Selling your home, or renting it out: What are the pros and cons?

The UK property market effectively 'shut up shop' along with the rest of the country on March 23rd this year as the government implemented lockdown measures to combat Covid-19, effectively closing the door on the plans of many who were due to move home.

The property market re-opened its doors on May 13 in England, and for many whose plans had been put on hold due to the pandemic, lockdown has given them plenty of time to weigh up their options before making their next move.

If it is time to move into a new home, you may be wondering what to do with your current property – do you sell, or rent it out?

Many people sell their homes to purchase another, but if circumstances are right you may be faced with the choice of renting your property instead. But, is renting a viable option?

With the UK property market now back on the move, we look at the pros and cons of renting and selling your home to help you make that all-important decision.

The pros and cons of renting your current home:

The pros

• Renting out a home is a source of additional income. You can secure capital growth by keeping your property and renting it out.
• You can outsource landlord responsibilities to a trusted agent for a fee to free up your time. Please, make sure they are a member of the NALS, ARLA or UK ALA.
• Tax deductions are available to landlords. You can expense things such as replacing furniture, painting, accounting processes, and professional cleaning services.

The cons

The pros and cons of selling your current home:

The pros

• Only owning one property means you can spend more on your new home. Selling a home releases equity that can be spent elsewhere. Selling is less time-consuming as you only have one property to worry about! You will face fewer unexpected costs, e.g. damage caused by tenants.

The cons

• You will be selling an asset that may grow substantially in value. If your home has negative equity, you might have to pay it off and redeem the mortgage. No extra income as you will not be letting your home out. Selling may take time if you use an estate agent or auction and can slow down the process of buying your new home.

Deciding whether to rent or sell your home should not be a decision made overnight as there are many important factors to take into consideration. Talk to us here at Pocock & Shaw and we can advise you of the current market and what would work best for you.