how to get value from London flat

[madhouseprice12]

I have NC for this because it’s quite a lot of personal detail so I hope you will understand.

I am in a very fortunate position financially and would like to see how I can maximise this. My mum is very ill and I expect to have to reduce work and become her carer.

Own a flat in London outright, probably worth about £300,000

About £80k in savings

My mum is very ill and I expect to have to reduce work and help with her care

I am wondering how I can extract some “value” out of my flat. It seems bizarre that it has gained a lot in value but I wouldn’t benefit unless I downsized (not possible, it’s small) or unless I moved away.

It doesn’t look like equity release would be allowed as I’m not of that age.

One option would be to remortgage this place and then get a BTL somewhere cheaper than London. I know I can’t afford one here.

Also, I could just remortgage for a small amount and then try and invest that in other ways, because it’s currently so cheap to have a mortgage. It would have to be a small amount because I would based it on a reduced income to help out my mum. In terms of investing, it doesn’t seem like there’s a huge amount of stuff unless it’s very risky but then of course I realise a BTL is risky.

Critical difference between a BTL and other investments though – when mum is gone, I could live in the place I bought outside of London and rent the London place out. I see that as a plus.

I may have put too much detail in..…

Really I’m just wondering how on earth I can get something out of the value of this flat. I also feel like the London property market has got to come back down to earth so I feel I should do something while it’s considered to be “worth” this much. Any suggestions? I’m not naturally inclined towards landlording to be honest.

if you got this far, thank you for reading.

[janetandroysdaughter]

Think it partly depends on whether or not you want to stay in London long term. If you think the market is at its height and has to drop then sell now, but you may never be able to buy back in. (I thought that 10 years ago and the house we sold in central London is now worth a fortune.)

Might you live with your mother for a while? You could rent the flat out and use the income to live on while you were doing such reduced hours and so much caring for your mum.

[madhouseprice12]

Alas I can't sell now, I have to stay for mum and for work. I've no intention of staying after she's gone but it's one of those situations where she may continue in such poor health for years.

I would prefer not to live there - she is an okay drive from me but not an acceptable commute on a daily basis.

I suppose there isn't really a way and I am just clutching at straws because it seems so stupid that the flat makes more than I do and there's no way to realise that value.

I can imagine ten years ago you thought the market was at its height, but when my small one bed is worth this much, it really must be!

ach, well, I'll just have to see what happens, thanks.

[caroldecker]

Can you move in with Mum to do the caring and get an agency to let out the flat?

[Needmoresleep]

You would probably struggle to get a domestic mortgage as your income would be low. It might be possible to get a BTL mortgage but be warned, day to day returns are normally not great, especially if you are paying a mortgage or experience voids.

I can see it working if you want to remain in the same area. The only possibility might be to ask around to see if there is anyone in a similar position who is interested in renting out a room.The monthly profit on the flat once you have paid agents fees, mortgage etc may not cover the cost of renting a room, but you would be able to release some capital.

Sell flat, rent a room and buy a btl where you might eventually want to live?

If you are looking for a btl mortgage you might phone a free broker like London and Country and they should be able to tell you pretty quickly what is feasible and how much it would cost.