Housing Market - serious advice sought please.

Discussion in 'Current Affairs' started by Squirrel, Aug 29, 2008.

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  1. Good afternoon all,

    I'm just about to be drafted and have a few options as regards housing, just wondered what my dark blue brethren thought might be best option for me. Here goes:

    My current situation is that I've received my 2.5 year draft to an RAF base in Lincolnshire, I'm really happy with this as it's where Mrs Squirrel is based. Now, we have our own home about 30 miles away from said base, and she commutes every day, dropping off our two young children at childminders near base. We are planning to move into MQ's when I'm posted, as we'll get the full removals package due to my posting order. We are looking at upsizing our home, as it was bought before both kids were born, and it's getting a bit tight.

    As I see it, my two options are;
    1. Rent out our home via a letting agent, thereby remaining on the housing ladder at minimal cost to ourselves and sell up for a slightly bigger place at a later date.......

    2. Just sell our house, we won't be in a chain or anything, we then just buy back onto the housing ladder at a later date, maybe even proffing due to houseprices falling.

    Basically I am of othe one opinion, whilst Mrs Squirrel is of the other.....so we thought we'd see what other people thought.

    Any serious advice most gratefully appreciated.

  2. I reckon 1 might be safest bet.

    Within 2.5 years the economy may well have changed drastically and prices could have gone up again, so 'upsizing' may be even more costly.

    It's all a gamble though, and I'm by no means an expert on this sort of stuff.

    Hope you chose the right option.
  3. Don't forget Mr Taxman may well get involved if you take option 2. As you are not going to sea, investigate letting without using an agent. This is what I started doing after getting ripped off by my previous agent going bust. Go to a reputable solictor for a decent letting aggreement and save yourself 15%. That might even make option 1 cost neutral.
  4. Many have been caught out by selling and then renting. In the current housing market I think it would be better renting and using the rental income to pay the MQ rent.
    In days of yore if you didn't move house when drafted you could claim increased home to duties, is this still the case? A 30 mile commute is not to excessive, I used to go from Dilton Marsh to Boscombe Down and after I was drafted Dilton Marsh to Yeovil without too much stress. It may be worth living in your own house (much nicer than any MQ) and commuting.
  5. finger trouble!!!
  6. If you only have one house Mr Taxman will take a big fat zero. :w00t: Except of course tax payable on interest earned when said money is in the bank. :pukel:
  7. My current jobrole while I await my joining date for the mob is working reviewing independent advisors client files on sales they do. As a result I have to keep up to date on what the market is like and what the expectations of it are for the future.

    What you need to ask yourselves is;
    Can you afford to keep up the mortgage repayments over an indefinate amount of time if you cant locate a suitable tenant?
    Following on from this, If you have a lodger can you comfortably afford general maintanance and repairs on the house?
    If you sell now are you going to have to lower the price considerably from the price you paid and thus running into negative equity?
    If you rent the property now and come 2.5 years down the line the housing market hasnt recovered you may find yourself either having to continue to rent the house from afar or taking a loss on the sale.

    The way I see it the housing market is not going to see any signs of rebuilding for another year at the very least, added to that I doubt it will hit the boom prices we recently saw for another 5 years.
    This is purely my speculation and its an estimate based on current trends which could (unlikely) take an upturn. My advice would be to assess your affordability in both scenarios and go down the best/worse case scenarios. If you find yourselves struggling on affordability in one or the other scenarios then it would be best to opt for the alternative.
    If it comes down to purely an investment issue with no percievable monetary problems you may be best speaking to an IFA who would be able to give you some quality advice for a relatively small consultation fee.
  8. My bold. Agreed. Especially if HTD's are available. I have never ever seen a married patch I would be happy to live in. My sis lived in RAF MQs for years, and whilst they where miles better than Rowner and Budo, they where still a bit "Stalinist". :thumright:
  9. chieftiff

    chieftiff War Hero Moderator

    I think that ultimately this will be a lifestyle choice to be honest although in addition to Jinn's very valid points here are some more:

    You can currently get 10% gross on an instant access savings account add this to an ISA (6% net if you shop around) and your money will at least be growing) BUT... it costs to sell - think estate agent, home pack, solicitor etc and add it all up, it then costs significantly to buy again! you need to factor that in.

    How much will you get for a 60 mile round trip everyday? If Mrs Squirrel is claiming I assume a big fat zero!

    Some MQ's (I'm thinking SNCO quarters at RAF Cottesmore are actually quite good)

    Letting is going to cost you, upkeep and maintenance plus the credit crunch is making it difficult to inflate rental prices due to so much competition.

    I'd consider all the options mentioned so far -differential equation - solve it et voila, alternatively go with Mrs Squirrel's idea or you'll never hear the last of it if you get it wrong :dwarf:
  10. Serious advice from someone in the business - I can tell you the market is beyond terrible. If it helps my department has lost 50% of its staff in a year and that is not the end of it. Estate agents are going bust at an alarming rate. Things are desperate on the sale front, although I hear renting is going through the roof.

    Even if you want to sell, you may not be able to because the credit crunch is not just a phrase you hear on the news, welcome to my world where it is the reality between having a job and not.

    I would start by getting serious valuations in respect of what you can sell for and what you can get in rent. Don't forget your completely valueless HIP that will add £300 to the cost of selling - do not go through an agent, go through an independent HIP provider.

    Excuse the shameless promotion! www.wgconveyancing.co.uk
    or www.Hiphomes.co.uk
  11. Guys,

    That is all really good advice, thanks to you all, especially Jinn, Chieftiff and Rosie.

    We don't actually NEED to sell; we only have a small mortgage and a sizeable amount of equity, although that's one of the reasons we were wondering about selling...to save the equity before the value of our home plummets.
    From what you all seem to say, probably best to see about renting out....as long as the rent covers at least the value of the MQ rent, we'll be no worse off.

    We could stay in our home and commute as some suggest, but the daily return journey is taking its toll on the kids to be honest, so we wanted a solution that would give us more time during the week as a family; moving into MQ's would give us that.

    Once again everyone, thanks very much.
  12. Right. Until a year ago I had been working as an estate agent in the midlands for eight years. I lost my house, car, job etc because of the state of the housing market.

    The thing you need to consider is that the market, over a decent period of time, will always go up. We aren't making land anymore, builders can't build enough houses and we have a growing population. All is good.

    However, and here is the catch, there will always be peaks and troughs. Normaly over a twenty year period. Can we all remember the state of the market twenty years ago?????

    Now is a great time to buy. Loads of sellers needing to sell and loads of repos. Think long term. Buy freehold.

    Kind regards.
  13. witsend

    witsend War Hero Book Reviewer

    Could put your home on the market, hopefully get a sale at a price you think is fair. Move into a MQ once the sale goes throught and search for a home whilst the market is still dropping. Having never lived in a MQ I have no idea how long it takes to get one.

    Good luck.
  14. Squirrel,

    You've obviously had some good advice from people who have more in depth knowledge than me, but from my own experience I would advise to never drop out of the housing market. I did, in the early 90s, because the market was dead and then immediately 'lost' over £35k when it picked up again about a year later. We put the small profit we had made into ISAs etc but with a young family, soon found we had to dip into these for any number of reasons and basically ended up starting all over again when we bought our next place.

    If you do decide to rent then watch out for the hike when/if you shift into the higher tax bracket - its a big jump. Whatever you do, best of luck!
  15. shippers

    i would definitely say rent it out - i have quite a few on "buy-to-lets" and the rental market is extremely bouyant at present. whilst we still build less than teh required 200,00 new homes every year teh pot gets maller every year. combined with buyer apathy means tha when one of mine became available due to my teneant getting preggers we had 4 viewings, 3 offers and an in-dtae 9 days after teh outmuster.

    my only tip is to undercut the market by a little bit. yes you lose a bit each month but if your tenant stays put for a long time then this over-ompensates for any empty periods and higher rent.

    my final tip is to speak to rutland council - here teh council will pay 1, upfront for a year and 2, cherrypick the tenant. now i know that getting DSS in can eb daunting but most councils are so desperate that they will only pu the best tenant in so as not to pi$$ off teh landlord. i have 4 DSS ladies/couples and they are A1 and only there due to extraeneous circumstances.
  16. sorry for spelling mistakes - frascati effect is now kicking in
  17. You could go back and edit them!
  18. some more top advice there shag-shacker, thanks very much. As it happens, our house is in Ryhall, which comes under Rutland Council.
  19. i kood do i cuppoze but then it woodn't hav givan gud peeple like u the chance to bild up a hi post kownt corekting peeple like mi
  20. Home purchased 1972 £3k now £146k
    Money invested 1994 £48k now £31k

    Stay with the bricks and mortar
    At thirty miles distant you can still keep an eye on your property

    (Mine in 74 when phone calls were bookable from abroad,three days in advance and cost a days pay, bank statements sent by post quarterly,
    Only to find nothing had been paid in!, Lawyers letter, cost a weeks pay, lawyer to visit home two weeks pay, To find totally empty home, all the furnishings had gone as well as nil rent)

    At the moment house prices have crashed, so you may not make what you have paid if you sell up, and certainly in a couple of years they will have increased in price by about 20% when you want to buy in which is more than any interest on investment you have made Unless you take high risk stock market route and could end up with nothing

    IMHO take the rent out route, keep an eye on your property and payments into account,
    Rent it FURNISHED or you can not get them out again

    Nice living in your own home, but as you say the commute would take two hours out of your family life each day

    Good luck with your venture whatever route you take

    Jack McH

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