Sell property now or wait for a possible price rise

[littlemonkeyface]

Hi

Obviously no one here has a crystal ball but would really like to hear what you would do in our situation.

DH has accepted a new job which will take us abroad for the next couple of years.

We have a house that we definitely will not rent out (last property got trashed which cost us thousands) but could be left empty until best time to sell (no mortgage so only running costs to pay).

Properties around here (south west) are selling quite well but prices are not back to 2007 levels (yet?).

So would you sell now or wait for a possible price rise?

TIA

It would remain their main home ( so no CGT) if the OP does not buy a property abroad. Wrong, Milly. Even though it remains their main home, there is CGT payable on the years it is rented out.

Probably you can reduce any liability to nil, depending on circumstances. The taxman assumes any gain arises evenly over the period of ownership, so 3 years of however many you owned it for would be taxable. Then there is an allowance to exclude the last 18 months of ownership (used to be three years but just got cut). Then there is letting relief, which I think is £40k. Then there is the annual CGT exemption for both of them, and you can bring forward last year's unused allowance so you can claim around another £40k if not using it for anything else.

But CGT is absolutely due on a sole or main residence if it's let out.

Sell. Have just sold in teh SE and our agent says things have started to noticeably slow in the last fortnight. Mortgage affordability checks become more rigorous this week and I think waiting 2 yrs you may get less

Beastofburden is right. The other way to avoid CGT on a previously-let home is to move back into it and make it your main residence again. There's no defined period but as long as you live there, pay bills there etc, that's fine.

at the moment, of course - who knows what may happen to the rules?

even if you move back in again, the let period counts as a taxable proportion of the sale proceeds. So if I own a house for 20 years and let it for 2 years in the midedle, 10% of my eventual gain is subject to CGT. But almost everyone has enough allowances to cover it.

I'm a conveyancing lawyer in the South West. Crazy busy here, and there is lots of talk about the bubble bursting a lot sooner than we all might think because of the huge and sudden rise in transactions and prices.
I'm not sure we will ever see prices rise as high as they did before however, so, for what it's worth, I would sell before it all goes 'phut'.

Agree with some of the more recent replies. I see the current media hysteria on rising prices and the desperate buying behaviour in London/SE as the 'last Hurrah'. I'm genuinely concerned for those stretching themselves to buy now as I believe it will be the worst financial decision of their lives.

At some point interest rates will start to rise and the when/how much may well be outside of the hands of the BoE (at least if they want to protect British exporters once US rates and others start to rise). When house prices fall I think those falls will be heavy.

Sell now, avoid any risks with an empty property. Take advantage of current high sentiment in the market. Invest your money across a range of assets/risk categories. People talk about your money earning 1% in the bank. If you don't need immediate access to the money then you should be earning 4-6% even with a very low level of capital risk.

Gah, we are ready to buy within the next few months in London.

Should we wait?? No chain and living rent free thanks to family at the moment (though flat is way too small for us). I never know the right thing to do!!

I was too definitive in my statement about people buying now. We are viewing a house for sale today after several years of renting. However we have over 50% deposit, can afford interest rate rises and this is one over ~3 houses we have seen during that time which we feel is (relatively) reasonably priced. I am prepared for it to be worth less in a few years time.

What worries me are those people panicked into buying in London after ~18% in a quarter at prices which leave a lot of room for future negative equity and with mortgages they will struggle to service in a few years when they drop off their initial fixed rate onto higher interest rates. The new affordability rules should at least address the latter point to some degree.

We are definitely in a bubble atm.

my concern with that would have been that any damage or burglary would not have been noticed for a fortnight!!

Have not yet decided what we will do but your comments will hopefully help us make the correct decision (I suppose we will only know in hindsight).

Thanks again to everyone who has posted.

I wouldn't sell but I wouldn't leave it empty for years either.
a) I'd want the flexibility to leave my job and come home
b) what happens if you divorced while on this secondment or had serious illness in the family which you needed to return home for
c) if I had kids while overseas, I'd want a perm address in the UK to register them for schools etc before returning.
I'd give it 12 months overseas and see how the land lies there. If you think you won't be home anytime soon you could sell/rent it out then.