Author Topic: Sell or rent: UK  (Read 412 times)


  • 5 O'Clock Shadow
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  • Posts: 15
Sell or rent: UK
« on: May 14, 2019, 07:08:12 AM »
Market Value: £230-290k (you know, Brexit)
Original Purchase price: £197k + £30-35k for renovations
Original Mortgage Amount: £86k
Interest Rate: 1.44%
Mortgage Term: 10years
Term remaining: 10years (remortgaged a few weeks ago)
Amount remaining on mortgage: £86k
Gross Rents: £1,100
Principal and Interest: £762
Taxes and Insurance + HOA:
1) Service charge w house insurance: £120 pcm
2) Council licensing fee: £750/5yrs
3) Approx. £2720 income tax w 8.33% vacancy rate
Deferred maintenance notes:
Nothing worth mentioning, the property has been renovated to a high standard. For every month of vacancy, there are approx. additional £200 expenses (council tax, electricity, water).

Based on my calculations, with 15% set aside for vacany and repairs, I am getting -0.87% Cash ROI, 4.91% overall ROI with self management, dropping to -2.25% cash ROI and 3.53% overall ROI with outsourced PM.
I was planning to sell the property due to abysmall returns and various risks, however the two offers of around £280k didn't go through and the new offers will be in the range of £230-250k due to Brexit uncertainties.
The question really is this:
Is it worth selling now for £230k and investing the £144.5k left over in an index fund vs sticking with the negative ROI for 10 years with outsourced PM considering a) I'm moving to a € denominated country and would lose residency, b) due to loss of residency I'd need to pay 25% capital gains tax if I ever do sell & I'd be stuck with £vs€ currency risk, c) Brexit might make it more expensive to borrow money (my current mortgage product runs out in 2years).
If it's not worth selling for £230k (since I invested more than that), is there a number where it makes sense to sell? I know £280k was a great number to sell for, but the market has dipped significanty and it is a valid question of what Brexit will do to lettings demand as well (but this is more in the realms of guesswork, I'd rather see some mathy answers). :)

I'm looking for any and all opinions.
Thank you all very much for your time!


  • Pencil Stache
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  • Posts: 692
Re: Sell or rent: UK
« Reply #1 on: May 14, 2019, 10:07:13 AM »
It seems if you're ever going to sell it, now would be best.  If you're not actually there, I would definitely recommend selling. It's a choice between investing in stress free automatically traded share in public companies or in a rental business where you carry all the risk for a measly 3.53%. I know it feels like you're losing 50k if you sell, but the truth is that money is already gone and waiting for it to come back is just speculation. It could just as well go down further. If borrowing costs do go up as you fear, house prices will come down. And Brexit makes everything uncertain, which means headaches and stress.

And I can tell you the horror stories of a friend of mine who rented a nice London flat to what appeared to be a decent family a few years ago. In short, 6 months after they moved in, not a pound of rent paid and he has to fly up an down for legal arrangements to get them evicted.

The only thing you may want to check is that capital gains tax. There are lots of double taxation laws that exempt you from paying in another country so you may want to look into this in your target country.


  • Magnum Stache
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  • Posts: 3530
  • Location: France
Re: Sell or rent: UK
« Reply #2 on: May 14, 2019, 02:11:37 PM »
Market Value: £230-290k
Gross Rents: £1,100

Just sell it.