it as “nobody has a frigging clue what’s going to happen”. 

Maynehead

Just put our house on the market today, so I’m in the same boat.

My current thinking is not to be too clever and start second guessing the market; if I see a house I like tomorrow I’m going to put an offer in. It may be the case that I won’t have found anything before brexit, in which case I’ll just ride that wave when it comes.

I’ll be watching the advice in this thread with interest though.

GuyR

FreddieVanHalen said:

GuyR said:

If you buy and sell simultaneously, you remove 100% of the risk of selling, then watching prices move out of your reach.
...
I am glad I do not share The confidence many people have in their ability to predict the future.

On this analysis, probably better to delay my sale rather than move into rented, either by outright delay or by taking the time to make some cheeky offers of my own whilst mine is under offer/STC.

I get some clarity of where things are going, still get some benefit from overall price level falls but am not exposed to quite the same level of gambling.

I don't reap the full benefit of a price level fall, but that's ok. It is true I have no special power to determine where prices are going to go, not having special access to EU negotiation information nor other global events crystal balls.

Quite right. If you are trading up, a market where prices are lower is a benefit as the price differential is lower, meaning less debt at the end of the transaction.
If you find a buyer first, giving the buyer transparency over likely timescales, generally they are usually happy to wait a reasonable length of time - enough for you too fnd a suitable purchase so long as your criteria are realistic and mainstream.
Your good position, with a buyer ready, will put you in a good position to obtain any available discount.
Lean hard on the agent you sell through to prioritise your search, in exchange for your instructions to sell. 
Good luck!!!

GuyR

Forgot to say, stretch yourself and buy the best house you can, within the context of your upcoming career prospects/expected family circumstance etc.
A more consevative move makes it more likely you will need to move again sooner, with all the associated costs, in particularly being rinsed again for stamp duty, from your already-taxed income.

FreddieVanHalen

BBC news: The Times reported Mr Javid was considering shifting the burden of stamp duty on to sellers, rather than buyers

Oh dear, The Saj has rather muddied the water for stamp duty related issues. Need to make sure I don’t get smacked for stamp on both the buy and sell depending on how the timing works out!

I guess I’ll be getting further lowballs on my sale because buyers rightly don’t want to pay stamp when they can load that onto me. Argh!

steveledzep

FreddieVanHalen said:

BBC news: The Times reported Mr Javid was considering shifting the burden of stamp duty on to sellers, rather than buyers

Oh dear, The Saj has rather muddied the water for stamp duty related issues. Need to make sure I don’t get smacked for stamp on both the buy and sell depending on how the timing works out!

I guess I’ll be getting further lowballs on my sale because buyers rightly don’t want to pay stamp when they can load that onto me. Argh!

Sellers will simply just include the stamp duty within the selling price.  I see it as a benefit for those with properties valued just above the threshold.  Say £275k but selling at £249k is advised because buyers will want to avoid the extra SD associated with such a small margin above the threshold.

FreddieVanHalen

steveledzep said:

Sellers will simply just include the stamp duty within the selling price. 

Maybe, if they can get away with it. Prices seem to be stretched already...whatever my buyer does to me I’ll have to do to my seller.

What’s frustrating is that it’s just a load of confusion right in the period where I wanted to move. Still, if it all works out as the Saj envisages it will be good for me as I’m trading up.

Thats a massive and slightly unrealistic “if” though!

wibble

FreddieVanHalen said:

steveledzep said:

Sellers will simply just include the stamp duty within the selling price. 

Maybe, if they can get away with it. Prices seem to be stretched already...whatever my buyer does to me I’ll have to do to my seller.

What’s frustrating is that it’s just a load of confusion right in the period where I wanted to move. Still, if it all works out as the Saj envisages it will be good for me as I’m trading up.

Thats a massive and slightly unrealistic “if” though!

Have you seen any houses you like at the moment?

Have you considered new builds and part exchange offers?

FreddieVanHalen

wibble said:

Have you seen any houses you like at the moment?

Have you considered new builds and part exchange offers?

I have a very specific area and type of property in mind, so that is a problem for me.

Puts me a tricky position moving in there as sellers know there is limited supply of desirable stock, even in a down market.

Hence me thinking of selling and renting to try and take some of the time pressure off the purchase.

Maybe it just introduces other pressures, like renting costs, price rise risk and general aggravation.

tone1

My advice for the housing ladder is this.. Move up or down the ladder, but never jump off. My mate did exactly that, and within 6 months he couldn’t afford to buy his old house back. He also thought he was loaded with a great big wedge of cash floating about, which was spent on things he should never have bought...

FreddieVanHalen

tone1 said:

My advice for the housing ladder is this.. Move up or down the ladder, but never jump off. My mate did exactly that, and within 6 months he couldn’t afford to buy his old house back. He also thought he was loaded with a great big wedge of cash floating about, which was spent on things he should never have bought...

That does sound like a bit of a nightmare!

I think I’ve just about reached the age where I’d be responsible enough not to spend all the money on guitars but you never know!

viz

You only need to rent in the situation where your buyer can’t wait and you haven’t found anywhere yet, right? so speed up your search, price your old house a bit higher, and find some short-term rent options for when/if you’ve found your new house and you have agreed everything in principle but things are just dragging. We did that, even paid a month’s deposit, and then all the timings clicked into place anyway so we never needed it. Lost a month’s rent but it didn’t matter really. 

If you have a buyer, as a last resort you could always have an informal agreement that you will knock a grand off every month you keep them hanging, for 3 months say. 

FreddieVanHalen

A good approach there @viz especially the last part on informal agreement and price.

One of the challenges I’m facing about the area I’m moving to is that it’s always been very high demand and firm pricing.

so even at the minute when things are much slower, sellers are refusing to move much on their pricing expectations and their agents will not even listen to offers until I have accepted an offer on mine.

I’d been thinking of getting mine sold not so much to short the market but to be able to go in with lower offers of my own on the basis that they know my offer is real.

My price bracket is “someone who works for a living” and I’ll be buying the smallest cheapest end of the target area but agents have said in the past that cash buyers with 1M+ are commonplace. (My budget is less than that!) I am trying to compete with City Partners and MDs who are chucking a portion of their bonus into BtL there because it yields a bit more than cash and has historically been a bit more stable than equities.

In the end I might just have to give up on moving there but thought it worth a shot whilst the market has taken pause.