Buy to let?

[DubFan]

..............

You have misunderstood....
Sorry I meant we only have half of the value of our house left to pay,  So large equity

160k house with only an 80k mortgage

Ah, right.

If you're close to a river, seems like it would be best to hold onto it for the moment and then I guess your options are to at least wait till the summer and try to sell again, you may not make any more money but at least you'd get it sold or get it rented out and hope that it doesn't lose any money in the long term.
Are you sure you've got the pricing right? My friends had their place on the market for a year with no buyer before they dropped the price significantly and sold it in a couple of months.

Even if it's not on the flood plain some people will just look at a map and see that it's close to a river and discount it.

[ROO1]

We sold it twice both within 1 week

[Diamond Hell]

You will need to negotiate equity release from your current house to buy another - you're letting to buy, not buying to let.  As such you will need a let to buy, not buy to let mortgage - there are differences.  You need to be realistic on the value of your house - surveyors will define it, not your asking price.  The value will be set by recent equivalent sales, not what you think it's worth.

So long as you go into this with realistic expectations you should be fine.  Accept that there are three different types of tenant:

1. Morons who think landlord are assholes.
2. Assholes who think landlord are morons.
3. Chuff

The first two interchange at will.

If you can get into another house using your equity then it's a sound investment and one that should deliver a good pension in the long term.... maybe.

[xxChrisxx]

As much of a good investment this could potentially be, it's a good idea to stress test your finances.

You don't want to find yourself shafted if anything goes south. I remember a couple of months back some talk of private rent controls. Its just idle talk atm, but its not beyond reason that regulation of the private rental market could make a comeback.

[Diamond Hell]

but its not beyond reason that regulation of the private rental market could make a comeback.

You realise that Labour isn't it power and that sort of thing went out with the ark, right?

Far more likely is a rise of several percentage points on the base rate.  See what that does to your figures.

[dubber36]

Flooding or the thought of potential flooding can make people do irrational things.

Why do you want to move? Do you want a bigger house, or have you got your worries about possible flooding? If it's the latter and you rent it out, you'll still worry about it when the river gets high, even though there are none of your things in it.

Personally I'd stick it out and hold out for a sale and move on. Even if it means selling and moving into rented in the short term before you find a new house. You may need to take a little less for your house, but with nothing to sell, you will potentially get any shortfall back by being in a stronger negotiating position for the new house.

Whilst £80k might seem like a fair amount of equity, it's not that much if you share it over two properties. "Buying" a second house may stack up on paper providing that things go well, but it will mean that you will owe a considerable amount of extra money. If you struggle getting tenants due to their concerns about flooding, you make struggle to fund the debt.

You can make your house more saleable by putting flood defenses in place. Flood doors and covers for air bricks needed cost that much, but it could ease potential buyers minds.

[DubFan]

As much of a good investment this could potentially be, it's a good idea to stress test your finances.

You don't want to find yourself shafted if anything goes south.

^ This.
A number of years ago, we rented a house from an aquintence who was looking to rent out the house but they hadn't done their maths properly. They set the rent too low, then one of them changed to a lower paid job and after 9 months in the house we were told that they *had* to sell the house because they couldn't afford to keep it going. I've heard this happening to lots of people in recent years.
A friend of mine had a house on the south coast that was empty for 9 months, and although he didn't have to pay council tax and some other bills while it was unoccupied, he still had to cover the mortgage while also paying for the place he lived in.

If people are renting a house, I think they'll be less bothered about the river so long as you can assure them that it hasn't flooded.
Is the value of the house going to go up or down with it being close to the river and the fact that flooding has become more of an issue in recent years? IE, is this a sound investment property?

[dubber36]

IE, is this a sound investment property?

That's why I'd be looking to get out of it and move on to something you are more comfortable with.

[xxChrisxx]

but its not beyond reason that regulation of the private rental market could make a comeback.

You realise that Labour isn't it power and that sort of thing went out with the ark, right?

Far more likely is a rise of several percentage points on the base rate.  See what that does to your figures.

^_^ This was what I meant. Interest rate changes, what happens if it doesn't rent for a few months, etc.

A cross party bill had it's first reading in parliament a few months back discussing rent controls on private rental properties iirc.- As I alluded to before, I doubt that this bill will get any traction. Yet consider the increasing fuss people are making about first time buyers and decrasing home ownership, and some of the backlash seen even in this thread.

Long term, it's not beyond the realms of possiblity support will increase ultimately leading to regulation creeping back. Even then it's not going to sqeeze all the profit from the business, but still.

Always have an exit strategy.

[simonpolly]

I recently found out that you still have to pay council tax on a empty second property. Something to bare in mind if the house is empty for a while.