Property sale advice

[darasda]

Could I ask for some advice 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

I'd be renting it out but would've done years ago. You can apply to your current lender for consent to let or remortgage to a different lender on a proper buy to let rate

Difficult one - I think if it was me I probably would sell it as you have an offer you are happy with, that will be a nice chunk of inheritance for your DS either way and having the cash more readily available in a fund will then allow him to choose where he wants to live more easily than having it tied up in a London flat - I know a lot of young people do want to live in London at some point and how amazing to have a Kensington flat available so I get your hesitation, but you just don't know, he might prefer to live in Edinburgh or Timbucktu for all you know and then it won't do him much good.

If you do keep it though and don't often use it, I would def look at converting the mortgage to a buy-to-let and renting it out, although this is a big hassle and obviously you'll have to pay tax and costs etc out of the rental income, having it sitting empty seems a waste...

Thanks,

I've just realised it's a very long initial post so here js a shorter version:

Would you sell a flat in London now if you didn't really have to?