Should I rent my flat out for another year or sell now in a poor market?

N1_EP

Hi There, 

I had my flat on the market from Nov. '24.  The flat is a rental flat which I used to live in and have rented out for some years. I am a working mum with 2 kids and a partner.  We live in our family home which has a sizeable mortgage on it. We wanted to sell the flat before our mortgage is to be renewed in Oct '25. 

Initially the sale of the flat was going well. I accepted an offer just above asking price of £550k shortly after it went on the market. This sale stalled and ultimately after a lot of messing about the buyers pulled out in January - this left a small window before the stamp duty rise came in. I had another offer at £550k. but this also didn't go through, the  buyers found somewhere else they liked more and pulled out. 

So now, after these 2 failed sales I am stuck trying to sell in a poor market.

I have tenants who are flexible and happy to rent on a month by month basis - happy to stay longer and I wondered if I would be well advised to just pull the flat from the market until things improve - hoping this will happen in September once the ripple effect of the stamp duty charge, tarrif nerves etc. have died down.  This would mean we would remortgage taking out a mortgage that has no charges on repayment so once the flat is sold we don't have to pay a penalty to repay a large chunk. 

I do want to sell but the estate agent has suggested I drop the price by 10% from £550k to £500k and this is such a big drop it really affects what I had planned to do with the money which was pay off a big chunk of the mortgage on our family home and put a good chunk into a pension.

all advice gratefully received. 
Katie 

El_Torro

I would have thought that having the house on the market now is better than in September. People are looking now to be ready for the new school year, September will be too late. 

I appreciate that you have had bad luck with buyers, I don't think your luck will improve by waiting til September though.

Why does the estate agent want to drop the price? You have already had two buyers (which fell through). Dropping the price will increase interest, though won't necessarily make the offer you accept more reliable.

poseidon1

N1_EP said:

Hi There, 

I had my flat on the market from Nov. '24.  The flat is a rental flat which I used to live in and have rented out for some years. I am a working mum with 2 kids and a partner.  We live in our family home which has a sizeable mortgage on it. We wanted to sell the flat before our mortgage is to be renewed in Oct '25. 

Initially the sale of the flat was going well. I accepted an offer just above asking price of £550k shortly after it went on the market. This sale stalled and ultimately after a lot of messing about the buyers pulled out in January - this left a small window before the stamp duty rise came in. I had another offer at £550k. but this also didn't go through, the  buyers found somewhere else they liked more and pulled out. 

So now, after these 2 failed sales I am stuck trying to sell in a poor market.

I have tenants who are flexible and happy to rent on a month by month basis - happy to stay longer and I wondered if I would be well advised to just pull the flat from the market until things improve - hoping this will happen in September once the ripple effect of the stamp duty charge, tarrif nerves etc. have died down.  This would mean we would remortgage taking out a mortgage that has no charges on repayment so once the flat is sold we don't have to pay a penalty to repay a large chunk. 

I do want to sell but the estate agent has suggested I drop the price by 10% from £550k to £500k and this is such a big drop it really affects what I had planned to do with the money which was pay off a big chunk of the mortgage on our family home and put a good chunk into a pension.

all advice gratefully received. 
Katie 

Sounds to me you are a Londoner ( or close by) and therefore directly experiencing the fall off in flat sales since April this year.

I note from one of your posts last year you originally estimated the flat value at £480k and presumably was content to sell at that level back then. 

Appreciate, you subsequently received offers that topped this but since those offers failed to materialise in actual sales prior to the termination of the first time buyers stamp duty holiday, you are now in a market where more and more landlords are selling up thereby increasing supply (and choice) for prospective buyers. In short, London flats very much a buyers market. 

Your agent's advice to drop price to £500k seems sensible in that it may introduce a new cohort of prospective buyers who would not have been searching at the £550k level. Can't see any point waiting until September to re-market, if anything there maybe a new torrent of flat listings by those returning from their summer hols.

Seems to me with a large hike in your home mortgage due in October, the ability to be able to free up substantial capital to reduce it would be welcome. As you point out the increase in your mortgage will be a struggle notwithstanding the net profit you are currently achieving from the rental.

Getting rid of your BTL property ASAP is also reccomended in an increasingly anti private landlord environment, and would give you greater mental headroom to refocus on other aspects of your domestic fiscal arrangements  such as improving private pension provision.

RHemmings

The ending of the stamp duty holiday has had an effect on the market. But, nobody knows exactly what will happen with the market over the next year. You have to make your decision and take on the risk. 

EAs get paid when houses sell. So, it's in their interest to do whatever will get your flat sold now. Whether that's in your best interest or not. There will be honest EAs who will properly advise you according to your best interest, but not all of them. 

You don't mention a mortgage on the flat. If you did have a mortgage on it, then you would be vulnerable to problems. You have great tenants now, it seems, but what happens if that changes? 

Personally I'm very debt averse. So, when I see you have a flat and a house with a large mortgage and you want to pay down that mortgage and put money into a pension, then that seems ... attractive to me. It would put you in a safer position overall, I think. 

ReadySteadyPop

N1_EP said:

Hi There, 

I had my flat on the market from Nov. '24.  The flat is a rental flat which I used to live in and have rented out for some years. I am a working mum with 2 kids and a partner.  We live in our family home which has a sizeable mortgage on it. We wanted to sell the flat before our mortgage is to be renewed in Oct '25. 

Initially the sale of the flat was going well. I accepted an offer just above asking price of £550k shortly after it went on the market. This sale stalled and ultimately after a lot of messing about the buyers pulled out in January - this left a small window before the stamp duty rise came in. I had another offer at £550k. but this also didn't go through, the  buyers found somewhere else they liked more and pulled out. 

So now, after these 2 failed sales I am stuck trying to sell in a poor market.

I have tenants who are flexible and happy to rent on a month by month basis - happy to stay longer and I wondered if I would be well advised to just pull the flat from the market until things improve - hoping this will happen in September once the ripple effect of the stamp duty charge, tarrif nerves etc. have died down.  This would mean we would remortgage taking out a mortgage that has no charges on repayment so once the flat is sold we don't have to pay a penalty to repay a large chunk. 

I do want to sell but the estate agent has suggested I drop the price by 10% from £550k to £500k and this is such a big drop it really affects what I had planned to do with the money which was pay off a big chunk of the mortgage on our family home and put a good chunk into a pension.

all advice gratefully received. 
Katie 

If you use the various price drop tracking apps available you will find that 10% isn`t really a big drop at that price level.

ReadySteadyPop

RHemmings said:

The ending of the stamp duty holiday has had an effect on the market. But, nobody knows exactly what will happen with the market over the next year. You have to make your decision and take on the risk. 

EAs get paid when houses sell. So, it's in their interest to do whatever will get your flat sold now. Whether that's in your best interest or not. There will be honest EAs who will properly advise you according to your best interest, but not all of them. 

You don't mention a mortgage on the flat. If you did have a mortgage on it, then you would be vulnerable to problems. You have great tenants now, it seems, but what happens if that changes? 

Personally I'm very debt averse. So, when I see you have a flat and a house with a large mortgage and you want to pay down that mortgage and put money into a pension, then that seems ... attractive to me. It would put you in a safer position overall, I think. 

Some interesting stats here.

https://www.standard.co.uk/homesandproperty/property-news/house-sales-plunge-in-april-as-stamp-duty-deadline-ends-buyer-stampede-b1230431.html

N1_EP

Wow - I love this forum it is so helpful to have this range of voices. 

@poseidon1 you're absolutely right I am a londoner and yes I posted back in November when I wasn't sure if I should sell. A resounding yes from the forum helped me make this decision and feel it was the right one. You're right I did originally think i'd be getting £480k before estate agents came and valued it. they all pitched a lot higher so I ran all my figures from that. 
It's helpful to be reminded that selling asap is a good idea.

@RHemmings thanks also - it does sound like i am indeed best off dropping the price and persevering. I have £60k mortgage on the flat. 

@ReadySteadyPop - interesting you think 10% isn't really that much. I'm struggling with it as literally every penny counts. I have no pension so the flat sale is meant to kick start that. I planned to put £150k into a pension the rest against the house but now it will be more like £100k in the pension. i'm 46 so very late sorting this out and worried about it. I always planned that the flat would be my pension either by income or selling at the point of retirement but it seems that was no longer a good plan hence the sale. 

thanks for that stats link i'll check it out. 

thank you so much all - so helpful!

MeteredOut

OP, just be wary of what ReadySteadyPop says. He's been predicting a market crash on these boards for years (I read he was banned under a previous username because of his trolling) and is in denial over his decision to sell his home at the time. He now spends the majority of his time here trying to talk down the market, like some sort of ghost version of his previous account. Read some of his posts and you'll see.

I'd listen to the others who have responded; they are well respected posters on these boards.

I suspect you fell for an EA who gave you a high valuation in order to win your business, so accepting an offer somewhere between what you thought you might get £480K and the probably-now-unrealistic £550K might be a good result for you. 

Have you considered moving to another agent, or are you locked into that agent (be wary of introducer clauses in your contract if you do decide to move to another EA).

ReadySteadyPop

N1_EP said:

Wow - I love this forum it is so helpful to have this range of voices. 

@poseidon1 you're absolutely right I am a londoner and yes I posted back in November when I wasn't sure if I should sell. A resounding yes from the forum helped me make this decision and feel it was the right one. You're right I did originally think i'd be getting £480k before estate agents came and valued it. they all pitched a lot higher so I ran all my figures from that. 
It's helpful to be reminded that selling asap is a good idea.

@RHemmings thanks also - it does sound like i am indeed best off dropping the price and persevering. I have £60k mortgage on the flat. 

@ReadySteadyPop - interesting you think 10% isn't really that much. I'm struggling with it as literally every penny counts. I have no pension so the flat sale is meant to kick start that. I planned to put £150k into a pension the rest against the house but now it will be more like £100k in the pension. i'm 46 so very late sorting this out and worried about it. I always planned that the flat would be my pension either by income or selling at the point of retirement but it seems that was no longer a good plan hence the sale. 

thanks for that stats link i'll check it out. 

thank you so much all - so helpful!

Property as a pension or all your money "in property" was always a risky strategy, higher interest rates just underline the risk.

MysteryMe

I wouldn't take it off the market and put it back on later in the year.  How is your current asking price stacking up against comparable properties and recent sales? Your EA will know current trends so if they are suggesting it may be over priced, then it seems a sensible move to make the reduction.

Hoenir

N1_EP said:

I do want to sell but the estate agent has suggested I drop the price by 10% from £550k to £500k 

£500k is the cliff edge for stamp duty. £525,000 costs the buyer an additional £6,250 in stamp duty.  

How does Capital Gains Tax impact your net gain?