Opinions on selling a BTL

Roger175

We've been where you are having retained our original family home and rented it out. We made a similar list of pro's and cons. 3 years ago, we reached a point where there where no cons, only pros and we decided to sell. We are so glad we did, the feeling of relief has been amazing and the money we released is now doing very well in investments without the hassle.

A few comments regarding the CGT calculation. Firstly, you are entitled to 9 months of grace - you calculate the period and then deduct 9. I would actually recommend going onto the government website and entering all the information into the on-line calculator, you don't have to save this, but it will give you an accurate figure. Secondly, you are entitled to deduct any costs for improvements you have made to the property, such as new kitchen, windows/doors etc and given you have owned it for nearly 20 years, I imagine there might be some (repairs don't count, only improvements). You are not normally required to provide receipts for these and in our case we just put sensible figures in, because we had owned the property for nearly 30 years and genuinely couldn't recall the exact figures. Ours were all accepted including upgrading the boiler to a condensing type.

badger09

I doubt the fiscal situation of BTL will become any easier and the regulations are tightening. Fiscal drag will also continue to bite. You’ve been very fortunate to have had the same good tenant for so long. No guarantee that will be the case next time.
I would say sell now. Take the CGT hit and diversify your assets.

aroominyork

While I am a big advocate of ILG (I now hold more ILG than US equities), I am trying to embrace corporate bonds a bit more (investment grade and shortish dated). It might be worth including such a fund in your list of options.

Anyone wanting to join the short dated bond discussion can head over here.

jimjames

Currently having the same discussion as tenants moving out from one of our BTL later this year. Still not fully decided on the way forward, tempted to retain as we have another potential tenant lined up and the returns are still reasonable compared to what we'd get back after CGT. Selling after retirement would give (hopefully) lower CGT with timing the sale at the right point.

Mrs_Z

Just to add few sentiments to the illiquidy of the asset. I've been an executor for 2 estates in the last couple of years, as well as through a nightmarish process of a sale of our holiday home abroad.

First, the holiday home - ok, this was abroad and different rules and regulations apply. First of all, we had owned the property for almost 20yrs and there was no capital appreciation whatsoever. Infact, we sold at loss and the sale took 9 months to complete. Never again.

Sale of a flat on estate of a friend. Such a lovely flat and good location. BUT it has less than 60yrs left on the lease AND an absent landlord. Another nightmarish sale.

Sale of my parents flat - again this is abroad so different market forces apply but I've been astonished that a flat, which they owned for 45yrs has not appreciated in value at all. The market is so bad that it has had 0 interest since being on the market since November. We've reduced the price twice and it's already the cheapest for its size for the area. Yet the service charges are payable every month.

Property is often referred to as asset but it can be, or can become a liability as well.

We used to have a BTL as well. The first 10 years were fine, then we started to get tenants who'd stay a year or two at most and again, it became a headache having to advertise it, and decorate between tenants and what have you, so we sold it, just before the lockdown, and I'm so so glad we did.

UncleK

One way of looking at this (may not the only way, but sometimes a useful perspective) is to say, if I had £xxx,000, would I invest it in a BTL property? Strip out emotional attachment.
Lots of negative vibes from your fellow forumites, but ultimately your call.