To let or not to let

G_M

Letting is a business. You need to do serious maths and work out if it's worth it:

Loan to Value
CGT
Income Tax
Capital Gains Tax
Agent fees (or self manage)
Risks


Then you also need to ask yourself if you want to be a landlord. There's time involved (even if paying an agent) and potential risk/stress. Yes, get the the ideal long-term tenants and it can be great, but you can never guarantee that's who you''ll get.........

itwasntme001

Socrat wrote: »

I would do some research on the potential value of the property once you are ready to buy another and go from there. If prices are on the rise and you can reasonably expect an increase in value in that time, it's worth hanging onto it. Do bear in mind though that if you do rent it out, even with the greatest of tenants in , you will most likely have to redecorate (if not do any other work) before sale. Take it all into account.
If the area is decreasing in value, I would sell now and probably invest the money in something like P2P lending. Not being in a chain will put you in a much better position when it comes to buying and would save you a bit more if you were to do P2P.

I would never put money in P2P for money i needed to use to purchase something within next 5 years or so. P2P is very risky and i very much doubt those who do invest really know what sort of risks they are taking on. The headline rates imo do not compensate for the risks at all. Even money i didnt need for a long time i would never invest in P2P. P2P is over as a good investment. Its had its day and those investing now need to be very careful.

Socrat

Itwasntme, this is what I said I would probably personally do. I would not invest all the savings though.

System

schizometric wrote: »

I can see on HMRC that there can be a tax implication for buy to let when selling? Which we definitely do intend to do?

Did what you're intending. The tax implication is capital gains tax. Depending on how long you've lived there, how many years you've rented and how much the value goes up between buying and selling will depend on how much you pay. When we sold ours we'd lived in it 12 years, rented out for 7, price had risen £75k and we ended up paying nothing after various reliefs had been applied which offset some of the gains taking us well under the £11k CGT personal allowance. Some of those reliefs are being cut by 50% but you should still come out OK if you've owned less than a decade, will have lived in it much more than you rented and its value has risen less than 6 digits.

I would add that even if it looks like you'd have to pay CGT I wouldn't let that stop you from doing it. After all you'd be mad to turn down what is effectively free money you've got merely from just owning a property because you'd have to pay tax on it.