My partner and I went through something similar a couple of years ago. He thought it might be a good idea to sell while prices were high, but I was nervous about losing the security of our home. We ended up talking to a financial advisor and doing some research.

Agree with most on here.  If the gamble is to get upside then you need to consider:

- Stamp duty and refurb costs to get back into market
- Are you intending to stay in the same area in London?
- Equity invested
- Time horizon

I think the only way this is a good strategy is if you intend to move out of London and the price you get for a small townhouse ~1.2-1.5 would buy you a huge house with acres and great schools around then I'd say go for it.

If you just want to take advantage of a potential downturn and are treating your home as merely an investment I'd stay put.

Actually a cut in stamp duty may now cause a flurry of activity and The dramatic fall in sterling May cause a large influx of non £ buyers so the opposite of a crash may occur . That’s the thing - too many artificial measures at hand to prop the market up - never bet against the flow of money even if valuations look toppy . At least not with the family home

To add to the many comments.

House market is very illiquid and inefficient. Even if prices did fall past the 10% you need to make it financially viable there is a real probability you won’t find a house you like and want.
People pay way over the odds for a house because they want it and it may not come in the market for another generation. Lower house prices will reduce the supply (for many reasons) exactly when you want to buy.

The warnings in this thread are all very sensible, though I suppose the last few days' news haven't exactly weakened the case for doing something like this.

Given the recent fall in sterling - the guy is probably doing ok now .

I have seen people do this over many housing cycles and it has always ended badly . Stamp duty and taxes make this even more of a difficult proposition . If he feels this way about housing tell him to short property shares or look into options . Yes rates will rise and housing should suffer but there are other ways to make money without risking the family home which is a home not a commodity . Renting is also very expensive and unsettling.

We did this a decade ago. We wanted a bigger house but the sort of house we were after don’t come onto the market that often so we sold to put us in a better position to move quickly when the right house came up. The upside is that we do now have the perfect house for us; the downside was three years of renting (two years in one house and one in another) which was unsettling and neither of the rental houses were as nice as our previous house. They never really felt like “home” and these were years when our kids were small and memories were being made. I don’t have particularly special memories from either of those houses and although I love our current house I can’t help feeling we could have probably bought it anyway without selling the previous one. As someone else said - houses are not just commodities - they’re your home.

Oh gosh, please avoid this like the plague! I think we have been waiting for house prices to crash since the 90s, and yes, they have gone down at times, but overall they are up, up, up! Unless we suddenly build millions of homes in desirable locations, the law of supply and demand is always going to prevail. I know someone who even moved abroad 15 years ago, because they reckoned that prices would crash and that the fall-out for the economy would be so horrific that they didn't want to live here. This was a really smart guy, financial analyst, but well.... he is still abroad, his wife and children moved back home without him and prices have not crashed. As others have pointed out, prices would have to drop a lot before you made good on the cost of moving, estate agents' fees, stamp duty, moving costs....

No one has mentioned the uncertainty of renting and the impact on your children. Another person I know, who moved back to London 10 years ago, has been renting whilst waiting for prices to drop.... well, they are still renting and have moved 4 times due to landlords wanting to sell their properties or move back in. They feel completely unsettled and hate the fact that they can't even decorate their home as they want, or put a picture up! Even if you were to make some money on the course of action suggested by your husband, do you want to put your children through this?

You need to decide if your house is your home or an investment.

You may make money in house prices dropping (that is debatable), but you need to take into account cost of
- moving
- rental payments vs mortgage repayment (rent is not repaying for anything where else mortgage is paying off your mortgage)
- stamp duty

Also, at the inflation we are currently at, money in the bank just looses its value. Will you invest the money you make by selling the house to something else that you considered a better investment?

I am not trying to put you off, everyone should do whatever they want with their money. But there are a number of factors to consider in addition to actual house prices.

Considering that you will incur stamp duty, legal fees etc. on a £1.5m house that’s circa £100,000. So you will lose money unless house prices fall at least 7% , and ….. you need to time sale and repurchase perfectly and you need to find a house you want to live in in 2-3 years time and you have to outbid rivals and you have to make sure that vendor doesn’t pull out and you need more favourable mortgage terms than you have now and you need to put up with not living in your own home. And after all of that (if it goes perfectly) … what will you gain?

Considering that you will incur stamp duty, legal fees etc. on a £1.5m house that’s circa £100,000. So you will lose money unless house prices fall at least 7% , and ….. you need to time sale and repurchase perfectly and you need to find a house you want to live in in 2-3 years time and you have to outbid rivals and you have to make sure that vendor doesn’t pull out and you need more favourable mortgage terms than you have now and you need to put up with not living in your own home. And after all of that (if it goes perfectly) … what will you gain?

I agree with the above poster, the top of the market has been and gone.

Even if there’s a repeat of the financial crash and London prices drop 15% a lot of that would be swallowed by moving costs.

If you buy and sell a £1.2m house it will cost you around £80k in stamp duty, move costs and 2 years rent. You ‘might’ get a place at a 15% discount on last year but that’s only £180k so a relatively small difference for the risk.

The flip side is you sell up and rent, incurring the costs, but prices don’t drop or (unlikely) tick upwards. Then it’s an expensive mistake.

I can see your husband’s logic, and we benefitted from buying at the bottom of the market on our last place. The difference was that we held our existing property and remortgaged that to fund the new one. Rising inflation should erode the value of your mortgage and it may be prudent to focus your efforts on paying your mortgage down, if not off. You’ll then be in a much stronger position when prices have bottomed out. Your salaries also will likely have benefitted from a few years of increase due to inflation - meaning you may be able to borrow more for that bigger house later on.

Like most investment decisions, by the time people realise the market is about to fall - it already has. I would argue that the top of the market was just over a year ago. People are feeling much more cautious and property prices have already started to stagnate and drop. Agree with others that it is better to hold your asset as prices in London tend to stall rather than free fall in times of economic uncertainty.

Just to add yet another anecdote to underline the probable danger of this approach.

A friend had a 3 bedroomed terraced house in Fulham and he was convinced that house prices would slump after Brexit - They didn't - He had expected to be able to afford a 4 bedroomed house in Fulham once prices slumped but in the end was priced out of Fulham entirely and had to buy a house in the cheaper area of Tooting.

I well remember how depressed this made him as he was more than happy where he was originally. He described that it was a gut-wrenching experience to see houses in his old street selling for much more than he received when he sold.