My property crossroads

[Poppy]

Not sure what I want to do for the foreseeable future.

The outstanding mortgage on my buy to let property is £35,000. It is an interest only mortgage with 11 years left to run. Several years ago I stopped the investment vehicle to repay the capital (it was doing very badly).

There is a lot of equity in this property, I would estimate £125,000. However I do not see myself buying anything at present with prices teetering towards a fall. My intention is to keep the property rented out.

My question is how should I proceed?

Option 1: Should I pay back capital regularly directly to the lender?

Option 2: Should I start some sort of investment to repay the mortgage?

Option 3: Should I continue as I am and let inflation chip nicely away at the perceived value of £35,000? What will £35,000 feel like in 11 years? Will it feel like not such a big deal?

Option 4: Wait for house prices to fall and buy something with all that lovely equity?

Option 5: A combination of the above, but what combination?

I would certainly appreciate your thoughts and suggestions on the subject.

[Paul_f]

It really depends on one or two factors as nationally the market has been sustained in January following two poor months so prices are generally holding up!


Where is it located?
Is there a good demand for rental property in the area?
Does the rental income cover the mortgage and repairs?
Do you need the capital now?

[Poppy]

1. The property is in south (saarf) London.

2. In my opinion there is a good demand for properties to rent.

3. The income covers the mortgage approximately 400%. So far repairs have been acceptably low.

4. I do not need the capital now. The lender will want it theoretically in 11 years time.

[MrWoof]

As you don't need the income now, why not pay off some of the capital?