Support, Advice and Experience within the Property Market

To sell or not to sell

From Robert Ulph on July 7, 2015

Interestingly in the first half of this year we have seen a slight increase in the number of landlords deciding to sell and I am keen to understand why this may be.

At first look many of these were ‘incidental landlords’ as at the time they needed to move their property was in negative equity so they opted to (and were able to) rent it rather than sell. Now with an improved market they are in a position to sell to make their next move. Then there are always landlords who will be selling for a range of reasons and again with the prices at a high who can blame them?

If landlords come to me for advice though I will always ask them why sell if they can afford to let. I also ask homeowners who are selling and moving on whether they could consider letting their property instead of selling too and to many this is a surprise that it could even be an option and potentially affordable to do.

The market is strong and property prices are still going up and evidence seems to suggest this will be the case for the next few years. The Royal Institute of Chartered Surveyors (RICS) carry out a regular Residential Market Survey and recently reported that house price inflation had reached an eleven-month high and supply reached a low. RICS Chief Economist, Simon Rubinsohn, stated: “There had been some hope that the removal of political uncertainty would encourage more properties on to the market, but the initial indications are that this is not proving to be the case. As a result, it is hardly surprising that prices across much of the country are continuing to be squeezed higher, with property set to become ever more unaffordable.”

Rubinsohn added that the feedback RICS had received from its members “points to prices at a headline level rising by another 25% over the next five years”. This, the RICS says, suggests there was no real confidence among its members that effective measures to provide a major boost to new supply would be delivered by the government any time soon.

So if homeowners can afford to let their property and still buy then why not become an investor landlord instead? We have seen individuals recently who have done exactly this and were actually surprised that they could afford to do it. Releasing some capital to move on but retaining the old property as a buy to let is not just for the wealthy few. Admittedly it doesn’t and can’t work for every property owner – especially if you need all of the capital to move to your next home – but it may be worth at least getting a letting appraisal of the potential value to see if the figures work for you.

Any questions on this or any other topic please do contact me.