I am in the same boat of selling and have no intentions of buying in the short term. But it's not just my level of discomfort with the current prices of houses, it's actually how crazy rent v mortgages now are....
To keep things simple my home in Dublin monthly costs are
Mort (current) - 1400
Int relief - 130
Ass and Ins etc. - 51
Total outgoings ---- 1320 (and will increase in next few months)
Rent - 700 for a 3/4 bed house down the country - where I'm moving to.....
Don't know what little rent relief I'll get, but it's not much...
Thats a difference of 620 per month in the blink of an eye... Never mind the 4% interest that I'll get on the profit of my sale. --- Thats my personal cash flow perspective
The second reason is market driven -
Also, if I was to buy the house I own at it's current value I'd be paying over 2,000 of a mortgage for a house that would rent for only 1,200/1,250. That level of disparity is very worrying.. Was watching that "Property Ladder" programme during the week. A lady renovated a house and only made 10,000 profit based on valuations...
Sarah - the presenter - said renting may be an option. So they get agents in to give rent figures. I have my calculator out - average rent suggested, multiple by 12 divide by blah, blah, blah......... Before I'm finished Sarah says - your looking at close to 7% per annum gross...
From what I've read/seen in Ireland that is brilliant value - then I hear the clanger --------
We all know you need to be getting a 10% yield to be comfortable with renting, but 7% isn't too bad - but not great................................. In Ireland you are looking at 3 or 3.5% at best.. I'm happy to sit back for a while...