To sell London flat for school fees/house extension?

[sulkysukey]

Looking for some opinions about what other people would do in our situation...

We live rurally in a lovely home in the SW - it's not perfect yet and we've just got planning permission to make some great changes/extend - it will be pretty pricey but worth it.

Our local state secondary has been getting worse over the years so we might end up considering private school for our 2 kids.

We can't really afford any of this, but we have a 1 bed flat in London. We have a deep emotional connection to this flat and it brings in about £11,000/year. We don't earn loads, so this regular income helps with day to day bills/the odd holiday etc..

So to sell or not sell the flat?! Everyone says we'd be mad to sell a London property (it's nearly doubled in value since we bought it in 2007 for £215,000). We always thought the kids might rent it (family rates!) when they inevitably move to London when they're grown... It's obviously a great investment which ideally we'd hold on to. If we sell it we might regret using the cash for the "luxury" of an extension (and possibly private school) in the future.

Any advice? Thanks!

Selling will attract CGT

Friend and her ex have a similar set up.

Their previous family home in London has been rented out for a few years.

They looked into selling and splitting the profits but the amount would have meant they would have been down £40,000 in CGT so it wasn’t worth while selling so they assigned the property to exh and she kept the current family home.

How old are your children? When does the question of secondary education come up?

I only ask because in my experience schools tend to fluctuate in their effectiveness - often with a change of head. I know of schools that were rated highly a few years ago that have now gone down the pan - and vice versa. And do not forget that OfSted measure things that may not necessarily accord with your priorities for your children.

It sounds to me as though you should go and have a really good look at the local school, and think about whether the £11,000 income from the flat might be spent on plugging any gaps that you might feel in what the school has to offer. I imagine that the issue is not around the area in which it stands (as it is just round the corner from where you live!) and fears about "bad company", but more to do with the education on offer and how it is delivered. And remember that going to the local school affords great social opportunities as the children can walk home with their mates and be part of the local scene.

If it were me I would not totally dismiss the local school until you have researched it in depth; and taken other matters than purely academic into account.

If you sold that flat and bought another you would be liable for CGT AND the new second home stamp duty when buying a new flat which is punitive.

And lose rental income for a few months, probably, and selling and buying is expensive in terms of EA, lawyers and SDLT fees. Easily £25k worth.

Don't sell it don't sell it don't sell it! It would be like killing the goose that lays the golden eggs!

(If I had a spare flat in London paying me 11k a year, I would also have a deep emotional connection to it.)

Haha Tawdry and great points Mishappening - we wouldn't be at the school for a couple of years and I think there's been a recent change of head - but I need to find out much more and look around for sure. The bummer is that his best mate will def be going private (although I think it's quite nice having mates at diff schools so there are people detached from all the school friend shenanigans to chill out with).

I do really appreciate these messages - I know nothing about CGT and the like so this is all genuinely really helpful!