Could I ask for some thoughts re a potential property sale please?
I am a born and bred Londoner but moved away to another part of the country five years ago. We kept our London flat and used it on occasion, never rented it out because it's an interest only mortgage and part of its terms is that it's residential only ie not rental. But we liked the idea of a bolthole and second home in London. I can afford to keep it going as a second/holiday home.
I have a young son and have always thought of that flat as a long term investment and inheritance for him. But I feel we don't use it enough and it's just a sunk cost. We're not likely ever to live in it even if we move back to London.
I should add that the flat is in Kensington in London, most expensive real estate patch in the whole of Europe apparently!! Bought it for £250K in 2005. I put it on the market early this year (just to get a feel for the market) and we have had a serious offer now for £525K ie 110% in 16 years. It's unlikely to go down in value/price long term even though people are moving out of London for bigger greener homes after the pandemic.
My question is do you think this is a good idea to sell it now after 16 years? Not have a potential second home and a future inheritance for my son, in a lovely part of London?
Or shall I sell and invest the leftover in index funds with potentially higher returns.
Thanks for any help and ideas because I'm genuinely at a fork in the road.
TIA