Quizzes & Puzzles2 mins ago
Should i sell my house
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For more on marking an answer as the "Best Answer", please visit our FAQ.I can offer some guaranteed advice from my experience of the housing market: you will not really find profitable information in the press. That's the one thing I can say for sure! "House prices set to rise!!!">well, it tends to be a company (like a building soc) doling out that kind of info. "Market about to crash!!!!">tends to be a paper trying to sensationalize for a little increase in readership. It's a very hard call to know where the market will go. This is to some extent independent of the decision to sell your home. Renting sucks. The market will come back at some stage anyway. Where else are you going to put your money at 5% for cash and a slightly dodgy equities market?
I play a lot of poker and see a lot of parallels between it and your current decision. You never have hard and fast information to act on: e.g. "prices will rise/fall." But you will probably lose money in the long term if you make decisions ill-informed of the odds. For example, I have 400K in cash (say), and I want to put it all in property. I do. Prices go up in a year by 10%. Was I right? No, I wasn't. They did go up, but the odds were against a rise.
I'd remember a couple of things before putting a ton of cash into the UK property market at the moment:
-UK average household non-mortgage debt is at �40K. Yes, that's �40K non-mortgage.
-The IMF, yes, THE IMF, has put the UK on a credit risk watch warning over the overinflated housing market. Watch out!
As others have pointed out, you haven't made anything on your house until you've actually sold it.
On the subject of a possible crash, well... it's a fact that house prices have increased out of all proportion to salaries, and more people than the mortgage lenders would ever want to admit have only been able to afford houses by taking out self-certification mortgages of perhaps six or seven times their actual earnings (with a self-cert mortgage you don't have to provide any proof of your income, so you just take the amount of money you need to borrow and divide it by three to get the salary figure that you put down on the application form).
This kind of technique only works while rates are low. When you've over-borrowed to the tune of five, six, seven times your real income, you don't have any breathing space if/when interest rates rise - and it can only take a small increase to tip you over the edge.
Sadly, these over-borrowers are largely the people who have been fuelling the ludicrous increases in house prices over the last few years. Unless salaries start rising rapidly (and there's no evidence that that is going to happen), my feeling is that, at best, prices will rise much more slowly than they have done recently. Stagnation seems more likely than big rises or a crash, at least in the short term.
If the Army is going to house you during your new posting, consider renting your house out. You get a three-year period of grace after leaving before capital gains tax kicks in and there are tax concessions for landlords, I have been told � ask an accountant on that one.