De-chaining ourselves when moving home - any downsides?
Discussion
We're giving serious consideration to selling our house and staying with relatives for a number of months, while we find our next home. The reasoning being that both selling and buying chain-free puts us in a stronger negotiating position. We live in a city that has a very competitive housing market in our area.
Are there any financial downsides to this approach? My current considerations:
- We have a mortgage with no early redemption charge.
- Lower living costs with relatives will more than offset our storage costs.
- Our equity will be split into monthly interest paying savings accounts below the FSCS limit.
- We currently have a BTL property on an interest only, BTL mortgage (is this relevant?)
- We've used Nationwide's affordability calculator to determine our budget for our next home, but will obtain a DIC prior to putting our home on the market, with the above assumptions provisioned.
Am i missing anything that could leave us in trouble?
Thanks for any replies!
Are there any financial downsides to this approach? My current considerations:
- We have a mortgage with no early redemption charge.
- Lower living costs with relatives will more than offset our storage costs.
- Our equity will be split into monthly interest paying savings accounts below the FSCS limit.
- We currently have a BTL property on an interest only, BTL mortgage (is this relevant?)
- We've used Nationwide's affordability calculator to determine our budget for our next home, but will obtain a DIC prior to putting our home on the market, with the above assumptions provisioned.
Am i missing anything that could leave us in trouble?
Thanks for any replies!
There should not be too much risk on the downside. As you say, you will be attractive to sellers, not having the complication of a property to sell.
There is the possibility of an upside for you though.
This obviously varies in nature with different parts of the UK, but it is possible that you might be lucky and hit the 'bulls-eye', at some point after completing the sale of your home. The UK domestic property market is now clearly a bubble on a bubble. As an example, a family member is a first time buyer and has had an offer accepted at almost £600,000 for a home suitable for parents and children, plus goodness knows how much extra for Stamp Duty (being above the first-time buyer scheme limit). Admittedly that is in Surrey, but it does illustrate how ludicrous prices have become, in relation to incomes. Their timing might prove unfortunate, but they are prepared for a price crash and interest rate rises, however, obtaining stability for the family instead of continuing with short-term renting, is more important for them now.
If the inevitable price fall does happen to coincide with your own timing, you will be very pleased. No one can forecast when though, and history has shown that economic collapses are often triggered by unforeseen events, but good luck to you. Your plan might work out very well.
Need to get on well with the host relations.
Edited by Jon39 on Sunday 12th August 22:16
We are just in the process of doing exactly the same, just waiting for an exchange of contracts/completion on ours and will be moving in with parents.
We've still managed to somehow lose out on one house we've offered asking price on to someone who is in rented already and needs no mortgage. Quite unbelievable really as it's a quirky house which we thought we could get at maybe 5% off asking.
Only downside is yours/the wife's sanity depending on whose side of the family you're moving in with!
Our plan is to make some silly offers on a few our of our budget and hope we find someone desperate to move
We've still managed to somehow lose out on one house we've offered asking price on to someone who is in rented already and needs no mortgage. Quite unbelievable really as it's a quirky house which we thought we could get at maybe 5% off asking.
Only downside is yours/the wife's sanity depending on whose side of the family you're moving in with!
Our plan is to make some silly offers on a few our of our budget and hope we find someone desperate to move
How can not being in a chain be any worse than being in a chain? Breaking one b
d transaction into two simpler ones seems like a no-brainer to me.
Some neighbours have just done this, though differently - buying a new house before selling the first. Not everyone has that much financial muscle though.
d transaction into two simpler ones seems like a no-brainer to me.Some neighbours have just done this, though differently - buying a new house before selling the first. Not everyone has that much financial muscle though.
Jon39 said:
There should not be too much risk on the downside. As you say, you will be attractive to sellers, not having the complication of a property to sell.
There is the possibility of an upside for you though.
This obviously varies in nature with different parts of the UK, but it is possible that you might be lucky and hit the 'bulls-eye', at some point after completing the sale of your home. The UK domestic property market is now clearly a bubble on a bubble. As an example, a family member is a first time buyer and has had an offer accepted at almost £600,000 for a home suitable for parents and children, plus goodness knows how much extra for Stamp Duty (being above the first-time buyer scheme limit). Admittedly that is in Surrey, but it does illustrate how ludicrous prices have become, in relation to incomes. Their timing might prove unfortunate, but they are prepared for a price crash and interest rate rises, however, obtaining stability for the family instead of continuing with short-term renting, is more important for them now.
If the inevitable price fall does happen to coincide with your own timing, you will be very pleased. No one can forecast when though, and history has shown that economic collapses are often triggered by unforeseen events, but good luck to you. Your plan might work out very well.
Need to get on well with the host relations.
How is a 600k family home in Surrey proof of a ‘bubble on a bubble’ for goodness sake? This has been happening for over a decade now.
Edited by Jon39 on Sunday 12th August 22:16
Thanks all for the replies, we'd be staying with my wife's sister who lives alone, and have a < 1 year old baby and cat in tow! Fortunately she has plenty of space for us and is besotted by her niece! I think we'll have a scheduled "health check" with SiL each month with the understanding we will rent somewhere if we end up being too imposing, and no house purchase is in sight.
keirik said:
We also found a remover/storage company who did the whole packing, move to storage, then receiver and unpack from storage for one very reasonable price which removed even more stress.
We've had this sort of service recommended to us, it seems less stressful and compared to paying for 2 moves to and from storage, not significantly more expensive.[quote=Simbu]Thanks all for the replies, we'd be staying with my wife's sister who lives alone, and have a < 1 year old baby and cat in tow! Fortunately she has plenty of space for us and is besotted by her niece! I think we'll have a scheduled "health check" with SiL each month with the understanding we will rent somewhere if we end up being too imposing, and no house purchase is in sight.
Reminds me of that old one: wife asked where I'd like to be buried: apparently "balls deep in your sister" wasn't the right answer
Back on track though: we effectively did that in the early 90's, albeit without the need for relatives: a friend was keen to buy my terrace, wife (gf back then) was renting, so I moved in with her.....& over the next year we went from looking at 3-bed semi's to small 4-bed detached as the prices plummeted!
Got ourselves a far nicer place!
Of course a bit later we then had a year where the mortgage (standing order back then!) had to be modified EVERY month, going from somewhere around 7% up to 15% at the peak....yikes!
If I were you, I would absolutely do that: in the current climate, I cannot see prices rising dramatically (of course there could be exceptions) & it makes you VERY attractive to other vendors - use that power to negotiate!
Reminds me of that old one: wife asked where I'd like to be buried: apparently "balls deep in your sister" wasn't the right answer
Back on track though: we effectively did that in the early 90's, albeit without the need for relatives: a friend was keen to buy my terrace, wife (gf back then) was renting, so I moved in with her.....& over the next year we went from looking at 3-bed semi's to small 4-bed detached as the prices plummeted!
Got ourselves a far nicer place!
Of course a bit later we then had a year where the mortgage (standing order back then!) had to be modified EVERY month, going from somewhere around 7% up to 15% at the peak....yikes!
If I were you, I would absolutely do that: in the current climate, I cannot see prices rising dramatically (of course there could be exceptions) & it makes you VERY attractive to other vendors - use that power to negotiate!
Personally I think the only downside is living with your parents again or any relatives.
Mrs G and I did this a few years back and we both love my easy going parents. But after 6 months we had to get out. Lack of privacy, just doing what you want and not having to consider others - trust me, you’ll miss that after a while
Mrs G and I did this a few years back and we both love my easy going parents. But after 6 months we had to get out. Lack of privacy, just doing what you want and not having to consider others - trust me, you’ll miss that after a while
Edible Roadkill said:
I couldn't live under relatives no chance it would be carnage. If you think it'll work go for it.
I once moved out my house into cheap rental for 6 months while I waited for a house to be built. That was ok, double the moving was a bit of a pain.
I have exactly this experience too. Not planning on moving for about 15 years, maybe more, but will certainly go down this route again.I once moved out my house into cheap rental for 6 months while I waited for a house to be built. That was ok, double the moving was a bit of a pain.
Gassing Station | Finance | Top of Page | What's New | My Stuff