Time to sell for me? What do you think?

[Jonny5665]

Hi all.

I bought a property in 2009 down by where I live in South Wales. I bought the property for £66,500 and spent £5000 on it.
I had it valued 3 months ago at £80,000. So even through these bad financial times it has made me some money.
Since I finished doing it up I have been renting it out, which is covering my mortgage easily and giving me some profit.

I cant really see my property increasing more in value over the next 1-2 years really, but I am also unsure who to believe when it comes to future house price predictions.


Anyway, the reason i am asking if i should sell soon, is me and my gf are going to be looking at buying a house in the next year or so and was wondering would it be worth selling my house and having the capital in my bank ready for a deposit, as I dont know how house prices are going to go and at the moment there is a lot of equity in my house.

Any opinions would be greatly appreciated.

[New Homes Expert]

House prices are only going one way - DOWN!
Especially in Wales where unemployment is high.

Rents are increasing but cannot be relied on.
My advice would be to sell why you still can.

[Jonny5665]

Thanks for the reply.

Something I just completely forgot about is I am still in my fixed term until august next year so would incur a charge if I sell and pay off the mortgage

So if I dont sell would it be worth me buying another property to let say the beggining of next year or keep my money and then maybe take advantage of the cheaper house prices and buy a house for me and my girlfriend? Then hold onto my first property for a few years until hopefully prices rise again

[ComareTheMortgageMarket]

I think house prices are only going slightly down and depending on which press release you read they are not going up any time soon. The reason house prices are on the decrease are due to people taking a lower price for their house when they do sell, but then this causes a knock on effect for the house you also buy. Say you take 10% lower for your house than you think its worth (or it is valued at) you will also expect the house you are going to buy will also take a 10% hit. It is all relative really. If you can make money on your house then perhaps sell and buy a bigger one that you can also purchase at a lower value. Ignore the house price indexes at the moment though. They are influenced a lot by repossessions in the particular area so do not give a true reflection of the value of houses in that area.

At the end of the day it is what you are happy about accepting for your own house.

[Jeannie D]

The housing market is certainly sluggish but in terms of house prices - well that depends on whether your house is in a hot spot or a cold spot at present.

In your case, Jonny5665, you have a house that is not only paying its way but also turning a profit and it has increased in value in the last two years (which suggests that it is not in a cold spot) and you are already tied into a mortgage until next August. If you sell now, you will have all of the usual selling costs such as estate agents' and solicitors' fees, but you will also have to pay an exit fee for your mortgage. You need to work out how much that would cost. Then, the question is what you would do with the remainder of the proceeds. If you put the money in a savings account, as you suggest, you would have to tie it up for three to five years in order to achieve the best available interest rates - bearing in mind, of course, that inflation will be eating away at the capital at the same time. Interest rates are derisory at present and likely to remain so while the base rate remains at 0.5%.

Sorry to sound so gloomy but this is just a general reflection of what is happening in the economy. There are very few real safe havens these days for your money.

Isn't there an old joke about what you would get in you put 20 economists in a room? 24 different opinions. I am not an economist but in your place, I would stay put....well, at least until next August!

[Jonny5665]

Originally Posted by Jeannie D

The housing market is certainly sluggish but in terms of house prices - well that depends on whether your house is in a hot spot or a cold spot at present.

In your case, Jonny5665, you have a house that is not only paying its way but also turning a profit and it has increased in value in the last two years (which suggests that it is not in a cold spot) and you are already tied into a mortgage until next August. If you sell now, you will have all of the usual selling costs such as estate agents' and solicitors' fees, but you will also have to pay an exit fee for your mortgage. You need to work out how much that would cost. Then, the question is what you would do with the remainder of the proceeds. If you put the money in a savings account, as you suggest, you would have to tie it up for three to five years in order to achieve the best available interest rates - bearing in mind, of course, that inflation will be eating away at the capital at the same time. Interest rates are derisory at present and likely to remain so while the base rate remains at 0.5%.

Sorry to sound so gloomy but this is just a general reflection of what is happening in the economy. There are very few real safe havens these days for your money.

Isn't there an old joke about what you would get in you put 20 economists in a room? 24 different opinions. I am not an economist but in your place, I would stay put....well, at least until next August!

Thanks for your reply, and everone elses to.

I have decided that at the moment I am going to hold on to my money like you suggest and see what happens when I am out of my fixed term in august.

The place my girlfriend currently rents has loads of potential, in terms of extending etc, and considering I know carpenters/plumbers/electricans and builders feel that if I can get the house for the right price next year it could be a nice little project, that will yield some nice profits.
A few of the houses on her street have already had this type of work done to them so I dont think planning would be an issue.

So I think that will be something for me to consider next year.

[Jeannie D]

That sounds like a very sensible plan to me - good luck.

[Dan S]

Wales is fairly open to house price fluctuations, but all in all, I would do the maths based on your personal circumstances. Don't forget that what with property being such an illiquid asset, you'll eat into the profit made if you sell. You must factor this in.

Best of luck

[petercmfjohn]

I dont think so, As olympics is coming, it should be good to sale after olympics

[KarelM]

It's not that because it's valued 80K you'll get that amount... If you get the opportunity to sell it at this price I'd say yes... for less i won't and would keep on letting.

You're still making a small profit and since rent prices are increasing...