Cutting ties

28 03 2011

When we left the UK three years ago, it had been our intention, at that point, to probably return. So the house that we owned was put up for rent and we changed to a buy-to-let mortgage.

Those three years are now up. And the bank is telling us we have to take a new mortgage product to allow us to keep renting it out.

But it also appears that they’ve had us on a phenomenally low rate. Possibly one we shouldn’t have been on.

Imagine our surprise/shock/horror when we rang up for a new quote, only to be told our monthly payments would be going up by £400 a month. That’s a lot by anyone’s standards.

So we have been forced to a crossroads. We didn’t believe our new mortgage was a fixed term. We thought it was ongoing. But it apparently isn’t. We thought we’d have the benefit of our low rate until the Bank of England decided to increase interest rates again. But we don’t.

The new mortgage payments are covered by the rent, but it doesn’t leave us much room for manoeuvre if anything goes wrong. But it’s not costing us anything either. And if it’s not costing anything, why get rid?

But is having the house also a noose around our necks? Being a landlord in another country is hard. You haven’t got the same control, you don’t have cash automatically coming into your account with which to make mortgage payments. Or to pay any bills. You’re not there to sign any paperwork.

But then there’s the housing market. Our next door neighbours have both got their houses on the market, which probably isn’t a good look! But one has sold (and quickly). So is there hope?

It’s one of the hardest decisions to make. We always thought we’d dictate the timing of when we got rid of it. We thought we’d hang on to it for a few more years. But the bank has backed us into a corner and now we’re in fight or flight mode (keep or sell).

My natural instinct, like a caged mother tiger, is to fight for my house. To protect my rung on the property ladder. Regardless of where it is in the world. But hubby says some sensible stuff too. We’re not planning to move back to the UK, let alone this part of it. So why bother keeping it? Why not release release the equity and stick it in savings so it’s ready when we need it. When we want to buy here?

Not the nicest decision to make. And mentally it feels like we’re cutting our ties with the UK. It makes the move seem even more permanent. Even though it was always intended to be. But the psychological things are bigger than they seem.

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31 08 2011
Is this the beginning of the end? « My Life in NZ

[…] in March, we decided to put our UK house on the market that would sever the single largest physical tie to the UK. The housing market was rough, we knew […]

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