Updating post from Reddit.
Hello - I’m looking for some advice please.
I bought a 1-bed shared ownership flat in SE London zone 2 in 2015 and finally staircased to 100% a couple of years ago.
My latest fixed term deal comes to an end next June and, for family reasons, I will be looking to leave London at that point. I’m considering my options: sell, or keep as a rental property.
From what I can gather, both sales and lettings markets in London for this property type are slow at the moment, so there doesn’t seem to be an obvious option.
The flat was last valued in 2023 when I purchased my final share at 340k and based on that valuation I have around £70k equity. However, the local EA told me that, if selling now, he’d recommend putting it on the market for £300-320k. If the lower end of that is achieved it doesn’t leave me with a lot left after fees. The flat is in New Cross, which has seen some regeneration lately with new developments springing up, but that just seems to have saturated the market if anything.
So selling doesn’t look too appealing, but equally, keeping as a rental property doesn’t either. The landscape for landlords doesn’t look great anyway and, as a higher rate taxpayer, after tax it really looks like it’ll be tricky to make any profit whatsoever. Especially with interest rates still high.
From an investment point of view, there’s the prospect of the extension to the London Underground, which would see two new tube stops built close by. (The current nearest one is 30 mins walk away, though two London Overground stations aren’t too far away.) However, whilst there does seem to be some momentum behind this lately, there has been before and it hasn’t happened. And even if it gets announced tomorrow, it will take until 2040 for construction to be complete and I imagine any increase in value as a result would take years to materialise.
My gut tells me to just sell up and get out. Accept that I’m not going to walk away with much but that holding on is too risky.
But does anyone disagree? Is anyone seeing an opportunity here that I’m missing? Would be great for any pointers or advice if anyone would do things differently.
Thank you for reading.
You've just answered it all for yourself there, walk away
I’m a London landlord, albeit not at all in the leasehold apartment market. Here is my take:
Holding property in London is not for the faint of heart: it might take 10-20 years for that Bakerloo extension to be realised, but on the other hand it might never happen.
The market for one bed apartments may boom, and/or the Labour government may tax you to ensure you never make a profit!
You might rent the apartment out and get an amazing tenant who cares like it’s their own & pays on the nose. Or one who trashes the place and doesn’t pay.
If you have the stomach for these sorts of risks & are prepared to work at it, then it could be the start of a nice investment portfolio (as my first buy has been for me).
But if you don’t like the idea of some of the downsides, then go with your gut & sell if you can get out with some upside.
Hope it helps & good luck with whichever way you jump.
If you're sure leaving London is a permanent thing, sell up. If you might want to move back in a year or so, keep hold.
If you’re moving out of London and you’ve only got the one property then you’ll be eaten up by fees assuming you don’t end up in trouble with your tenant.