Equity release for pre-dip warchest

[jonesey]

Evening all, I would very much appreciate some opinions on a vein of thought I am currently working on.

Rightly or wrongly, I have started to tweak my finances toward a defensive view as a result of my own belief of an adverse market event on the short term horizon - this, I appreciate, is a devisive view but for the sake of this thread, let's assume this is the case.

I have a couple of properties in the south-east, both at approx 55% LTV and both rented. I am considering, given my macro opinion, whether to remortgage (coming off fixed in January) at 75% LTV's in order to park that released equity in cash ahead of said economic event.

The idea is that I want to monetize latent/built value before it evaporates through a downturn, in order to maximize capital now for redeployment in a depressed market, given my view of Lon-term property value re-build.

I understand that time horizon is key and I have to consider future cash value with inflation etc but with a more positive rate outlook, perhaps this will swing. I have the appetite weather this I believe.

So- terrible terrible idea or just too many variables for a reasonable response?

Lj

[WindyCommon]

What do you mean by an "adverse market event"..?

[rotarymazda]

jonesey said:

Evening all, I would very much appreciate some opinions on a vein of thought I am currently working on.

Rightly or wrongly, I have started to tweak my finances toward a defensive view as a result of my own belief of an adverse market event on the short term horizon - this, I appreciate, is a devisive view but for the sake of this thread, let's assume this is the case.

I have a couple of properties in the south-east, both at approx 55% LTV and both rented. I am considering, given my macro opinion, whether to remortgage (coming off fixed in January) at 75% LTV's in order to park that released equity in cash ahead of said economic event.

So you want to extract equity whilst you can to prepare for a crash.

Best to be debt-free with cash available if a crash happens.

So reduce your leverage by selling one or both rentals.

[Blatter]

rotarymazda said:

So you want to extract equity whilst you can to prepare for a crash.

Best to be debt-free with cash available if a crash happens.

So reduce your leverage by selling one or both rentals.

That seems a better way to go, rather than increasing debt by remortgaging.

[NickCQ]

Blatter said:

rotarymazda said:

So you want to extract equity whilst you can to prepare for a crash.

Best to be debt-free with cash available if a crash happens.

So reduce your leverage by selling one or both rentals.

That seems a better way to go, rather than increasing debt by remortgaging.

Yup, if you want to reduce your exposure to property, sell the BTLs rather than leveraging them up.
Unless of course your debt is non-recourse and your plan is to hand the keys back to the bank if everything goes tits up. But that probably isn't the case.