Selling to Rent

seven-day-weekend

This is a query about something we are considering for the future; just want to get people's opinions .


We have a house in the UK and one in Spain, both paid for and owned outright. We live in Spain at the moment, but will probably be living in England and Spain (60 40 split) if all goes according to plan by the time we are State Pension age (3 years for me. eight for my husband).

My query is this; although we are asset rich, we do not have a lot of money. I for one would like to travel more (just UK and Europe), but for this we need cash.

One idea I've come up with (and it may be a !!!!!! idea for all I know), is to sell our UK house and rent one with our son, so that all three of us are tenants. I can see several advantages to this - we can liberate £175,000 from the sale of our house, we won't have to bother to keep money for it's maintenance, we can live in a nicer place, we can use the interest for our travelling, and while we are travelling our son will be there to look after the place.

We would make sure we kept a substantial amount back from the sale for our son to inherit (I don't want to discuss the ethics of this, it is our choice and non-negotiable).

What got me started on this train of thought was yesterday I went to see a friend (we are in the UK at the moment) and she has a three bedroom apartment in a converted stately home in Shropshire with views out over the hillls , and it made me realise that for the rent she pays (around £450 pcm), she has this beautiful place, doesn't have to worry about maintenance, and can just walk way and leave it if she wishes. It seemed so liberating.

Please anyone tell me what you think of my thoughts - bearing in mind this is pretty much on the drawing board at the moment.

Zammo

Makes perfect sense to me. Now would be a great time to sell seeing as we are reaching the peak of a massive housing bubble in the UK. Go for it.

ManAtHome

Why do you want to spend 60% of your time in the UK - interested as I'm considering starting to spend over 99% of my time outside the UK sometime in the next couple of years.

seven-day-weekend

ManAtHome wrote:

Why do you want to spend 60% of your time in the UK - interested as I'm considering starting to spend over 99% of my time outside the UK sometime in the next couple of years.

Because there are several things we miss (the green grass and beautiful UK scenery), there is travelling we want to do in the UK, and also because we can organise it to get the best of the weather in both countries. Where we are in Spain is cold in the winter and too hot in July and August, and rains in September. We would be in Spain from March-June (the spring is wonderful), probably October and a few weeks over the Christmas/New Year/ Epiphany/Fiesta period.

This is of course flexible but we wish to be resident in the UK when we are older, so we will be in Spain for less than six months in any year.

ManAtHome

Thanks SDW - suppose I'm the other way round having spent a lot of my earlier life travelling the UK. Can understand the "too hot" bit July/August - you'll be OK back in Blighty on that score.!!

Surprised you're keen on the UK when older - most other bits of Europe seem to have more respect for oldies.

Anyway, hope things work out for you wherever you end up.

chivers1977

you lose your UK benefits though ie state care if you are resident outside though. That it probably one of the reasons. My parents aren't even really entitled still to vsiit their doctors here although they own a house here outright as spend 9 months away

lynzpower

chivers, my understanding of this is as long as you pay your NI contribution you still can use UK state facilities. PLus in spain is EU so covered by E111

seven-day-weekend

We are up to date with NI contributions as I have paid voluntary and my husband is on Incapacity Benefit so gets them credited.

By the time we are resident again, I will be on my State Pension, so presumably we will be able to access the healthcare.

At the moment we can't access UK healthcare as we are resident in Spain, but we CAN access Spanish Healthcare (and very good it is too). You get either an E106 or an E121 from the Social Security in the UK and these both cover you for healthcare in Spain, the E106 lasts about two years and the E121 is given if you are on Retirement Pension or certain Health Benefits and lasts as long as you are on the benefit.

seven-day-weekend

chivers1977 wrote:

you lose your UK benefits though ie state care if you are resident outside though. That it probably one of the reasons. My parents aren't even really entitled still to vsiit their doctors here although they own a house here outright as spend 9 months away

Ihave just rung up the IB people and they say there is no reason why you can't register with a doctor if you are once more resident in the UK.

I wouldn't expect to be able to visit a UK doctor if I was resident in Spain. If your parents are in Spain for nine months they will be classed as non-resident in the UK. We will keep our visits to Spain down to 4-5 months a year.

Mrs_pbradley936

Have you thought of getting an offset interest only mortgage on your UK house for about half its value? The point about it being an offset mortgage is that if it is tied to your current account you will not pay interest if you do not spend anything. It has the advantage of freeing up some cash, still being yours and limiting any Inheritance Tax liability later on. Because of your age you might only be able to take it over 12 years.

seven-day-weekend

pbradley936 wrote:

Have you thought of getting an offset interest only mortgage on your UK house for about half its value? The point about it being an offset mortgage is that if it is tied to your current account you will not pay interest if you do not spend anything. It has the advantage of freeing up some cash, still being yours and limiting any Inheritance Tax liability later on. Because of your age you might only be able to take it over 12 years.

Only just seen your post. I couldn't cope with an offset mortgage. I couldn't get my head round seeing an 'overdraft' of five figures, sensible advice though I'm sure it is!