To sell or not ?

[Kay286]

We own a property in the U.K. we rent it out. last year it would have sold for around £300k. Now probably between 260-270k.
we rent it out but way below market rates now at 900 (market rates around 1300)

we are on a variable mortgage and rates have inc to 7.5% which has increased mortgage by over 300 per month - income now doesn’t cover mortgage so far we have absorbed this but it’s not sustainable.

we live abroad and the market has slowed but not to extent on U.K. (average prices at the low end are £650k if we want to buy here which we do)

options are sell U.K. house now for lower and buy here and try not to miss a lowering market here ie we’re better to take a lower price for ours and try and hit the market and buy while lower here (bigger impact on buying when house are million in dollars ?) mortgage is 100k so would have around 170k equity towards deposit for property here. Need to factor in once tenants leave we’d be paying mortgage bills council tax until it sold- tenants are not in a position to buy.

or increase our rental to market rates and try to remortgage on a buy to let and hold out for a few years for market to improve … but potentially missing a market drop
in prices where we live ? We currently rent and are paying $4k dollars per month too.

I just can’t decide , wwyd?

Thank you, that's really helpful

the change that really affects me is that there's a strong chance I'd want to live there again myself. Does anyone know if the government are going to make it harder to do that?

in which case - ironically - I might be better leaving it empty, especially given the change to CGT.

This is why no one likes ‘amateur’ landlords. Selling peoples homes from under their feet.
I’m glad the OP is selling, but landlords should be professionals renting property that is their business model, not other half arsed scenarios, (like the woman in the other thread claiming UC).
This is why government policy is getting tightened, and I hope gets much more stringent.

I don't want to cause any issues which is why I might need to leave it empty. I will ask around about short lets.

I think there is a place in the market for “amateur” landlords in as much as there are a decent number of people out there who need to rent for a number of different reasons eg. Temporary relocation for work or caring, testing a move to a new area before making it permanent, renting after selling but before buying etc. and do not consider the rental their “home” as such and accept that with the flexibility offered, comes with an associated risk that the house might be needed back by the owner.

I know while I had to rent a property to live in for all of the reasons above on separate occasions over the course of 3 decades, I was incredibly grateful to the small time landlords who let out their normal family homes thus providing me somewhere nice to live for a year or two here and there when I needed it.

And yes, two of them did sell the houses while I was renting, because the leases allowed for early termination.

Similarly, when I bought and my house eventually became available, I terminated my lease early because my lease let me do that.

We all did it properly, all above board and without bad feelings. This worked because we all accepted that this is the nature of private renting.

I think the problem comes in where people see private rentals as being the same as council rentals. It’s just my opinion, but I don’t think it is the job of a private landlord to provide a tenant with home for life. That’s something different.

I shudder to think what it’s going to be like when I have to do it again when the small private landlords are chased out of the market. All I’m going to be left with to choose from are huge landlords controlling the market for profit and air bnbs. Fun times ahead.

@C4tastrophe i can see your point but tenants know when signing up this is not a guaranteed home for life … I also rent the house I’m living in and accept this.

@mafsfan yep we are just at the start but cannot wait until completion haha - want rid of it now. We only kept it on as moved abroad and thought it would be temporary but it’s not. Good luck hope it all goes through smoothly … dreading the cgt bill tho !

@Kay286 have you seen the cgt calculator? I did the calculation early on so I had some time to get used to the number 😂 of course the tax free allowance has halved since I did my calculation but again, such is life!

https://www.tax.service.gov.uk/calculate-your-capital-gains/non-resident/?_ga=2.88411099.1964372850.1683241042-687345500.1683241042

@Whatwouldyouoffer just had a quick look it actually doesn’t seem like too much with the yearly allowance and principal residence relief ? This is our only property and we’ve only rented it out 4 years (last 9month free ?) and using the 2015 rebasing isn’t horrendous! However we’re also liable for cgt in the country we reside in but that’s another story lol and expensive 😭

@Kay286 yes, it’s not as bad as I expected either but am still wrestling with the tax on this side too. Expensive business, indeed! 😭

@Whatwouldyouoffer were are you out of interest (obv don’t have to answer!) we’re in canada ,:)

CGT is stressing me!! Ours is complicated - lived in the property, had to rent it, lived in the property, had to rent it... We've ended up enquiring with an accountant to help us as there's so many exemptions and other clauses. I just want to know the final figure because we need to sort out our own mortgage asap!

I definitely think there should be a place for small landlords/accidental landlords. We've been much better landlords than lots of people in the business (always agreed to work/requests, had repairs done asap etc). But I'll be glad once it's no longer my responsibility or cost!

I never thought of rentals as long term homes either
maybe I'm over worrying.