This article outlines whether you should sell or rent out your central London house in the current market.
When people ask us whether they should they sell their house or rent it out, we would love to be able to give them an immediate answer, an answer that sends them away satisfied they are doing the right thing.
Unfortunately, the answer we end up giving them will depend on their circumstances because there no one size fits all answer to this question.
The answers ‘will depend on why they are considering selling or renting, and these reasons differ from having to relocate for work reasons or a concern over their finances.
However, recently there has been one reason people with property in Central London have asked this question.
And this reason is the uncertainty of the property market in London, especially properties in the more affluent areas.
Uncertainty in the market
The rise in stamp duty and the result of the EU referendum have been blamed for the current uncertainty in London’s property market. But even the experts cannot agree how bad things are and when things will improve.
In November 2016 it was reported that price of houses at the top end of the property ladder were down by over 5%. It was also predicted that London’s house prices would not rebound until 2020.
Some boroughs have fared better than others. One of the reasons for this is that some investors decide to sell their property and put their money elsewhere. This reduction in high priced property is worrying those who rely on the property increasing in value rather than rental income to make their investments pay. And this is why many of them are asking whether they should sell their property or rent it out.
Should you sell or rent?
There no one answer which fits every situation. It really depends on each individual’s circumstances. And to what economic prediction they choose to believe.
Those with a low mortgage or who are mortgage free and believe the property market will bounce back in the next two or three years may choose to rent or continue renting until the upturn arrives. However, those with a substantial mortgage will have to consider their position. If they can hold on until the economic outlook for property prices improve, then renting is the answer.
This, of course, is if the rent they receive will cover their mortgage and other costs of being a landlord. If this is not the case then selling would be the most prudent step to take.
But there are other factors to be considered when it comes to renting a property.
Can you rent?
Those who are already landlords will have no problem. However, those people with a mortgage who intend to become a landlord could have a problem. Some mortgage lenders will not allow the property to be let. If this is the case, there is the option of changing to a lender who will agree, but this is becoming increasingly difficult and would be costly.
However, some mortgage lenders will allow a property to be rented out but the conditions are quite restrictive, so it would be advisable for people to check their mortgage agreements.
Call us for help
Not sure whether to sell or rent your property? Contact us here at Plaza Estates
. We have years of experience of the central London property market. We will be able to advise you on the best course to take regarding your property.