sell the house or rent out

[lilypoppet]

We have a house in London and are moving to Chichester. This has proved to be a complicated move as we currently live in Yorkshire (long story). We have made some silly financial mistakes but are now picking ourselves up. We were going to sell our London house and buy in Chichester, but with Brexit and house prices so undecided, our other option is to let it out and get a good rent. We will be renting in Chichester, so need the income anyway. I just want to make sure we don't lose any more money by making silly decisions. Please can anyone advise. Should we sell or rent out our London property? thanks in advance

You need to look into all the costs and compare with the actual achievable rent. You also need to be financially robust to cope with voids and non payers.

Needing the income is a sketchy position.

Ah thank you

I'm not sure there is much 'uncertainty' regarding brexit and house prices is there? The general consensus seems to be that it will cause them to fall, by just how much is anybodies guess, so surely this ought to be a reason for selling now, the chances of further double digit annual hpi is looking pretty unlikely in London or anywhere else for that matter.

Are you renting it out already? If not you may well find it more trouble keeping it than it will be worth. Are you moving permanently now?

no my husband is fixing up the bathroom after the previous tenants moved out. we have been on a bit of a journey and I am desperate to settle - Chichester is near my family and I have schools for the children there. I agree, I think we should just sell but dh favours renting out so we can get settled first.

As with all landlords, it is imperative to have a fair chunk of capital to deal with repairs from wear-and-tear on the house (bearing in mind you also need money to service the property you live in). In addition to this, having to cope with the tenants contacting you and you having to arranged services for the reported repairs. To cap it all, you need to be very well versed with the law with regard to being a landlord.

Can you cope with void periods when there is no money coming in?
Would you be able to cope with the tenant who trashes your property, or being contacted by someone else because your tenant is extremely disruptive?

A pal had the opportunity to become a landlord of one property sometime back but had decided against it because of the costs. Works a lot better if you take it seriously as a business and have a portfolio of properties.

Like, for example, having the deposit protected is something that has to be done by law. If you don't protect the deposit the tenant can sue you up to 3 times the amount of the deposit.

You'll find that income from the rent won't be worth that much and most possibly worth the hassle. If you own the house outright, there is a nice bit of cash that can be released...

The only time I think is great to rent out a house is when you intend to return to that property as a retired person.

possibly NOT worth the hassle. Sorry about the typos. :-(

Without knowing all of your financial details... If your London rental can fund your Chichester rental then I would do that!!

Thanks really helpful advice
Husband is a carpenter and does the work himself. I think we are moving towards rental because that will give us an income

...if the tenant continues to pay - it is not a given but not impossible. You can get insurances but they cost and don't kick in instantly.

you need landlord buildings and contents, mortgage permission if applicable, malicious damage cover, legal expenses cover that works in all circumstances, home emergency cover, gas safe cert, EPC, right to rent checks and loads of other stuff. It is a business and you need to become experts.

not a 'don't', just a 'think hard'.

Have you considered all the buy to let tax changes coming in and just arrived. There is also a big clamp down and tightning of buy to let mortgages. It is going to become far harder to get buy to let mortgages with far tighter conditions.

Also if you were to buy another home you would have to pay an extra 3% stamp duty which could be a sizeable cost.

The falling prices in London could really effect your equity and have other impacts.

Just look into the changes and do your sums for both options

Thanks the mortgages is already buy to let now because we've had it rented before. We had all the insurances and certificates done. I agree renting out is not easy and I wish we could just sell but we're not ready to

I know Chichester is not that far from London but you will need to work out
arrangements for emergencies eg the toilet gets blocked someone will need to be available asap to fix it . My friends rent out at a distance and they have a handyman who they call in emergencies. He/she will need to be a trusted person
Also for viewings when would you be available? Possibly at short notice

compare the income you'll get from the rented house with the expenses you need to deal with at your new home. This will give you a pretty good idea if the decision to rent is a good move.

If they are currently living in Yorkshire is the property in London their second home? Perhaps there are others on here who will know better
than me ?
I think you have 2 years or something to tell HMRC which is
your main home. The problem being that Capital Gains Tax could be
payable on the London home once it is sold? Has op ever lived in the
London home ? Letting it will mitigate the CG bill.
Only saying this as do not want op to be caught unawares

Yes we will have to pay capital gains tax. The accountant said ten thousand pounds

I agree. letting the property will help you cover £10K capital gains

I'd rent for now.

Thanks I think we're going to be renting