An Englishman's home.

[catullus]

So many people that I talk to at present simply will not consider a sale of their home as part of the process of addressing their debt issues. Whilst I understand the emotive issue of wanting to own your own home, and staying on the property ladder, in many cases I cannot help thinking that keeping the property is the wromg decision.
Consider the following

1 Property prices may keep on rising at astronomical rates but my guess is that we are in for a period where prices will level out or may even fall, temporarily. Salaries just can't keep pace with these rises, and at this rate there will be noone to buy.
2 On the other hand with so much buy to let property out there landlords are struggling to get market rent meaning that rented property is likely to be better value.In addition you save on maintenance costs which are normally the landlords responsibilty.
3 Many people are currently locked in to fixed rate mortgage deals which are about to end and payments are likely to rise substantially.
4 Property values may or not rise but interest will definitely continue to accrue, and probably at a much faster rate than any gain on the equity.

Of course all of this is a generalisation. Much depends on regional issues, personal circumstances and the size of the equity in relation to the debt.

In addition, I may be an IP but my financial crystal ball is no better than anyone else's as far as the property market is concerned, but I have seen so many people make the decision to soldier on trying to protect their "prize asset" when in reality its a mill stone round their necks.

I'm off on leave this afternoon so won't be able to contribute to the debate that I hope this will provoke, but at least I hope that it will encourage people to consider the issue!!

[Oliver]

It's an interesting point, people in the UK do seem to be more concerned with being on the "property ladder" than many of our European cousins who are often happy to rent.

Best Regards
Oliver

Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at: www.thomascharles.com/about_us.asp

[tigger]

Hi,

First post here!

I’m 8 months into my IVA and took the bold decision to sell my house (naturally with the approval of my IP) and move into rented accommodation. A good chunk of the equity is going into the IVA which is what I expected anyway.

My decision to sell was based purely on lifestyle considerations as opposed to the national obsession with being on the property ladder. To summarize, myself, wife and 2 children will be moving from a cramped 2 bed terrace (no garden) to a larger 3 bedroom house (with gardens) in a better area, with zero impact on our outgoings. In fact we will be slightly better off if you take into consideration the recent base rate increases! [:)]

Take care,

David

[MelanieGiles]

I fully concur with Catallus' post - and it is good to see if working in practice for your Tigger. I see so many people whose primary concern is to keep their house, that they lose sight that it is largely owned by their mortgage company. Indeed with the advent of high secured lending, they actually don't own it at all and are paying much higher than they would to rent.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[jane.l]

I totally agree, we "owned" a 3 bed rundown terraced house, that, with the secured lending, cost us over £1000 per month, now we rent a 3 bed semi, with 3 bathrooms and double drive and garden for just over £500 per month! I do feel a bit stressed cos its not permanent but I do like it!

[fingers]

Afraid i'd have to disagree, it was hard enough for me to get a 1 bed house at a year agos rate that I brought for 105k.

If I was to buy a property like this now it'd be around 123-125k - and theirs no way that they'd lend a single person that amount of money. Meaning i'd have to save years before been able to get on the market!

There is one big disadvantage too I know in this area most of the renting is done mainly from two companies. Both would require at least 6 months upfront because of my advise credit history since starting DMP, then just recently the IVA. Personally, I wouldnt be able to get anybody to lend me that money for renting.

I think its each to their own and whatever they feel comfortable with. Im still glad I got my house now, as I may never have got on the property ladder otherwise.

[kellym]

I can see an argument for both sides (talk about sitting on the fence!) I myself could rent for a few years as I am only 29 however my hsband is 41 and if we rented for 5 years he would find getting a mortgage in terms of years quite difficult so we will have to stay on the property ladder now or we would be renting for life. The £1000 a month on a mortgage scares me a lot though and i wonder if its worth it.

Smile it makes people wonder what you have been up to!

[Adam Davies]

Hi
I purchased a property six months into my IVA and the equity that I made in two years enabled me to settle my IVA, so for me house ownership is very important.The secret is to have just a mortgage and nothing else !!!
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[lily]

I think that there is a huge difference in choosing to rent and facing the prospect of being thrown out of the home you put everything into and facing the unknown with a poor credit rating, especially when your little ones are settled into schools and have friends. Then there is the problem of prying neighbors and so called friends??? If I won the lottery, I would buy a house though and have all the bedrooms and bathrooms I could afford, I would even have an annexe for my young teenager. In an area much less remote. I would'nt have any credit and would keep a pot of money in order to fix anything that went wrong. Wouldnt we all???

lily

[Helhan]

Hi Lily
I agree about the choice aspect...one thing choosing to rent, another being forced out of a home you may have lived in and loved for many years.
We have moved around quite a bit (5 houses in the last 12 years) which has been partly responsible for our high level of debt. No matter where we have lived though, we have always made it feel like home, by putting up favourite pictures, letting the kids choose their decor etc.(and spending money on furniture/appliances/gardens etc!!) so if we did end up having to sell,although we would be really upset because we love the house and street we currently live in, we would try and start afresh elsewhere. At the end of the day, for me anyway; the bricks and mortar are simply that, and the real heart of the family are the people that are in the home.
If we won the lottery we would definitely have a separate grown-up bathroom, and probably a large swimming pool in the garden! (I can dream can't I?!!)
Helen

[lily]

Me too, although I rent I had to move cos of family circumstances and its the biggest factor to my debt problem. I make the most of everything, never know whats round the corner, some people cant choose to walk, run or even talk. We are the lucky ones. I really hope you get to keep your house Helen. We can dream tho cant we?? It what life is all about.

lily

[Soulgrowth]

I was interested to see Andie's reply. I am hoping that the same will be true for me. In one year of a successful IVA my property has increased in value enough for me to, hopefully, offer a full and final settlement (please everyone keep their fingers crossed for me as recent unexpected events looked to be putting me on the verge of bankruptcy).

In one year I will hopefully have gone to a position of having around 20 direct debits coming out of my bank account ... to four ... the major one being my mortgage and the second major one being my mortgage protection policy!

I hope I am not breaking any forum rules by doing this but I just had to fly the flag for these people who have been terrific http://www.bankruptcy.co.uk/index.html# ... give them a call and ask to speak to Michael

Debbie

[lily]

Good luck debbie

lily

[Adrian Ratcliffe]

Hi all,
My mum and dad never drank smoked or had a mortgage they bought there first house for £346 (loaned from my dads parents) in 1962 a 3 bed semi with no garage (my dad built 1) to house a black van (£45) with a starting handle which (the black van) never saw the garage and had to be bumped to start every morning.
In 1973 they sold it (£6000) and bought a 4 bed semi (needed a bit of work) around the corner for the same.
They still live there and it's worth £220,000.
So if you don't drink or smoke or take any credit it can be done.

I’m his son I did smoke I do drink and did credit

Hi all,
My mum and dad never drank smoked or had a mortgage they bought there first house for £346 (loaned from my dads parents)in 1962 a 3 bed semi with no garage (my dad built 1)to house a black van (£45) with a starting handle which (the black van)never saw the garage and had to be bumped to start every morning.
In 1973 they sold it (£6000) and bought a 4 bed semi (needed a bit of work) around the corner for the same.
They still live there and it's worth £220,000.
So if you don't drink or smoke or take any credit it can be done.

I’m his son I did smoke I do drink and did credit

I bought a house in 1987 paid £11,000 sold in 1990 £38,000 couldn't buy anything had to live with parents and girlfriend because I borrowed too much to do it up. Saved deposit bought terraced house in 1992 for £88,000 market cashed sold this in 1998 for £39,000 bought detached bungalow with shared drive £53,000 market turned up spent stupid on cards remortgaged to finish ended up with second mortgage tried to buy 2 other houses on buy to let failed on them sold them on got IVA for £105,000 owe £190,000 on my mortgage and second house worth £220,000 I pay £2000 a month my dad pays nothing.

Point being every 10 years your property will double in value.
Rent=?


Nice if you have never needed credit.
Your views please.
Regards
Adrian

[Adrian Ratcliffe]

hi,
don't know what happened there it double pasted.
The terrace house bought in 1992 was sold for £39,000
Adrian