Should I sell my house in the UK and buy abroad?

Louloulous

Hi there!

I am currently living is Portugal and have been for the last 1 year and a half. My partner and I own a property in the UK (Manchester outskirts) and have been renting it out ever since we left. The current fixed mortgage we have ends in Nov and we are trying to decide what to do next...

Our house has increased in value (by around 50k) and we plan to stay in Portugal or abroad for the foreseeable future. Our outgoings paying for rent here are pretty high and of course we would be better off paying back a mortgage than high rent prices. 

Our thinking is that with the price of living crisis in the UK that house prices are not going to increase much this year as no one can afford to buy as it is, let alone now ... so, should we cash in and buy something here or do we keep hold of the property in the UK? 

Any advice on this would be much appreciated. 

dimbo61

How do we know what's best for you !
You need to evict your existing Tenants which could take 12/18 months.
Are they on a fixed term ?
Capital gains tax !
Would you buy in Portugal ?
Age, jobs, long term plans ? Pensions ? Family ?
Life is short so do what's best for you 

newsgroupmonkey_

The Government is still forecasting 7.4% growth this year.....

https://www.telegraph.co.uk/property/house-prices/house-prices-will-jump-20k-year-boom-lasts-another-12-months/

GDB2222

Being a long distance landlord is quite difficult, so I think you would be best to sell up here and buy in Portugal. I think that the cost of living crisis is likely to hit Europe as well as the UK, although perhaps not as hard.

Getting the timing right is more difficult, particularly as you presumably won't want to sell until November, as there's probably an ERC on the mortgage?

MEM62

Louloulous said:

we plan to stay in Portugal or abroad for the foreseeable future. 

How long is that? 

Whilst there are those that do not, many that move overseas (including those that considered it a permanent move) return sooner than expected for either financial, family medical or other reasons.  

jimbog

A number of friends who sold up to move abroad found that what prevented them from returning a number of years later was not being able to get on the property ladder in the UK

theartfullodger

You'd be paying CGT (almost certainly ) on the sale of your BTL.

Were I younger I'd move abroad.  It's such a mess here now with the arrogant corrupt weak clowns in charge, the reduction in rights, the cost of leaving on top of covid, cost of living etc.  Really really sorry and gloomy for the young...

steampowered

Owning the house you live in makes more sense than renting while being a landlord, because:

1) There is capital gains tax when you sell a rented property. No CGT when you sell your own property.

2) You need to pay income tax on the rent you recieve. As a non-resident landlord, you should be filing a tax return; if you are not doing that then the tenants are supposed to withhold tax from the rent they pay. 

3) Rent is typically higher than mortgage repayments, so you would pay more overall.

4) Interest rates on BTL mortgages are higher than interest rates on owner-occupier mortgages.

5) Owner occupiers don't face letting agent fees and other landlord costs.

6) No risk of the tenants failing to pay the rent or trashing the property.


If you want to stay in Portugal, the obvious answer would be to sell the UK property and buy in Portugal.

If you plan to stay in the UK, you might prefer to keep hold of the UK property.

badger09

Not offering advice on whether to sell or not, but thought I'd point out that CGT might not be too big a consideration.

You say you & your partner have lived in Portugal for the last 18 months, so presumably you are non UK resident for tax purposes. In which case, CGT rules are different. As the property is owned by 2 of you, you also have 2 x GCT allowances  

https://www.gov.uk/guidance/capital-gains-tax-for-non-residents-uk-residential-property

[Deleted User]

The house price insanity will never end. War, brexit, pandemics, nothing makes prices go down.

nick1234

As rates will need to keep rising due to inflation, i dont see huge house price growth in the next 5-10yrs

and if you are just selling to buy in Portugal, you still have property exposure (accounting for any different price levels). 

The UK is finished, if my job didn’t require me to be here id be gone