My one bedroom flat in central London has been on the market since September. An unfortunate perfect storm of high leasehold prices, etc, means viewings are not converting into offers.
I used to live in the flat and it is sweet but I moved counties 3 years ago (renting myself).
My tenants left this weekend because they (understandably) didn’t like the insecurity of not knowing when it might sell (despite assurances that it would take a long time).
The Renters Right Act makes me nervous to try and rent again for the shorter term while the market recovers and relaunch.
I’m not sure if any tenants would want to rent a flat that is on the market.
So the flat will now cost me a chunk in mortgage and service charge a month.
There are building restrictions around short term lets but I might be able to plead my case with the board - although short term lets have their own costs and risks…
It is a terrible time to sell but I’m not convinced prices will bounce back to pre-Covid prices for flats any time soon and honestly would rather have the deposit in a tracker fund.
I’m really unsure what to do… I appreciate it is unbelievably fiscally inefficient to rent out my actual home and rent where I live. There are reasons…
Any ideas or experiences? I always get great advice here!
Thank you!
*edited some - but not all - grammar errors
** Edited to say - thank you so much for the incredibly helpful comments. I really appreciate them. I knew I would get great feedback from this community. Thank you!
You need to decide if to keep renting and hope to get a better price in future or sell now. Will the increase in value plus any profit after tax etc from renting outweigh the hassle and not having access to the capital and income youll get from sticking in an account
If you price at the right price it will sell. If you take on tenants then decide to sell you can’t do that in first 12 months of the tenancy
" Ground 1A - sale of dwelling house
You can use this ground if you intend to sell your property. You cannot ask your tenant to leave within the first 12 months of a new tenancy for this reason."
Equally once you evict on those grounds you cant then rent for a while, I ‘think’ a year from the possession date
"The landlord won’t be able to re-let or re-market the property for letting or the grant of a licence to occupy (eg Airbnb) for a “restricted period” from the date the notice is served until 12 months from the later of:
the relevant date in the notice (ie 4 months after the notice is served), and
the date on which a claim form or particulars of claim are filed with the court to bring proceedings for possession.
A landlord or agent will commit an offence if they let or market the property for re-letting as a tenancy or a licence (eg on Airbnb) during the restricted period, say if no buyer is found. The agent will have a defence if they can prove that they took all reasonable steps to avoid it."
You need to look long and hard at the bottom line. Calculate your total costs for an empty property over the next 6 months. Could you knock that off the asking price and shift it sooner? It’s time to cut your losses if you can’t absorb the impact of that and wait for the market to recover.
Ps if not sold for 6 months you are likely pricing it too high above the real market value especially if you haven’t had any offers. So the idea that waiting 6 months or a year you will get a higher price than you are listing it at now seems unrealistic. Prices falling in central london at mo
“In the past year alone, the average price of an inner London flat has fallen by 6.2%, stripping around £35,000 from what sellers can expect to pocket”
On the other hand, it isn’t easy to sell if you have tenants in there while you are trying to do viewings and it raises a lot of questions in the minds of buyers, like is this guy going to be able to get the tenants out before we buy. So maybe this was one reason why it didn’t sell. You can hand it over to a short-term lets agency if its in central london and they can air bnb it for you, and then just make sure it is empty for viewings. So it might actually be easier to sell now. But don’t expect the market to recover any time soon. Did you try auction sale?
I wouldnt advise you to re-let as the risks are now too great and if you did get a purchase offer, you’d likely lose it as it would take around a year to evict a reluctant tenant. I would just take a hit now on the price and sell asap. I think prices are going to drop further.
As pointed out. You can’t re-let and keep it on the market because you can’t evict a tenant to sell for the first 12 months.
It seems you just have to deal with the costs while you wait to sell, or decide to take it off the market and re-let.
I’m not sure where in the country you are, but based on friends and family who have sold recently in my area and on stats I’ve heard quoted on podcasts, it seems that agents are consistently overvaluing property. A very large fraction of properties are having to be reduced. You may need to reduce the asking price, and by a significant amount.
If you want to sell fast, you could consider auction or “modern method of auction”.
As my mum used to say, it’s only worth what someone will pay for it. All properties will sell if they’re priced right.
I got one for a bargain a decade ago. Put in a really lowball offer and no one else bid. Had same tenants in for a decade now and ROI is looking very good.
You have no good options so whats the least painful
1 consider listing yourself as occupier - stick a couple of pieces of furniture in there. Not saying you should just consider it
2 do not re rent it
3 get place clean and tidy
4 if it hasn’t got real offers in 3 months drop the price
5 auctions are actually fine just speak to 3. Be realistic on reserve price and look at ts and cs. There is no guarantee a property will sell of course
Its a setback but not life changing, grit your teeth and move through it. A greek philosopher once said failures are the pillars of our success. I have a lot of pillars propping up my success
I dont think thats a good idea. At the very least it could lead to the home insurance being invalidated and charges of Council Tax fraud if @LandlordTenant is not actually resident.
Just wanted to say thank you again for all the responses. It’s been really helpful to give me perspective and to have grown ups shine a light on this quagmire.
My conclusion is… I’ll have to furnish it/ stage it so it might as well be in use… It will be a very expensive way of letting all my wider family have jaunts up to London while it stays on the market.
I’ve just done a 15% drop in price so hopefully that gets things moving… It feels horrible though…
It is SO strange - there must be so many properties in a similar situation, there must be a better way… Maybe 3-4 months banned from re-letting to avoid unscrupulous landlords shifting tenants, but a year… It is pretty punchy…
Fingers crossed it sells… Trying not to worry, but…
Honestly, if I knew they would leave it immaculate I would happily give it to someone for free during this weird time. Someone should do a guardianship portal which is more like AirBnB and we could pick our favourite temporary free tenant (like a nursing student…) and maybe get some respite from council tax or something…
You cant relet but there’s maybe options for a caretaker type arrangement (check with a lawyer) or try the sites that do house sitting - these have people who have been verified by having done it in others’ homes- at least you might get to house sit yourself in some interesting places. Message below was from a friend of mine
Otherwise if you can live there enough to count as resident there, a lodger arrangement might be posdible (not governed by RRA and far fewer rights easier to evict if needed, again check with a lawyer)
Good luck
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I don’t know where is your flat in London but selling flats in London seems bad market. I am selling my flat which is my home and it’s on the market for 12months. Nothing wrong, perfect location, EWS1 complainant, gated community with all facilities gym, pool, concierge 24/7, extended lease to 999years with no ground rent on addition 88years with only £75 ground rent, service charges I would say not high compared to others in same area.
There so many other flats for sell in same development. I have dropped price twice but not willing to reduce anymore because I know that it rights price. The reason is that I compared the prices for sold prices on Rightmove and also I have sold one flat.
I would suggest that if you can wait then you can rent out again but if not then you can try marketing with different estate agents.
I think the market may get quite a bit worse yet as more landlords bring ex-rentals up for sale. Prices could be squeezed further and you have to consider how much your losing on the property each month. Re-letting is going to be too much of a risk for many landlords as there are many bear traps in the legislation.
There is so much uncertainty in economy so it very difficult for all buyers and sellers and it could get worse before it can get better. So as individual need to decide if they are selling. Also reducing the price that does not mean that it will sell quickly.
It’s a tricky situation, especially with the mortgage and service charges continuing while the flat is empty.
I think the main thing is working out whether renting it again would cover enough of those costs to make the hassle worthwhile. The main concern would probably be having a tenant in place when you eventually want to sell.
If short-term letting is allowed, it could be another option, although the extra costs and management involved are worth considering.
There probably isn’t a perfect answer, but looking at the numbers for each option over the next year might make the decision a bit easier.
