Second Property
Discussion
First world problem but keen to hear others experiences. Keep changing my mind and its driving me a bit mad.
We ve got a second property (my old flat). Lived there 3 years, then kept it as an Airbnb when we bought our house. It s performed well, but increasing council red tape (permits/planning) is a hassle.
Had a couple stay for a few months recently and loved the lack of changeovers. Now wondering whether to sell. We ve got strong equity, though Capital gains tax would hurt. Feels like a reasonable exit point.
Also timed things badly. I left the mortgage on variable. Intended but was offered 4.1%, now 5.5%, currently about to go onto paying 8% #f*cktrump
Original plan was to hold long-term (potential kids/pension), but less convinced now. Long term letting puts me off a bit with tenant rules.
Parents always said they regretted selling their first place but that was decades ago but it has stuck in my head.
Has anyone been in a similar position? Regrets or the opposite?
FYI, Scotland
We ve got a second property (my old flat). Lived there 3 years, then kept it as an Airbnb when we bought our house. It s performed well, but increasing council red tape (permits/planning) is a hassle.
Had a couple stay for a few months recently and loved the lack of changeovers. Now wondering whether to sell. We ve got strong equity, though Capital gains tax would hurt. Feels like a reasonable exit point.
Also timed things badly. I left the mortgage on variable. Intended but was offered 4.1%, now 5.5%, currently about to go onto paying 8% #f*cktrump
Original plan was to hold long-term (potential kids/pension), but less convinced now. Long term letting puts me off a bit with tenant rules.
Parents always said they regretted selling their first place but that was decades ago but it has stuck in my head.
Has anyone been in a similar position? Regrets or the opposite?
FYI, Scotland
Edited by BREMBOV6 on Friday 10th April 11:39
I'm kind of similar. My parents passed 2024 & 2025 (so not long) and I bought my sisters half of the house they left us. I'm in the process of very slowly "doing it up". I have absolutely no plan in mind for it whatsoever, accept for keeping it in the family, as I worry buying a house will just be unattainable for my kids in the future. I always frowned upon my parents decision to sell my Grans house when I was 17 and then a few years later struggling myself to afford a deposit.
My advice to anyone would be that if you have a property in the family, keep hold of it. It may not benefit you, but it's generational wealth. Drum this into your kids and their kids too.
My advice to anyone would be that if you have a property in the family, keep hold of it. It may not benefit you, but it's generational wealth. Drum this into your kids and their kids too.
I wouldn’t let the parents regretting selling thing drive it as it’s a totally different world now, especially in Scotland with the Airbnb licensing and planning faff. To me the bigger clue is you actually enjoyed having people in for a few months as it took away the constant churn. That suggests it’s maybe not a sell vs keep decision so much as Airbnb vs medium term furnished lets.
Before selling and taking the CGT hit, I’d be tempted to try a few 3 to 6 month lets for relocations, NHS staff or people between moves. Keeps the asset, cuts the hassle right down and gives you time to see how you feel once the mortgage settles rather than making a big decision while the SVR jump is annoying you.
Before selling and taking the CGT hit, I’d be tempted to try a few 3 to 6 month lets for relocations, NHS staff or people between moves. Keeps the asset, cuts the hassle right down and gives you time to see how you feel once the mortgage settles rather than making a big decision while the SVR jump is annoying you.
Leaving aside all other considerations, CGT is a huge issue for second home owners. The scope for avoiding 24% tax on your gain (18% if you're of modest means) is very limited indeed. And bear in mind a lot of that isn't tax on real value increase, it's tax on inflation. i.e. a wealth tax.
Once a BTL is sold there's scope for investing the proceeds in tax free ISAs and SIPPs (pension), not just free from CGT but free from Income Tax as well. In addition, you get the opportunity to use the small CGT tax free annual allowance on any investments held outside the tax free wrappers. The relevance of any of this depends on your overall financial situation.
Once a BTL is sold there's scope for investing the proceeds in tax free ISAs and SIPPs (pension), not just free from CGT but free from Income Tax as well. In addition, you get the opportunity to use the small CGT tax free annual allowance on any investments held outside the tax free wrappers. The relevance of any of this depends on your overall financial situation.
I know Scotland had some laws applied to landlords recent years, but I'm also aware loads of local investors happily still in that market. I'm involved in London Market, quite specific areas -close proximity to the well-known universities-. I have a small flat, purely rented to post-grad students or young professionals. If current taxation (stamp duty) will ease a bit, I would be more than happy to invest into another one and increase the portfolio- if I can afford obviously. Again, similar situation, I have a kid as well, so irrespective of current returns he will have a place to live, central-ish, or use the income in the future.
I need to stay though, my daily work is also dealing with large scale professional investments in the sector (mostly commercial) so I'm probably quite hands-on and have more experience than the average BTL investor there. It might sound too primitive or simplistic, after all metrics, it is mostly about location (demand and supply) that will drive your returns.
I need to stay though, my daily work is also dealing with large scale professional investments in the sector (mostly commercial) so I'm probably quite hands-on and have more experience than the average BTL investor there. It might sound too primitive or simplistic, after all metrics, it is mostly about location (demand and supply) that will drive your returns.
Thanks for the replies. Been thrown a bit of a curve ball.
I messaged the neighbour upstairs (only one) out of respect to say we were looking to sell, this was about 10 days ago, no response until yesterday. We have had a decorator in who finished yesterday and now ready for a survey/home report and pictures to happen this coming week.
Neighbour has now replied to say the roof needs work around c£2k and he has had three quotes but they were all done in December over 5 months ago! First time I've been made aware and if I hadn't of messaged when was he going to say.... Truly shot myself in the foot.
Any thoughts on best way forward? Get the survey done and see what is said? Guess the fact he's told me I am aware and later on down the line this could back fire.
Just typical as we are good to go. I've left my mortgage on a variable and really can't afford to drag this on any longer and avoid getting it on the market but also don't want to put buyers off with a property potentially covered in scaffolding!
I messaged the neighbour upstairs (only one) out of respect to say we were looking to sell, this was about 10 days ago, no response until yesterday. We have had a decorator in who finished yesterday and now ready for a survey/home report and pictures to happen this coming week.
Neighbour has now replied to say the roof needs work around c£2k and he has had three quotes but they were all done in December over 5 months ago! First time I've been made aware and if I hadn't of messaged when was he going to say.... Truly shot myself in the foot.
Any thoughts on best way forward? Get the survey done and see what is said? Guess the fact he's told me I am aware and later on down the line this could back fire.
Just typical as we are good to go. I've left my mortgage on a variable and really can't afford to drag this on any longer and avoid getting it on the market but also don't want to put buyers off with a property potentially covered in scaffolding!
BREMBOV6 said:
Thanks for the replies. Been thrown a bit of a curve ball.
I messaged the neighbour upstairs (only one) out of respect to say we were looking to sell, this was about 10 days ago, no response until yesterday. We have had a decorator in who finished yesterday and now ready for a survey/home report and pictures to happen this coming week.
Neighbour has now replied to say the roof needs work around c£2k and he has had three quotes but they were all done in December over 5 months ago! First time I've been made aware and if I hadn't of messaged when was he going to say.... Truly shot myself in the foot.
Any thoughts on best way forward? Get the survey done and see what is said? Guess the fact he's told me I am aware and later on down the line this could back fire.
Just typical as we are good to go. I've left my mortgage on a variable and really can't afford to drag this on any longer and avoid getting it on the market but also don't want to put buyers off with a property potentially covered in scaffolding!
It would just offset against your rental profits or knock the price off the sale to avoid cgt.I messaged the neighbour upstairs (only one) out of respect to say we were looking to sell, this was about 10 days ago, no response until yesterday. We have had a decorator in who finished yesterday and now ready for a survey/home report and pictures to happen this coming week.
Neighbour has now replied to say the roof needs work around c£2k and he has had three quotes but they were all done in December over 5 months ago! First time I've been made aware and if I hadn't of messaged when was he going to say.... Truly shot myself in the foot.
Any thoughts on best way forward? Get the survey done and see what is said? Guess the fact he's told me I am aware and later on down the line this could back fire.
Just typical as we are good to go. I've left my mortgage on a variable and really can't afford to drag this on any longer and avoid getting it on the market but also don't want to put buyers off with a property potentially covered in scaffolding!
Panamax said:
Leaving aside all other considerations, CGT is a huge issue for second home owners. The scope for avoiding 24% tax on your gain (18% if you're of modest means) is very limited indeed. And bear in mind a lot of that isn't tax on real value increase, it's tax on inflation. i.e. a wealth tax.
Once a BTL is sold there's scope for investing the proceeds in tax free ISAs and SIPPs (pension), not just free from CGT but free from Income Tax as well. In addition, you get the opportunity to use the small CGT tax free annual allowance on any investments held outside the tax free wrappers. The relevance of any of this depends on your overall financial situation.
Once a BTL is sold there's scope for investing the proceeds in tax free ISAs and SIPPs (pension), not just free from CGT but free from Income Tax as well. In addition, you get the opportunity to use the small CGT tax free annual allowance on any investments held outside the tax free wrappers. The relevance of any of this depends on your overall financial situation.
It depends upon circumstances.
Say the property you inherit happens to be more valuable than your own home and you don't intend selling your own home, then you have a tax fee opportunity. You have a period of time after inheriting, to nominate which property is your man residence. There is the clue for you. After many years of enjoying use, imagine the value.
If you are already maximising your ISA allowances, then of course you cannot drip the sale proceeds into an ISA.
The CGT allowance is now so small, it is useless. It might as well be zero.
Lowering that CGT allowance has now removed the incentive to sell any asset. Another economy restraint.
Edited by Jon39 on Saturday 25th April 08:29
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