To sell, or not to sell? Deciding whether to sell or rent your home can feel like a tragedy, or comedy, of Shakespearean proportions. It’s important to be as well informed as possible before making such a big decision, so we’ve looked at the pros and cons of each option. We know what it’s like to be a landlord, having to navigate exasperating mortgage or tax obstacles. We also understand what you have to complete in your property before it can be either legally rented or sold successfully. Then there’s the daunting ups and downs of being in a sales chain, not to mention having to part ways with your home which can more distressing than many realise – especially if you’ve made multiple memories there. Confidence is key, so make sure to get professional advice before making any big decisions and embarking on your journey – the right help can make the process much easier and boost the return on your investment.
Passive income and a financial safety net
If the idea of earning regular cash flow that requires minimal effort to maintain it appeals to you, then renting your property could provide just that. The level of effort will depend upon how involved you want to be with tenant finding, compliance and maintenance. You can, of course, opt to have a specialist property management team, like ours at Davies & Davies (shameless plug), take care of some or even all of this for you for a percentage of the rental income. From just handling rent collection, right up to our premium package which includes a rental guarantee for added peace of mind. Furthermore, if you’re having difficulty selling your property, renting can be a blessing whilst you secure a regular income and capital growth.
Try before you buy
Moving to a new area can be a daunting jump – renting your property out while you dip your toe in a new town, borough or TFL zone can be the perfect way to get that sense of security before making the permanent switch.
High rental demand
Whilst you may find selling a property difficult in the current climate, there’s a huge demand for private rental property at the moment, making finding tenants that much easier.
You can usually expect the market to continue improving, particularly in London, which means that over the course of a period of time you will see your property rise in value. If you can afford to sit on your investment, you’re likely to win big in the future. It’s not a guarantee and markets tend to fluctuate, but long term property prices invariably rise (along with economic growth and incomes), and so if you are planning to keep your property for many years, then short term dips shouldn’t be a worry.
“Renting can be a blessing whilst you secure a regular income and capital growth.”
Rules are for keeping
There are many rules and regulations to comply with when letting your property, some of which can result in unlimited fines or even imprisonment if not adhered to. All is not lost however, as we can help you to navigate those ever changing regulations. However, it’s important to be aware of these compliance issues and to make sure you’re prepared to either handle them all yourself or happy to pay a qualified estate agency to handle them on your behalf.
Tax man blues
Unfortunately, taxation on second homes may cost you more than alternative investments. It could also cost more to maintain the property than the rent you receive. You will also likely find yourself paying out initial costs in order to meet legal requirements for renting. You have multiple options, including the choice of registering yourself as a limited liability company, which can help limit taxation and inheritance tax costs – just ask our team for more information (and we’ll be publishing a guide to these schemes soon).
Unforeseen circumstances with your tenants can cause financial and emotional stress, such as renting void periods if the property isn’t let, damage to your property or times when rent is paid late or not at all.
If the worst were to happen and a tenant refused to vacate or pay the rent, the current court procedure for gaining possession of your property is, by the courts own admission, unnecessarily difficult. On average, to remove a tenant the procedure can take 7 to 8 months before the judge would grant repossession, making it a costly and stressful situation to find yourself in. It’s very uncommon but still a risk that should be considered. We can alleviate this risk through our Premium Property Management Package, which guarantees rent, covers legal expenses and means we would attend court on your behalf and handle the proceedings for you – but, this added peace of mind is an additional cost to consider.
“Taxation on second homes may cost more than alternative investments.”
If you’re planning on downsizing or relocating to an area with cheaper properties you could find yourself with a considerable amount of disposable income, which can be spent on you, your family, your new home or perhaps to reinvest in other ways.
You don’t have to worry about unreliable tenants, property damage, ever changing laws and compliance requirements or any nasty surprises such as repair bills. While selling can be complicated, it’s far less complicated than the rental market which is riddled with legal requirements and regulations (which can land you in very hot water). Whilst you can pay an estate agency to manage all of this for you, should you choose to rent your property, by selling you’ll avoid the potential aggravation that you might face as a landlord.
Relative price drops
If you’re looking to up-size during a slower market such as right now, it’s a great time to take the plunge. As the higher value properties that you’ve got your eye on will likely be cheaper in relation to what you’ll sell your current property for – so, for example, a your current £500,000 home may now only be worth £475,000 but the £1,000,000 property you’d love could now be listed at approximately £950,000 (e.g. both 5% cheaper).
Relative price drops
You could choose to take advantage of up-and-coming locations with better capital growth, whilst benefiting from the creative communities that tend to spring up in such areas. We’d recommend areas such as Finsbury Park, Upper Holloway and Seven Sisters.
“You don’t have to worry about unreliable tenants, property damage or any of those nasty surprise repair bills.”
It’s a gamble
Your property is likely to increase in value over time, which you may regret if you’re moving out of London or downsizing. Letting could therefore be the better option in the short term, until prices increase.
Unfortunately, regardless of how desirable your property is it can sometimes take a while to sell, which may hold up your plans.
More work to the property
Gone are the days when you could put a property in poor condition on the market and expect it to fly out. Of course, you can still do this but be prepared to sell for considerably below market value, or for it to be on the market for a while, or both. You’ll have to look at spending time and money on your property which might include decorative costs, a lease extension, new bathroom and/or kitchen and so on…
It’s a buyers market
In the current market it’s to be expected that offers will be below asking price and sellers will also have to make more concessions throughout the process, as power has switched from vendors to buyers over the past three years. You could sit this out and wait to see if this changes, but it’s unlikely for the foreseeable future.
“You might regret selling as the value of your property is likely to increase considerably over a longer period of time”
Seek professional advice
These are big decisions to make, with short and longer term financial and emotional implications. Whilst we’ve tried to provide an overview in this article of the pros and cons, your own circumstances are unique to you. It’s important to get advice from qualified experts who live and breathe this life!
Don’t be afraid to book in to speak to an estate agent to discuss your options, be honest and frank with them about your circumstances and what you would like to achieve. A good estate agent will want to get to know you properly so that they can provide the best possible advice, they’ll appreciate being given as much information as possible and will be upfront about what your options are. Check in with yourself to see how you feel talking to the estate agent, if they’re patient and are putting you at ease whilst being straightforward, then you’re on to a good thing.
Don’t just rely on Google – it’s a jungle out there. If you’d like to book in for a free valuation or consultation with our team just call 0207 272 0986 or email firstname.lastname@example.org – there’s no obligation to instruct us. Whichever estate agent you choose to turn to, make sure they’re qualified and experienced.
Check your mortgage
Check the small print – many mortgages include a clause that prevents you from renting out your home, or allow you to rent it out for a limited period and only under certain circumstances (such as if you were to move away for work and intend to move back after a set time). If you do have to change mortgage you may have to move to a buy-to-let mortgage which might be higher interest or entail early repayment fees. It’s important to talk to an experienced mortgage broker to work out your options and find a good deal. We can help you with this and provide free mortgage advice, just get in touch on 0207 272 0986.
Double check the lease
It’s important to check the original lease or survey, especially if it’s a Victorian property, to see if there’s any work that you’ll need to do before selling.
Be confident in what you can afford
Clearly, you should only consider renting out your property if you are financially secure. If you’re already stretched or not confident dealing with financial matters, then you could end up regretting it. You’re more likely to be able to buy a new property while keeping your old one if you have major equity in your existing property, as well as a sufficient income so that you can easily finance the mortgage on your new property. Make sure to speak to an established mortgage advisor, again we can help with this, but ensure whomever you speak to has experience.
If you want to know more about your options, have questions about taxation or compliance, or just want to know how much your property is worth – we’re here to help!
020 7272 0986
Davies & Davies Estate Agents, 85 Stroud Green Road, London, N4 3EG
Back to Insights
We know, sorting out your tax affairs is a potent mix of fear and tedium, but it’s also entirely necessary. Particularly so if you are a landlord in need of a self-assessment. I know what you’re thinking, but we can get to your intimate health checks later… We’re talking about your tax return, divided here into small manageable chunks of boringness. Fun police assemble!Read More...
Single handedly managing a property portfolio can be enough to bring on an early onset of greys. As well as screening tenants, chasing rent and sorting repairs, there’s a tonne of admin and legal stuff you need to keep on top of. Enlisting the help of a lettings agent means you get to bump up the ‘I love my job’ moments while minimising the stressful ones.Read More...
We know how important it is to know your rights as a tenant; whether you’re currently facing a tenancy issue, or simply want to avoid any renting related concerns in the future.Read More...
“Gotta love a Georgian townhouse, eh?” you shout, slapping the brick entranceway and attempting a stride towards your friend’s promise of housewarming nibbles inside. “It’s actually Victorian” mumbles your friend, squeezing along the narrow hallway to take your coat. The next thirty minutes you eat your way through their salmon puffs and your words.Read More...
Mortgage in the bag? Give yourself a pat on the back, you’ve officially entered the adulting world of variable rates, credit scores and laughable curtain prices. Now it’s onto what is arguably the fun bit. Choosing your home sweet home. Here’s what you need to consider when it comes to securing your dream abode.Read More...
By the time you’ve finished reading you’ll have stamp duty sussed and will be well on your way to retiring your renting days. So, before you start Googling obscure German hair thickening shampoo brands, read our handy guide to securing your starter home. It all begins with the stuff that makes the world go round: money.Read More...
There’s a lot more to letting out a property than just handing over the keys. As your local property nerds, we’ve compiled a list of everything you need to know to make the process of renting out your property as easy and stress-free as possible.Read More...
We’ve looked at the pros and cons of each decision to help you begin with this exciting new chapter in your life. Every situation is unique and we know the importance of this decision, so Davies and Davies are are here to help you make the right choice.Read More...
We don’t think you should have to compromise on space and style to save money in your new home search. At Davies and Davies we have a wealth of affordable properties boasting private gardens, Victorian architecture and original fireplaces all nestled comfortably in the heart of leafy and buzzing North London.Read More...
Upgrading your home isn’t just about not wanting to appear out of touch when your neighbours pop round. Smart tech can put you in control of your bills, reduce your property’s environmental footprint and provide a talking point at dull dinner parties.Read More...
With many of us switching up our shopping habits to include more ethical choices, adopting a sustainable mindset could just be the selling point your property needs. But it’s ‘gonna take more than a few LED light bulbs to create that green dream. From upping your recycling game to investing in smart tech, here are eight ways you can shrink your home’s environmental footprint while increasing your profitability.Read More...
We’re pleased as punch to announce we’ve been awarded “Gold Exceptional” (the highest score you can get) in both sales & lettings, ranked 7th Best Estate Agent in the UK, by the Best Estate Agent Guide awards 2019.Read More...
If you’re lucky enough to have access to outside space, you may be itching to make the most of it now the weather is finally beginning to turn. Perhaps you can plant that herb garden you’ve been meaning to cultivate and really transform your basil pesto once and for all!Read More...
For the final piece in our series, today we’re spotlighting our very own Alina, who has been with D&D for the last 11 years. After starting out as a bookkeeper for the company, she has worked her way up through the business to become one of the two female directors at Davies & Davies.Read More...
Everything you see when you step into Crisis has been tailored to Esther’s design and created with help from the charity’s volunteers. There’s a story behind it all- from the coffee bag dress in the window, to the coffee stained wooden units themselves.Read More...
The culture that Claire has created at Barefaced: of collaboration, attention to detail, and client care, is evident the moment you step through Barefaced’s doors. Though the agency’s reach stretches worldwide, they have deep roots within the local area, and know it inside out (especially anywhere serving food).Read More...
Yvonne, and her sister, Sharon, are well and truly “Finsbury Parkers”. The salon is right at the heart of Finsbury Park, and with the trio of Aquarius Hair, Aquarius Beauty, and Mento, the family own this corner of Stroud Green Road.Read More...
The Deli at 80 is positively full to the brim with some of the best food produced both in the local area, and further afield (the cheeses, charcuteries, and mustards come direct from Paris!).Read More...
Pretty Shiny Shop is aptly named- an eclectic treasure trove of gifts, cards, and jewellery, it is filled to the brim with things to tempt your magpie sensibilities.Read More...
Mento is nestled just opposite Finsbury Park station, but bursting with vibrancy the moment you step through the door. We spoke to self-proclaimed Finbury-Parker, Sharon, over some Jamaican iced coffee. Part of our International Women’s Day 2019 series.Read More...
Salt the Radish is a mere five minute walk from Finsbury Park station, but it’s the area’s own little slice of calm, cafe culture. We sat down for a chat with Salt the Radish’s owner, Kat. Part of our International Women’s Day 2019 series.Read More...
020 7272 0986
Finsbury Park Office,
85 Stroud Green Road,
London, N4 3EG
Mon – Thurs 0845 – 1815
Fri 0845 – 1800
Sat 1000 – 1600
Sun: Appointments by Request
Closing from 1:00pm on Friday 20th December and will re-open at 08:30am on Thursday 2nd January.