To rent out London flat or to sell up

[TortoiseT]

Hey! As a family, we’ve arrived at a crossroads and plan an international move to my home country during this spring. We live in a tiny two bed ex-council flat in the most amazing block where our kids could knock on any bar one door (out of ten) and they’d be welcomed in and safe. This sense of safety and community has been very healing for me, as I suffer from CPTSD and all I ever have wanted for my little ones is a sense of belonging and safety.

As a teacher and a nurse, we are priced out of bigger properties and family is important to us, so want to move closer to see them a bit more. My husband is from Northumberland.

Would love to hear opinions on; should we keep our London flat as a rental (leaving some of our money in as an investment), with the view of being able to return to this safe place and secure work opportunities for both of us OR should we sell up, take our profit and buy a little house outright in the North which we could initially rent and maybe one day use as holiday base if/when MIL gets on and needs more care and visits. We’d draw out some of the profit from our house for a deposit in the new country, around 110k, so we would leave about 80-90k in the UK in the flat we own or buying a little house up North. Opinions please!!

Have you ever been a landlord before?

There are lots of responsibilities and it'll be difficult if you are in a different country.

Renting a house out can be a nightmare, even through an agent.

Thanks! Yes these are very good points. With the London flat, we would have to rent it out to cover costs, with up North, could potentially manage to keep basic utilities covered without having to rent it out, and just rent it via Airbnb. We can’t afford the more picturesque towns for a house, but possibly could afford a flat. Then we could also stay when we come to the UK, usually minimum 10 days at the time… I have a friend who runs a holiday-let business who could advise up there too, and of course we have husband’s family, one of whom also works in property so would be able to advise and at least signpost to good tradespeople/areas for rental opportunities, etc.

we have lots of friends who are landlords and they’ve had some hiccups along the way, but our jobs will be way more laid back in the next country so time won’t be as much of an issue.

I’m beginning to think selling and a property up North makes more sense as we will spend more time there as a family!

I come from a farm where family has lived since 1500s so it feels weird to sell the home where my kids have made their earliest memories! Especially since they’ve been such happy ones and I absolutely love love love the area we live in.

I think as long as you realise when you rent out the flat, that will also become someone elses HOME and you cant just come back when you feel like it without giving a decent amount of warning, I would go for it. Property value is never going to decrease in London. Is there much of a market in your area though? What sort of people would you imagine would be interested? I would also make sure you look at the associated costs - insurances, repairs, management and legal fees etc,

A holiday let would be MUCH more work again unless you paid to outsource all the admin and cleaning etc. Also theres always the ethical argument of buying a property to rent as a holiday let etc.

If the London property has decent equity, why not just sell and reinvest the money elsewhere?

Thanks for these helpful points. The market is very fast where we are, but we are not in the poshest part of town. But hands down the best! I’d imagine the sort of people who’d consider moving into our flat, would be families who look at affordable private rentals close to transport, amenities and parks. More likely immigrants rather than British people, which I have no problems with. There are three outstanding primaries near us, so families moving in from abroad wanting to kids to decent schools, etc, pops to mind.

there are also lots of families near us where the whole extended family want to live near one another - and often rent or buy near each other. We know the area very well and trust the people around us, also our neighbours would absolutely inform us if we had rowdy and awful tenants.

I’m very conscious of the ethics of being a landlord- I would love to be able to provide a reasonably priced rental for someone who needs it, and would of course try our best to keep the flat in a shape it needs to be for the tenants to be comfortable. The end of tenancy would be problematic and I’d find it so hard if I had to evict someone, so you have made a fair point there. The odds are I would know the person too, as we live in a super tight-knit community where people know one another, if not directly, through someone. So that’s a very good point to consider too.

As a side point, we would probably not buy in a prime holiday hot spot in Northumberland, and would not be in a position to push prices out of the reach of local people really, so ethically speaking buying up North would be ok too. I personally see no problem people buying a property for themselves or family to use to care for/visit elderly family, and then benefit from covering some of the costs via Airbnb. It’s either that, or we camp or rent out a holiday let from someone else while we are there.

I'd keep the London flat rather than buy somewhere random in the North for £90k and let it out. That won't have the homely feeling that you're after, and there are restrictions in a lot of councils about how many nights per year you can let an apartment out on AirBnB and the like. Just being near your MIL isn't going to make it feel like home if you've never lived there, and don't really know the area. It's going to feel especially different if you've got a very close-knit community where you are.

If you're planning an international move, will you definitely come back? Could you not sell, and then buy somewhere wherever suits you when you do come back? You might not want to be by MIL by then, or she may have moved, or you might decide you actually don't want to come back, and MIL might move out to you. There's a lot of unknowns, and you don't want to buy a house on those grounds.

Renting either out won't be easy; but London will make more sense to hold onto if you really want to hold on to one - it'll be much more likely to hold it's value, and easily be occupied, and you'll only be dealing with the fees and costs associated with one tenancy, rather than the admin/cleaning/fees/etc associated with each holiday let.

I personally see no problem people buying a property for themselves or family to use to care for/visit elderly family, and then benefit from covering some of the costs via Airbnb.

Eh, do you not see them as taking a home from someone who would live there full time, be a proper member of the community, and contribute to the local economy?

I mean, I'm not passionate about losing holiday lets or getting rid of landlords, but I think you're splitting your ethics to suit your situation here.

I would keep the London flat personally as it has more potential as an investment than a property in Northumberland.

Further if you did decide to come back you are already on the London ladder. Why not keep existing property initially and review in a couple of years. Simpler way to try before selling up and making a potential error.

You love the flat so I would keep it.
Research a good landlord and have a UK friend be a second contact.
Any place up North can be purchased later in your life if needed.
You might not settle overseas or circumstances could change your ability to stay there.
Your flat is a good investment in terms of location.

Eh, do you not see them as taking a home from someone who would live there full time, be a proper member of the community, and contribute to the local economy?

I mean, I'm not passionate about losing holiday lets or getting rid of landlords, but I think you're splitting your ethics to suit your situation here.

Thanks for challenging on this, good to think through. I don’t think I have anything against people owning properties purely for the purpose of letting them out for long-term or holiday lets, come to think of it. So I guess I’m not breaking my own ethics whichever option we would choose. You said you’re not against them either? I wonder how many people who are against second properties, actually then end up staying in them for holidays?

Some of my best holidays in this country have been on holiday lets owned by people who have family ties to the area but live elsewhere - eg a honeymoon and some family get-togethers. I’ve also stayed in holiday-lets and Airbnb’s that I had no clue who the owner really was and whether they were local or not.

The places where we would look to buy in Northumberland, if we were to go for a house, would be areas where there is a surplus of properties in that price bracket, many of which go for auctions, but at the same time there is a high demand for affordable rentals, mainly for the long-term. So we could either a) provide a semi-affordable private rental for someone who cannot afford to buy but wants to live in the area or b) cover the costs ourselves with the view of only renting out for maximum 90nights of the year. Under option b), we’d have a base when we are in the UK near SILs, MIL and some friends, and we’d potentially be able to provide some extra hours for a local cleaning company or a person. If work doesn’t work out in the new country, we would then move back and would have that security…

From a financial point of view, some of you have mentioned the fact that we’d be unlikely to loose out on a London flat. This is very much at the back of my mind too, so would be amazing for kids if they wanted to come and work here, to have a flat they could stay in for a bit less than the crazy rentals around. Plus we feel we really have out roots down in here and the kids very much feel our area is part of their identity and background now.

Let’s be honest here though, I am mainly thinking of our own and our kids’ financial futures rather than the local economy, I don’t think there is anything inherently wrong with that. So I can’t lie that I’m doing this because I see myself as some sort of philanthropist with my “massive” budget haha!

I love all the responses thanks so much everyone, really enjoyed thinking all these different aspects through.