Thoughts...

[Jasmina]

Would you rent out a room (as a single parent) or sell up and move somewhere smaller / elsewhere / with a much smaller mortgage and have the place to yourself?

Or, if possible.. buy a small one bed to rent, then a small 2 bed to live in with baby.

Thoughts..

[lane lover]

You shouldnt really sell a property in London at the moment. London is a good long term investment, and you arent likely to get a decent price in the current market due to low availability of mortgages (high deposit/equity needed). However, if you were to be a seller/buyer - you have the advantage of selling and buying in the same depressed market.

I wouldnt sell up and rent. Rent in London at the moment is quite high (and increasing) due to the low availability of mortgages. For example, I am paying less than two-thirds in my mortgage currently, compared to the rent on the same type of property. I only have 20% equity.

I would hence rent out the room, but to someone you know that you can rely on (i.e not a stranger, maybe a friend of a friend). I believe its a much better financial decision in the long run.

[Bunny19]

If your budget is around half a million and you are looking at staying in ED, the latter

[Jasmina]

Thanks lane lover and bunny19.

Sadly my budget is not that healthy..

However, I have just had my place valued and the estate agent quoted the same price as to what I was quoted when the housing market was booming! But I do need to speak to my mortgage advisor as I'm not working full time any more, but do have fairly `healthy equity in my property. So thought if I moved somewhere nearish - brockley, sydenham, honar oak - i'd still benefit from living in London (I still need to go to work) and be able to rent out the smaller property to pay mortgage on the 2 bed... In theory!

I'll put feelers out to mates to see about renting the room - good idea! I just had concerns as I've got a baby... Would anyone really want to live with a baby (that's not theirs)?

[woodland]

I would do some research into properties in the areas you mention as the prices are not as cheap as you may think. Ex council flats are a good buy as they offer a lot more space if you have children. I am not sure that you wodulfind many people willing to share wih a small child unless unless you offered very cheap rent.

Good luck with whatever you decide..

[Penguin68]

Being a residential landlord can still offer returns, but you need to be sure your tenants pay up promptly and are credit-worthy, and be aware that you will hit 'unexpected' expences - tenants expect you to keep the tenancy in good order, get things repaired etc. - they won't (often) do the 'little' things about the house that you would as an owner - but expect you to. And if these things are left undone - then the property deteriorates and loses value. This is an issue if you are cash-strapped, as these problems are difficult to plan for (you can claim them against your income, but you still need to pay for them up-front).

If you buy a flat from a council or housing association (or any property where you aren't the ground landlord) - make sure you know what your commitment is as an owner to major fabric repairs (roofs etc.).

Take as much advice as you can - plan your income and outgoings to ensure that you have cash reserves to meet contingencies - i.e. treat it as a business - not as an investment.

[shen]

Hi, I was lucky enough to find a lodger who I sort of already knew when my son was younger (about 3). I charged him a bit less than going rate to make up for noise and sleep interruption, but it definitely helped with the bills and mortgage. It also meant that when my lodger was in I could pop out for milk or anything like that once my son was asleep. My lodger is leaving in a month or so after 27months with us. My son will miss him, and I think my lodger will miss my son too so it can be mutually beneficial.

It was a way I could stay in the area and keep my house. I say go for it.

[BigED]

You could try renting a room through www.mondaytofriday.com - renters only have use of the room from mid-day on Monday to mid-day on Friday and the place is yours for the weekend. Obviously you need to commit to cleaning their room and changing sheets etc before they return, but it works well for a friend of mine. You don't have to provide meals or food - just cooking facilities and fridge/supboard space. It suits people whose work requires them to be in London but who, for whatever reason, live beyond normal commuting distances. For them, a big consideration is the travel to work time. East Dulwich works pretty well for people working round London Bridge or parts of the City and Docklands. And if your advert mentions the fact that a baby is in the house then people for whom that's a problem wouldn't bother getting in touch.

[Aladam888]

I agree with the rest, having a property on your name is a a strong point on your side, it give you security. So you should better rent out and that too after good consideration to the tenant's reliablilty:)

[womanofdulwich]

your best market for the room would be a nanny with a live out position- you MIGHT get a reduced rate in exchange for her babysitting one night a week?

[Jeremy]

If it's possible to downsize and live mortgage free, I'd do that.

I don't think a tenant and a baby would be a good combination, and if you're not working full I think the security of owning your place outright would be pretty appealing.

[womanofdulwich]

when I first came to London I rented a room cheaply - about 40% less than the going rate and babysat one night a week- mid week. I think if you targeted the right place you could do well - I have also met au pairs who "lived Out" from thier family at another family owned house. Moving house costs so much money.

[Jasmina]

Thanks so much everyone for all your food for thought.

Moving is sooo expensive, yet owning a property nearly outright is appealing, but the idea of downsizing is not. Living in ex council is also not appealing.. Maybe I've got too used to living in an Edwardian property in a tree lined Crescent..

Seems most support the idea of renting out to someone.. I've toyed with the idea of Monday to Friday as that would be ideal. I think i'll post an ad and see what comes back... Also like the idea of au pair / nanny - I'd not thought of that so thanks WofD.

Penguin68 - Thanks! useful info.

[northlondoner]

My single mum friend in Islington has just started renting out her spare bedroom to foreign students through an agency. Seems to be working out fine, so far.

[dulwichgirl2]

Jasmina, the first 90 (?) pounds per week rent is tax free if you rent out a room, in case you did not know this.

Be careful of renting out one place and living in another. You will have to pay tax on the rental income (mortgage costs deductible Of course) but I am not sure if your rental costs in the second place are also deductible. Think also of agent fees, both houses, moving fees and hassle.

Good luck.

[EPB]

And don't forget the biggest cost of all - Stamp Duty on your purchase.

[Jasmina]

Good idea NorthLondoner!

DulwichGirl2 - useful info re the first ?90!

I think I'm ditching the idea of selling and now researching my options in staying put. Mon-Fri let, foreign students and short lets all look like good options.

Thanks everyone!