Need to move for ~2 years... What do I do with my flat?

unmanagedexpectations2020

Looking for some help.

I'm a 31 year old professional who lives in Edinburgh with my partner. I bought (just my name on the deeds and mortgage) a 1 bedroom flat in September last year. Plan was to live there for approx 5 years with the partner whilst he finishes his professional training and saves up a deposit of his own so I could sell up and we could then buy together. Have a mortgage of approx £110k.

Horribly, my little brother died in January, and as a result, I need to be closer to family in London for the next 2 years or so. I've been located in London ever since he died but need to head back to Scotland next week. Partner has been able to move his next professional training course to a London provider (starting in September) and I have permission to transfer my role to London. Cash flow isn't a problem. But that leaves me with the question... What do I do with my flat?

I know that the advice on these boards is usually sell unless you are clued up on becoming a landlord, are happy to run a letting business and think your property is a good one to let! This suggests that I should sell up... However, I've had the flat for less than 6 months, and am on a 3 year fix with an early repayment charge which takes me to September 2022, by which point we will need to either move back to Edinburgh or sell up to permanently settle in London. If I did sell now, I still wouldn't have enough equity in the flat to put down a deposit in London, and I'm also reluctant to do that when I'm 80% sure that we will be returning in 2 years. 

I'm thinking about looking at listing the flat on Airbnb / short term letting sites and getting a management company to manage it. My emergency fund  and salary would allow me to pay both the mortgage in Scotland and rent in London (although with a reduction in fun money activities) for up to 2 years, but the property would be empty which neither the council or my insurers would approve of!

What would you do in my situation?

rachel230

I would seek a professional estate agent who you can trust to rent out your flat. It's easier than airBnB and your mortgage company will more readily agree to that (though may charge you higher interest)

davidmcn

If your lender is willing to provide consent to let, I would expect it's likely to be only as a Private Residential Tenancy (i.e. a "normal" lease), not to permit a holiday let operation. Similarly, you can add the lender to the list of people who won't want you to leave the place unoccupied.

[Deleted User]

I would let your property and engage a managing agent to collect rent and site visits etc. Its not that hard to be a landlord if you just do what you are supposed to do, EPC, gas certs, deposit etc. Register to pay tax on rent. Insist on a professional tenant etc. Im sure in the circumstances your mortgage company would provide a consent to let. Once you are out of your fixed rate and your partner has his deposit, you can sell. 

Sorry to hear about your little brother  

bitsandpieces

Sorry to hear about your brother As far as Airbnb in Edinburgh, I'd be cautious. I visit the city fairly regularly, and it looks like lot of people have put money and properties into Airbnb in the past few years. There seem to be a lot of professionally-ran places, and Edinburgh can be an excellent place to rent a really nice holiday flat very cheaply because of all the competition - great when I'm going there for a couple of nights away, but not so good if you're thinking of renting a place out! I also wonder if the city will tighten up rules on short-term rentals any time soon.

I can understand why you'd not want to sell - and I guess if you'll be leaving the place empty otherwise any profit is better than none - but do factor in the opportunity cost if you end up with a poor return on a large asset for a couple of years, and also the risk of damage.

kinger101

You need long term lets.  You won't be there the turn the place over for Airbnb.  

steampowered

Really sorry to hear about your brother.

Do you think you might want to come back to the flat in 2-3 years time? 

If yes, I would keep the flat for now. If no - either because you think you'll stay in London, or you think you'd want to buy a bigger property once your partner is earning, I'd sell it. 

unmanagedexpectations2020

I'd ruled out a long term let as I'll need to return to Edinburgh once a month for work and if I can't stay in my flat, I'll need to pay for hotels. I could look at the what this would cost versus rental income but just the idea of paying for a hotel for a week in August gives me the fear!

My mortgage is with Santander who say that they don't rule out consent to let for Airbnb so I may approach them to ask about it, then look at insurance to at least know if it's possible. This would then allow me to get a short term let management consultant to deal with people staying when I'm in London.

I'm 80% sure we will return to Edinburgh after my partner's training course is up, and that plus the ERC makes me reluctant to sell... The issue isn't even paying the mortgage which is very reasonable, but it's keeping everyone happy if it's empty 3 weeks out of 4...

[Deleted User]

The Scottish government is cracking down on Air bnb so that's something to keep in mind if you go down this route.
https://www.edinburghlive.co.uk/news/edinburgh-news/scottish-government-announce-airbnb-crackdown-17534113
If you can afford to keep the property empty and will return to it once every 4 weeks then I'd be tempted to do that instead of going down the short term rental route.  Your insurance will go up although I'm not sure how that would compare with the insurance of running a short term rental business.