DS plans to leave his central London flat totally empty for a year

[Tedsabear]

Hi all, so my DS’s dad passed away a couple of years ago, between his pension, life insurance and home DS and as able to sell his home and buy a flat in central London. He spent over 1 million on this (his dad wasn’t super wealthy or anything he just owned a property in a nice area of London and it was paid off mortgage wise). His girlfriend is Portuguese and also owns property in Lisbon.
They are mid 20s.

They have decided to spend the next year as digital nomads as they are able to work remotely. I told DS he should rent out his flat and his girlfriend should do the same. One from a security perspective and two as extra income. He has said no he doesn’t like the idea of someone staying in his space, he’s said I can go and check on it once a month or “whatever” if I like. He said his girlfriend will be doing the same anyway.

AIBU to think he’s being ridiculous?

It won't be counted as a second home for insurance, they don't have a primary residence other than that property.

It's not easy to get unoccupied property insurance, which is what he'll need. Many insurers will ask that the property is checked weekly and a register of those visits is maintained - OP your son needs to be fully aware of the pitfalls of his plan.

An extra factor he needs to consider is UK tax on foreign income for UK residents. HMRC have very specific criteria for what counts as non-resident for citizens who are ‘ordinarily resident’. For example, if his 1 year working as a digital nomad is equally split across 2 UK tax years, he will most likely be liable to pay UK income tax on his foreign income earned. Especially as his UK property ownership and family ties is evidence of his ties to the UK. He needs to understand his tax implications so he doesn’t have a nasty shock at a later date and/or takes this into account with his travel dates (so be overseas for a full UK tax year rather than crossing over 2 years).

https://www.gov.uk/tax-foreign-income/residence

I’ve lived and worked overseas (and provided evidence to HMRC before I left the UK of my overseas employment contract, rental agreement, overseas tax ID etc) and still got hit by them when I returned to the UK 3 years later. They were completely wrong and I’d ticked all the correct boxes before leaving the UK and while I was living overseas but I still had to go through HMRC’s laborious appeals process to get the fines overturned as well as get them to agree I was non-resident and not liable for 3 years of income tax. It was a huge headache and quite stressful at the time.

Edit: And I left my central London flat empty as I needed a home to return to if things went pear-shaped (work contract was initially only 1 day’s notice needed to be given by my employer). But I had close family using my flat for London visits as well as an onsite estate manager with spare keys and neighbours who knew how to reach me 24/7. And it was in a secure gated development that is quite difficult to access (even when you know how!)

As, indeed, are tenants

I agree with this

We have a second home that is empty for most of the winter. It's a condition of our buildings insurance that someone visits it at least every 30 days to check for structural damage and leaks. Luckily w heave family and friends nearby who are able to check in and take a couple of dated stamped photos to prove they were there.

This is even more important in a flat. The flat below my DSs was empty because the owner had emigrates and the selling agents were meant to check on it every month. There was a period of several months when there were no viewers so the EA didn't bother visiting. When they eventually escorted a viewer there it was discovered that an undetected slow leak from DS's kitchen overhead had bought down the ceilings in two rooms and the place was saturated and mouldy.

winner winner for DS. His whole kitchen including appliances, the floor and all the cupboards had to be torn out in order to track down and fix the problem so he got a brand new kitchen for the price of his excess. However because the property below hadn't been inspected their insurance was invalidated. They had to pursue the EAs for the very expensive costs of repair.

that’s why most 24 year olds shouldn’t just be given over 1 million unregulated.

You sound quite bitter. Do you think that might have any bearing on the strained relationship?

He's bought property which seems fairly sensible to me. He doesn't want to rent it out. I don't blame him, I wouldn't either, and a pp has made good points about what if he comes back sooner for whatever reason.

All I'd advise is to make sure it's properly insured, someone checks on it, and the surrounding properties have contact details of someone in the case of an emergency.

Are you the one who hasnt seen your son for a year or more due to his travelling?

Not really. It’s not like he’s hoarding it. It could take months to sell and how much would the rent be on a million pound flat? As a renter, it’s not the top end of the market that people struggle to find homes in.

I think I'd ask him if I could live there while he was away, then let out my own house and make a bit of loot and go away for a long holiday on my rental proceeds! His flat would be safe in the hands of his mother (that's right isn't it?). Depends on whether London is feasible for you though.

But it's a thought.

The insurance company want to know when a flat is empty and so the freeholder needs to be told. The premium may rise.

Unless they damaged it / accidentally set fire to it

Do you know how much stamp duty would be for a property of that value?? It would be over 43k, then you’d have to add on the cost of storage for the year, and rental while looking once back. It’s hardly an inconsequential cost (and he may actually really like his current property).

If I were him I would definitely be renting it out but if it is potentially going to cause a fight then just leave it.

He could probably make at least £25k possibly a lot more

Nice idea if it would work

The letting agent doesn't do 'the landlording'. They find tenants and they manage the rent collection. They'll also organise the annual gas check. But in my short experience, not much more. Their annual inspection isn't worth the paper it's written on in my experience. The property that I've just spent £1,000 pounds on just to get the rubbish cleared and it cleaned (as far as is possible) was inspected eight months ago, and the report mentioned none of this.

People are allowed to go travelling without giving their home to someone else to buy.

It’s for him to decide whether it’s worth it for him.

Or he can let it for a reasonable and fair rent. Maybe to a couple of healthcare workers at the nearest hospital.

What he should not be allowed to do is leave it standing empty or make a huge profit on it.

Homes are for living in.

I think it depends on the agency.

When we left our tenancy, the agents were anal about the inventory and cleanliness checks. (Our tenancy agreement said we had to pay for an end of tenancy clean). We left it spotless

But the issue I had during the tenancy was never addressed despite raising it a few times.

His flat, his choice. My mum went from her London flat to a care home at the beginning of 2017, and as I live abroad but wanted to stay in the flat when I came back, and airbnbing it wasn't an option, it has been empty for much of the time until now when I now have an arrangement to share it with temporary tenants. It's been fine.

I own a flat in central London but am in the process of moving to the countryside with DH.

If all goes as planned, I'll have a friend staying in the flat. The idea is that DH and I will have the guest room at our disposal for whenever we need to stay in London, and we won't need to clear out the flat in the same way we would for tenants (i.e., we'll leave all the paintings, furnishings, kitchen gadgets, some "city" clothes, etc.). Most importantly, we'll have someone on site to keep an eye on things - it's an old building, so there's always something going wrong. Just last week, there was a leak from the flat above (unbeknownst to the tenants), and I dread to think what would've happened if no one had noticed it for a few days, let alone weeks or months.

In return, my friend gets serious mates rates (we're mostly concerned about covering building management fees rather than turning a profit), and doesn't have to deal with the whole circus of finding a flat, or deal with letting agents and landlords they've never met.

We know a few other people who have similar arrangements.

Of course, it only works if there is someone in your son's circle who he trusts and knows well enough to have this kind of arrangement with, but I'd say it's definitely worth having a think about - if he's mid-20s, he probably has a good amount of friends who are still in the market for this kind of thing!?

Show him what can happen if you leave a property empty for long periods:

BBC: Man whose house was 'stolen' gets possession back

It took almost 4 years for this man to get ownership of his property back after it was 'stolen' and sold when he left it empty due to work commitments.

He's not being ridiculous not to want to rent it out.

If he were asking me for advice I would recommend either paying a trusted friend or family member to visit on a regular basis or working with a vacant property management service - it may cost £150/month but can save a lot of potential trouble and insurance issues.

But he's not here asking and it sounds like you will be best served by not offering any opinions or unsolicited advice. He's a mid-twenties adult, your relationship is already strained, and it's extremely clear that you disapprove of him ever purchasing this flat so your further input now will be particularly unwelcome. Stick to expressing excitement about his travels.

But why would it be empty? They are going travelling? So presumably would still need contents insurance.

I also be surprised if there weren’t restrictions on occupation in a flat. But obviously it would depend on the policy.

It isn’t obscene. It’s sensible. Read the other responses.

I wouldn't feel the same about my place if someone else had been living in it. I know it doesn't make sense financially but I don't blame them. I wouldn't get roped into going to check on it though. It wouldn't cost them a lot to come back to do that