Sell To Rent
With UK propety prices falling between 2.5% and 3.3% during the last year (and 1% during June 2008) the trend for ’sell to rent’ properties looks to be on the increase.
‘Sell to rent’ involves selling your property, rent another property while prices fall, and finally buy another property while prices are at their lowest ebb. Abbey say that 827,000 borrowers planed this route in the near future.
The only problem with this scheme is that with mortgage lenders not giving the number of mortgages out the number of suitable rented properties will be down, therefore the prices for rented accomodation will rise meaning you pay more for the same rented property. And of course at the end of the day you are still paying someone else mortgage!
Another problem with sell to buy is how long will this period last? and When can I buy again without losing out? Property experts consider 3-4 years to be the expected duration however I believe this is too much.
There is no magic way out of the present downturn, apart from staying put. While you should never pay more for a property than its market value, a house is an investment in the future rather than money in the bank. So selling, expecting further falls, is a short term measure!
If you are paying someone’s mortgage then whats the point? This sounds like an estate agent thought this up, theres no way of getting round it the market is dead.
Comment by Tom Gardens — 24 September 2008 @ 11:49 am