Moving out of London, weighing up the pros and cons

[Joelijane]

Myself, partner and 2 boys age 5 and nearly 3 years currently live in a purpose built block, 2 bed flat with a shared garden. It's been a great base with good social connections for us, however we are basically outgrowing it and just cannot afford anything more. If we stay we will have very slim pickings and be working incredibly hard for barely much more. I'd always wanted to move back home up north either to my home town wirral or Southport, Liverpool surrounding areas (where partner is from) Our parents are both elderly so we'd get to see and help them more too. I've been offered a great a job that facilitates our move and I'm excited / nervous about all the next steps to follow. We will probably have to rent out our flat as selling is very slow, several flats in our building have been up for a year. This means up north we'd be looking at smaller houses than we'd ideally like but still very much worth it, I believe to get out and started on settling and cultivating our new life. I'm basically thinking it'd be better to move asap so my boys can settle as young as possible without having become to attached to our current life and their friends. Is that wise thinking? Is renting out your property hard when you've got young kids and work to contend with? Wasnt sure if we should hang on and wait to sell which could mean staying put another year or even two? It's been a difficult point to get to in our relationship and trying to plan this. Partner does want to move and we've agreed to do it though he also hankers after the dream of somehow making it possible for us to live in London. We are both sad to leave but we also can't wait to have more space and live in a way that we want ie; house, garden, friends over socialising, space to wfh. Has anyone left London with kids same ages as mine and regretted it? Thank you for reading if you got this far, quite a lengthy one! x

You need to look into the rules on capital gains tax.

When I moved out of London, I rented my house for a while. Back then, I think there were three years before you were hit by capital gains tax if selling a house that wasn't your main residence. Something like that anyway, my memory is hazy!

I think it's changed since then, though. So you need to find out what the rules are.

I really miss London, but miss it less as the years go on. Most of my friends with kids have moved out too. It took me a long time to settle in my new town, but I have now, eventually.

It was the right move for the kids (mostly) I think.

Yes. There are rules around CGT if you let out your main home., However the Government web site has the rules and exemptions. The calculation would always need to be done.

As for moving: lots of people do it and don’t regret it. Depends what you want from life and what your DP wants. What is there in London he wants to hang on to? Could he be happy in the NW again? Did you say whether a move affects his job? Sometimes people move away for a reason and going back seems a backwards move!!

We visit The Wirral and it’s pleasant but housing varies in price a great deal. Definitely some smart areas. Access to Liverpool is swift via the tunnels. I don’t know about schools other than it has grammars. I would look to see what your budget would buy and see if it’s worth moving to an area you like. I don’t know other areas. You might even like Liverpool if you think a city life would help DP.

Im surrounded by people who have moved out of London for the countryside but I’m much closer to London. So I would evaluate Your finances and maybe give it a go?

Could you keep your flat in London and rent it out? CGT is payable if not your main residence-but obviously only on profit when you sell minus your allowances. We moved from London 20 years ago and I still miss it but happily settled here. We couldn’t have our lifestyle in the SE. We have access to beach and mountains and easy travel to cities from where we live so our quality of life is good. I do feel that opportunities are better for young adults in the SE though-although my kids couldn’t maintain their lifestyle in London. Wirral is great with easy access to Liverpool and some areas are very nice indeed. Liverpool is a fun city and Manchester reminds me of how London was fizzing with energy when I moved there in the eighties.

Speaking as someone from a similar area who has stayed put in London, in your circumstances I would definitely go for the move. We would have struggled to both find jobs in the same place outside London and could afford a house here.
Wirral has good affordable housing and great transport links. Your kids are the best age for a move too.
Check out CGT rules but if you can make it work renting the flat sounds sensible. Factor in costs for someone to manage it for you.
I have heard that you can get mortgages based on renting out your current property to buy somewhere else so that might be worth looking into.

Do look carefully at the finances.

Remember that rent is taxable. Also there are agents fees and all sorts of other expenses. So a lot of money gets lost. If you sell a £300k flat you can (pretty much) buy a £300k flat with the same money. You can't just let out a £1,000 a month flat and hope to use the money to rent a £1,000 to live in. From the £1,000 you may well be lucky to have £500 or £600 left by the time you've paid for tax, fees and allowed for maintenance.

Also if flats in your block have been unsold for a year that means that prices have fallen, and the vendors don't want to accept that. Are prices likely to rise any time soon? Will they carry on falling? Interest rates are on the way up and we're at the beginning of a period of major economic struggle. It's better for you to be realistic about what it's worth.

Also letting the place out at a distance is a non-trivial operation. It can be hard work under any circumstances. But you sometimes get tenants who can't change a light bulb or don't understand how to turn on the heating. If you're round the corner you can call in. If you're 200 miles away you'll be calling out an electrician or heating engineer. And the government has been creating a hostile environment to discourage landlords. By making rental property scarce that policy has been good for rents, which are rising, but it can make everything harder work.

My partner would be working in London and staying there one night every 2 weeks. He can also go freelance in the future too. It's a pretty shit situation with regards to selling at the moment. Whis knows what its value will be but if it does keep falling for a period, is it not best to rent it out and so as to move forwards with our own lives whilst things settle? Developers Throwing up 2 beds everywhere possible when we actually need 3 bed properties has buggered up the market for us too which is why the rental option is what I'm considering. factored in the reduced finances from this. The flat could sell in the future I'm sure but I dont want to sit and wait or this possibly happening considering the kids etc. Will Calculate the CGT and cost to have the flat let managed, we didnt expect to manage this ourselves having thought about the distance etc.

NB we paid 242K for our home