Rent out or sell ?

[Jenkibuble]

Unsure whether this is best place to post this - have also posted under property/DIY
Youngest has finished education now - 18 , and so I am no longer tied to where I currently live. Their dad remains in the area so in holidays he and sister can still return etc. To add I bought him out the house .
My job could be done completely remotely (currently do it hybrid)
I have been discouraged from renting it out - responnsibilities mainly and non payment of rent / risk of the house getting trashed etc.
Mortgage is 800 a month and been told I could get 1200-1300 rental. The area I live in is subject to licenses for landlords so would have to pay 900 for one (lasts 5 years ) as well as rental insurance and agency commission.
The alternative is selling = is it a good time to do this . I have got the benefit of not being in a rush so could hold for a half decent price . The areas I would look at buying in would be more expensive (though can downsize on space !)
I am loathe to come off the housing ladder completely (leave something to the kids )
I have 24 years left on mortgage . I am 44
I feel I have waited for this time (to be able to relocate ) and now in so much uncertainty .
Any current / previous landlords advise etc.
TIA

With 24 years left on the mortgage and the idea that you would be managing this property remotely, I would advocate for selling. Further, there is no certainty that you will get (A) good renters, (B) have stability in the neighborhood with respect to home values and the state of the neighborhood (i.e. both could drop over time), (C) that your kids will even want to live in their childhood home or the city itself later in life.

While you do have time to wait out for the best price, you must be careful not to price so high that your property sits for a long time and then others will perceive that there is something wrong with it, especially, if over the course of time you start to lower the price.

Price it in line with the market, and your patience comes in when people try to give you low-ball offers.

Renting through an agency reduces your risk greatly - I’ve rented my property out for the past 10 yrs (only property I own) and I’ve had very few issues as it’s all managed by them. I personally would always want to be on the property ladder as trying to come back on again in a few years may be almost impossible.

Renting through an agency reduces your risk greatly - I’ve rented my property out for the past 10 yrs (only property I own) and I’ve had very few issues as it’s all managed by them. I personally would always want to be on the property ladder as trying to come back on again in a few years may be almost impossible.

Why not rent to your family for a bit while you look around?

I've never had a problem with my tenants in 10 years of letting a flat. I wouldn't want to be paying a mortgage until I'm 68 though. If you don't want to be in the house anymore I'd consider downsizing to reduce the mortgage term so it ends when you're 60.

Where are you planning to live whilst you rent out your home?
Are you planning on buying another house to live in or renting somewhere yourself?
Sell up and live in a place you want to live in.

It depends on how tight your margins would be. You have to factor in repairs, renewals and refitting over time. If your margins are not too tight bud allow all of this easily and your mortgage company give consent to move the mortgage to a buy to let easily enough then I recommend keeping a foot on the property ladder.

If you have no experience of renting out properties and/or won’t be nearby and able to be hands on enough to manage it find a good agent though (their fees are tax deductible) preferably a member of The Guild of Property Professionals as they are independent agents with owners working in the business and really care about service. Never use a corporate agent.

My gut feeling would be to rent it out. You may not be able to afford to buy what and where you want in the future. At least if you rent it out for a while, you can see in the future if it suits you.

From an accidental landlord of 5 years agate moving I with a partner who is now selling don’t do it. It’s hell, you are playing roulette on whether you will get good tenants or not and if they turn out not to be it’s very difficult to get them to leave. Rules are changing in England I believe but in Scotland I had to serve a notice to leave so 28 days as within first 6m (it’s 3m notice if after first 6m) then if they don’t go apply to court to get sheriff officers (baillifs) to physically remove - where I am the waiting time for court hearing was 8 months!! My tenants left a stinking dirty mess (ruined mattress due to body odour) but at least they left and thankfully the mattress will be going in the skip anyway but it was an expensive one in great condition before they ruined it.

If don’t want to be paying a mortgage until 68, your next mortgage renewal shorten your term, so factor that in when thinking about affordability either way - can you afford for your monthly outgoings to go up a bit so you can retire earlier?

If you are not sure where to move to, you might want to rent for a year or two so possibly worth renting your place out, but it is a lot of faff for short term. If you know where you want to be, might be simpler to just sell and buy.

Can you double your mortgage payments to £1600 and reduce it to a 15 year mortgage or less? Then take on a lodger (you get up to £7k tax free) and you may be paying only a few hundred more. In the meantime you could consider how it feels renting and think about selling and where you might move to. If you buy again make sure you get advice and get an investment property somewhere you will gain value over time. You probably want to avoid renting yourself if you can so look at potential properties whilst you think about selling. This might take two years but in the meantime hopefully you’ve knocked 3-4 years payments off the mortgage.

Generally no, it’s not a good time to sell. It’s a buyers market.
You won’t see much of that £400-500 above your mortgage money. Repairs, fees, maintenance etc. I’ve just had to pay £900 in fixing a fridge, a bathroom vent, an EIHC report. On another property there was a £6000 surcharge to redecorate the outside and deal with some damp issues- wiped out any profit for the year. But you may well get decent capital growth if you think long term.
But where will you live? Will you rent or buy - can you afford to without selling?

If you rent it out the chances are you’d need to switch to a buy to let mortgage (I don’t know if banks are happy to do consent to let these days). The interest rate may be higher, you may have an early repayment charge in your current mortgage.

Are you a 20% or 40% tax payer (after the rent less rental expenses is added on to your income!). Assuming £250 a month costs, your net rental income is £1,000 a month. If £12k Pa pushes you into 40% tax zone, that’s £480 a month tax, before reducing it for 20% of the mortgage interest (not the repayment part, just the interest). You’re likely at a loss at this point.

If you’re paying rent to live elsewhere that’s likely more than your current mortgage. On top of the loss you’re making on your rental. Or if you buy elsewhere you have to share the equity between the two homes (two big mortgages, both at higher interest rates as loan to value is worse). Plus you’d need to pay higher stamp duty on your new house ( if in England, not sure about the others) as you’re not selling your existing home - add 5% in top of the normal stamp duty.

If you don’t know how to comply with the legislation you need a managing agent (always been great in my experience).

Wear and tear is generally far greater in a rental. Be prepared for decorating every 5 years or so, carpets more regularly than you would, etc.

Be prepared to be left a filthy flea-infested home even from an apparently decent tenant (true story). I wouldn’t rent out something I had an emotional attachment to ever again.

I’m sure you can make your dream work, but you might need to get there through a slightly longer term plan? I agree with you that it would be foolish to get off the housing ladder.

Don't forget that property costs and rental income is no longer subject to tax exception so will this extra income take you over the high earner tax threshold and essentially means an income cut?

It is very expensive to be a landlord of 1 property, it's only really a benefit to those with multiple properties in a portfolio these days, in addition to costs, risks, dealing with people however well you vet them etc

If the sums work, and you want to do it / can afford any hit don't discount it as an option. But do it knowing the full picture and don't do it for easy/quick cash and then be surprised.

Good luck!

Given the changes in law coming up my answer would be a firm no.

You've got a risk of a bad tenant and the eviction process now being more difficult because of court delays, and that's before the changes.

Your mortgage rate will probably change and you'll be required to have an EPC, Electrical certificate and gas checks. You should also have enough spare money to pay the mortgage if the tenant doesn't pay the rent, and to buy a new boiler/roof/kitchen too.

I would sell it.
There are tax implications on the rental income and legislation for landlords is increasing.
If you keep it there will be CGT (Capital Gains Tax) when you do finally sell it, being a second property.
There are suggestions that the Govenment may introduce CGT on primary homes too, so you may want to act quickly!😵

This would be a dilemma for me. I really wouldn't want to get off the housing ladder if I could avoid it but equally there is very little profit in being a landlord these days unless you have a portfolio of properties and have some economies of scale.

The Renters Rights Bill is also going to make it really difficult to get rid of a bad tenant which in turn means a non payer could end up being really expensive. I've worked in rentals for a long time now and I and every other landlord I know have only ever used Section 21 Notices for non payers and/or extreme antisocial behaviour contrary to what the government would have you believe they get used for.

I would only go down the rental route if you have a minimum of a year's costs (mortgage, certificates, repairs/replacements, agency fees if using) in savings that you can fall back on if the worst happens.

I think you would be seriously out of pocket if you rented out your home and then paid to rent elsewhere. The licence for HMOs come with lots of stipulations and you would have to pay for emergency lighting, fire alarms, gas alarms, fireproof doors etc. If you are thinking of renting to more than 4 people, then you would also need a second fridge, additional cooking facilities and a second bathroom. In addition, agencies take quite a percentage and it all adds up. I have a rental with HMO and I barely make half the rent after agency costs, repairs and replacements etc.

Sell and relocate. It would be a opportunity to start again; in the sense that this is the house you shared with your ex.

I don't think you're liable for capital gains tax unless you own 3 or more properties and start a business. I have 2 rentals and recently bought a 3rd to live in and I was only subject to the higher rate of stamp duty.

You are liable to CGT on 2nd and subsequent properties if in your name and not a Ltd company. Also would have to pay higher stamp duty on 2nd and subsequent properties.
First reaction to the post with the limited detail is the margins are too tight especially if higher rate tax payer.

I would definitely sell and buy another property

£1300 pm after commissions of 10% plus VAT is £1150

After tax you end up with £920 or £690 (depending on what tax bracket you are in)

If you mortgage is £800 per month then if your are a higher rate taxpayer then you are going to be making a loss and if you are a basic rate taxpayer payer you are making £120 per month

For that kind of loss or profit I still would not take the risk.

I was fortunate in I had good tenants but I realise I was lucky.

Also your mortgage lender is likely to want to charge you a higher rate once they find out you are a landlord … so this is probably best case scenario

There is Capital Gains Tax when you SELL a second property perhaps it is different for a rental business, although I don't actually know.

'How much capital gains tax do I pay when selling a rental property?

Latest tax rates – how much is capital gains tax on property? The rate of capital gains tax you pay when you sell a property depends on your tax band. If you're a basic rate taxpayer, you pay CGT at 18 per cent. If you're a higher or additional rate taxpayer, you pay the higher capital gains tax rate of 24 per cent.7 Jul 2025

I would sell it but it may take a while. Be aware that your local council may charge you double CT unless you are able to show you are actively marketing the property.

You pay capital gains tax when you sell a property that is not your main home/has been rented out for some or all of the time you have owned it.

You pay it on the gain between the price you purchased it at (or it's value when you were gifted it) and what you sell it at (or it's value when you give it away).

You get a personal allowance for Capital gains each year of £3000 so no tax is due on the first £3000.

If a property was your main home and is then rented the total gain is aportioned based on how long it was rented out. E.g. if your house was rented out 50% of the time you owned it and had gone up in value 10,000 then 5k would be a capital gain of which £3000 could be disregarded due to the personal allowance.

You can deduct from capital gains your buying and selling costs and the cost of major improvements I believe. There may be other exemptions so worth asking an accountant or looking into it more. The last 18 months of letting a property that was once your main home used to be disregarded but I'm not sure if that is still the case.

This is all just my basic understanding so take professional advice if needed.