Should I pay early repayment charge to sell my flat for more money?

boing

My fixed-rate mortgage deal comes to an end in July and I'm hoping to sell my two-bedroom flat and buy a house.

I'm wondering, though, whether it might be better to sell earlier in the year, before the further crackdown on buy-to-let in April, even though I'd have to pay an early repayment charge of around £8,000. The flat is very marketable to buy-to-letters and I just think if I wait until July I might find there's less interest in it, and I might have to accept a lower offer. Anyone in a similar position or have any thoughts?

anselld

The crackdown has already happened. You won't get extra money by selling early.

boing

Yeah but further changes are coming in April - tax relief on buy to let mortgage interest payments is being cut from then

Pixie5740

That only matters for higher rate tax payers. Besides that's not like the additional SDLT which is a one-off tax. The changes to tax relief will eventually apply (if a higher rate tax payer) whether someone purchases a BTL before or after April.

booksurr

boing wrote: »

Anyone in a similar position or have any thoughts?

anyone have a crystal ball?

as said above the changes to income tax won't impact a long term decision as to whether to buy before or after April. what may (I'm guessing) impact is the "usual" slow down over the summer whilst people go on holiday.

anselld

boing wrote: »

Yeah but further changes are coming in April - tax relief on buy to let mortgage interest payments is being cut from then

Yes, but they are known now and they are not avoidable by buying early. So any investor will have already factored in the impact.

AlexMac

You need to perm happenstance with forecasts of local house price inflation. And that's a mug's game... but I'm a mug, so here goes!

In my immediate locality, price inflation was running at about 10% p.a. over the past 5 years but has slowed this past year to 5%p.a.

So, while the past is no guide to the future, if that continued in your manor, you'd be looking at monthly inflation of under half a percentage point; say a grand a month on a £250k property, if that's what your gaff is worth? If more or less, you can do the numbers?

So, unless I'm massively under-estimating the value of your existing property, you'd have to put your flat on the market now, and sell it by Christmas (noting that most sales take a minimum of 2 months from offer to completion, more if you have cr4p lawyers or dozy vendors/buyers) to make up the £8k penalty... and where would you live from January til July; even assuming you found and bought a house within 6 months, and at what cost in rent, storage of furniture and two removals?

Add happenstance (aka embooggerance or accident) and the whole project is unforecastable? I think it would be easier just to sell and buy more or less simultaneously; but it's a free country- do what you want.

One final thought; is your mortgage portable...? All mine have been