DH's job comes with a house - should we rent or sell ours?

[Catslovepies]

DH is getting a new job that comes with a house. We have a house nearby already - it's a really nice house with 4 bedrooms, 3 reception rooms, a lovely garden, and the mortgage is nearly paid off. We need to figure out whether to rent out our house or sell it. If we sell it, I think we'd buy a flat in London that we could use for probably every other weekend to enjoy time in the big city, go to the theatre, etc. I would probably end up spending more time in the flat than DH because I can work from home. I love London and I think it would also be nice as far-flung friends would be more likely to come and stay, and there is so much to do there. I don't think I want to live there full time but for a bolt hole it would be great.

We do want to have a property of our own rather than keep the money in savings. DH reckons he will stay at his job for at least 5 years, and it's a very stable job. And because of the type of job it is, we wouldn't have to pay capital gains tax on our existing house when we sell it regardless of whether we had lived there recently or not.

We've never been landlords before and don't know exactly what it entails. Also I'm a higher rate tax payer and I guess a lot of the rent we received would go in taxes. Maintenance of the house would probably be more expensive than the London flat, but then we'd have to pay council tax, utilities and service charges for London. So London would be more expensive but we'd get something out of it in terms of enjoyment. It's a really tough decision and I'm struggling to make up my mind what to do. Any advice welcome, please.

Have you lived in London before?
I live in Battersea/Clapham so am very biased when I say it’s a wonderful place to live… But…

It’s not for everyone, and being in a one-bed flat (probably with no or very little outside space) can be an adjustment if you are used to lots of space and rooms
It would be a lot of lost money in stamp duty etc if you bought and then realised it wasn’t what you were hoping for

that said, there has been a big slow down in sales at the lower end of the market with possibly more landlords selling up soon, so you might get a good deal on a flat, and if you wanted to rent it out, you would be looking at the business end of £2k/month for somewhere nice

But I would still be much more inclined to rent out your home and then rent somewhere in London. You could potentially even do a 6 month short term rental to get a feel before committing further - they are relatively common because people do them while refurbing their houses, or moving back to the UK while house hunting etc

Seeing the budget and size of flat you can afford I’d probably keep your house, rent it out and use some spare cash to come into Central London as a visitor.

The trouble with London flats are the service charges. It's a lot to have in your monthly budget for a couple of weekends a month.

Tenbob's list also has my DH's job on it. I would do the London flat, but not immediately - rent your house for a year on an AST and see what happens with the job and the property market first. Living in is different and some people really hate it, even if they've done substantially the same job before - the loss of privacy seems like the main issue that people sometimes have. Just don't step off the property ladder completely whatever you do - I know people who have done that and it becomes a golden handcuffs situation where you are locked into the tied accommodation.

If you live where you work you need to have an escape hatch, whether you're still on probation, or have been there 15 years, even just psychologically to know that the tied accommodation isn't your "real" home when your employer is doing your head in refusing to put in double glazing or to turn the heating on!!

PM me if you need any more advice as we have been in the same situation.

I’ve changed my mind now I’ve seen the budget - rent the house out .

It totally depends…

a new build with lots of shared facilities will have a high service charge

A Victorian conversion with a share of freehold might have a £500/year service charge to cover the insurance

Hey @Catslovepies my DH had a job on that list, just retired from 25 years in post. We rented our house out and used a letting agent. It's been relatively hassle free.

Sounds like a Gov/forces job so job security probably not an issue.

I'd be renting it out with full letting agent management and insurance

Vicar I bet

Buy the London flat - you could also make income from it by popping it on Airbnb when you are not there

Rent your family home put through an estate agent. Use some of income to pay for hotel when you want a London break.

I’d be careful about assuming you can airBNB a London property. Some boroughs require permission or have strict limits to the number of days a year you can do it. If you’re concerned about the worries of letting your main home think about the tenfold worry of multiple let’s in London.

Dh and I are in our 50s and don't have children. Thanks for all the replies so far.

If you are not tied to the particular area where the house is (even if/when your DH changes job) then I would go for the London flat, sounds fantastic!

My DSis and her DH were in this situation and made the mistake of selling up and not buying anywhere else. I did ask her about retirement plans but apparently “the lord will provide”.

I’d be tempted to rent your current house out for at least a year through a good letting agent - you’ll be local and able to keep an eye on it as well.

I also think that whilst the idea of a flat in London is nice, the reality can be very different. Your budget, which in other parts of the UK would be very healthy, won’t stretch to much more than a pied a terre in the areas you’re aiming towards.

If you want people to come and stay with you in London won't you need two bedrooms?
There's a lot of flats on the market in London at the moment so you might get a good deal.

Rent out your current house, take an out of town membership of a west end private club and stay there when you want to come to town as that often works out cheaper than hotels if you visit frequently and you get the use of the large communal rooms etc.

Now that's a good idea.

I used to work in a boarding school (hence the name) with one big campus where a lot of the staff lived on site. Some of the boarding houses were rented out for residential courses in the holidays, so it was rarely quiet.

Most of the housemasters/housemistresses kept their old houses and went there on their off-duty weekends, just to get away from school. A house in London would serve the same purpose, I suppose.

Many of the assistant resident staff didn’t have their own homes, and those who did mostly rented them out, perhaps because they needed the money more. It could be that they felt less likely to be called on when off-duty, so didn’t feel the need to escape.

I imagine this would apply to vicars, too, especially if the parish rooms or the vicar’s study are part of the vicarage so you get parishioners in the house.

It depends whether you might feel surrounded by your husband’s staff/clients in the firm’s house and whether you think he could be called into work because he is physically nearby.

@Camdenish
I'm not aware of boroughs that require permission unless it is over the 90 day limit.
By the sounds of it OP would be maximising personal use of a place in London anyway.
Airbnb was a suggestion to mitigate the higher expenses involved.

Given your age OP, I would buy in London, rather than having regrets about not doing it in 20 years time!
Perhaps also consider other areas around your current desired areas to get a bit more space for your budget, especially if you plan to work from home e.g. looking over the river in Wandsworth vs. Fulham.
Depending on your husbands work location you may find the journey in/out easier too, if you drive.

With that budget I would keep your house and rent it out to cover weekends in London. You would get a flat for £500k but nothing special or in a great location, and I think owning your current house will give you better options at the end of 5 years.

Yep, buy the flat in London. Do your homework to find somewhere that would rent well, don't pay over the odds, and pick a location where you wouldn't mind actually living for a bit, if things change, but also with good transport links into the city and to particular places you might want to visit regularly like say a favourite National Trust place, art gallery, or a swimming pool or whatever.

Take your time to shop around for a good letting agent to deal with it for you and do your sums carefully - get financial advice if necessary. You could also go to one of the National Landlord Investment Shows - I found these useful when I started landlording: www.landlordinvestmentshow.co.uk

And you could join a landlord's organisation such as the NRLA or Guild of Residential Landlords: www.nrla.org.uk, www.landlordsguild.com - a couple can usually join for the same rate as a single person. This will enable you to find out more about it, check your letting agent really is good, network and find professional service (such as tax advice for landlords) and maybe in the longer run take over the management yourselves or at least some of it.

Flat in London- air b&b it at times to make some extra income

@Marotte @Mar