Tradefair & Financials
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Have offer on house but haven't seen anything I want to buy.
Let's keep the figures simple. £300k on deposit such that I can access the cash any time means around 300kx2.5%=£7.5k interest -after tax at 40% that leaves £4500 ie £375 per month
Cost of renting a housewhile looking around £1k per month.
So each month I'm down £625.
The pros are that
I become more attractive as a buyer so may be able to get more off the asking price.
If market falls, I get more for my money.
The cons are
I've two lots of removal expenses
I'm losing £625 a month.
If prices go up, I have sold my house for less than I could have got but have to pay relatively more for my new one.
What to do? If I don't move until I've found something I want to buy,I risk my sale falling though. If I move into rented, I could lose out financially big time.
Let's keep the figures simple. £300k on deposit such that I can access the cash any time means around 300kx2.5%=£7.5k interest -after tax at 40% that leaves £4500 ie £375 per month
Cost of renting a housewhile looking around £1k per month.
So each month I'm down £625.
The pros are that
I become more attractive as a buyer so may be able to get more off the asking price.
If market falls, I get more for my money.
The cons are
I've two lots of removal expenses
I'm losing £625 a month.
If prices go up, I have sold my house for less than I could have got but have to pay relatively more for my new one.
What to do? If I don't move until I've found something I want to buy,I risk my sale falling though. If I move into rented, I could lose out financially big time.
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Replies: 5
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I woudnt sit on 300K sterling for any longer than is necessary.
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So what would do with it, Harry ? Swap into , Sfr, US$?
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Id get back into property. Not that im bullish on the UK market, I just think the risks of not owning a house and keeping cash far outweigh any short term profit/saving you may make. Equally I wouldnt invest the money for my house in foreign currencies.
Just get on with finding somewhere you like and try to buy it at a fair price- then sit back and relax. |
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my thoughts are that your deposit interest rates are too low to sit in cash.House prices could move 2.5% in the blink of an eye.If house prices fall yours will fall but so will the ones you want to buy.Rise/ rise the flip side.Your " compensation " for selling is to lose 625 a month for an unspecified period of time.There seems to be a bit too much risk for a 2.5% return which is actually a losing return.
The other way to look at is say you lose for 10 months.Loss 6250.Can you get MORE than 6250 off the house you want to buy? If its a 400k house thats just 1.5% reduction.A "cash" buyer can often get a good deal in a buyers market. As a point of interest to compare to australia. deposit 300k x 7% interest less 35% tax= 1137 per month rent cost about 2000 a month loss 863 a month however 300k pounds is about 620k aud 620 x 7%-35% = 2350 per month rent cost 2000 profit 350 gotta love the aussie equation. |
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300k pounds is about 620k aud
Can i sell you some of my pounds at these rates please? |