In an uncertain property market, ‘let to rent’ may be the most sensible method of moving home, says Mark Crampton Smith of College and County letting agents.
The property market has been the victim of a double whammy during the downturn and the subsequent sluggish recovery. Whammy one. House prices stalled and then fell. Although there has been some kind of subsequent upwards momentum, it continues to be patchy and incomplete, and has left many properties at a value well below their pre-recession level. Whammy two. Banks and building societies, keen to repair the damage done to their balance sheets by the recession and by overexposure to bad debt, have been reassessing their lending policies. As a consequence, mortgages have tended to become more expensive.
But while the lines of supply and demand have been interrupted, that hasn’t meant a corresponding reduction in the numbers of people who would actually like to move house. Homeowners who want to switch to the countryside or to the town. Homeowners who want to upsize (or to downsize). Homeowners who want to live closer (or further away) from work.
The wish or the need to move is as strong now as it was before the economic storm of 2008 crashed onto our shores. On the other hand, it is a natural and sensible instinct in times of difficulty to adopt a cautious approach; to limit new financial commitments as much as possible. So how to square this particular circle? How to move house without selling in a subdued market? How to move house without taking on a new, maybe more pricey, mortgage? Well, there is a solution, one to which more and more people with higher value properties are turning: let to rent. It works like this. You let rather than sell your existing home; and you rent rather buy your new home. It might sound counterintuitive but it is, in fact, a very flexible and cost-effective way of making a house move.
Consider the advantages. You move to your desired area. You are faced with few upfront costs. You are not forced into a sale while the market remains depressed. You buy yourself time in which to track improvements in the sale value of your own home. You can arrange either a six-month or a 12-month tenancy for your property, which provides plenty of room for manoeuvre should you wish to sell up. You are not rushed into making a purchase yourself (renting gives you the scope to shop around both for your next permanent home and a more affordable mortgage). And, with some judicious foresight, you can get to enjoy a little income generation.
You can see why let to rent is becoming popular. Circle squared. But it does need careful, advance planning. The key to a successful let to rent is to make sure that your property is given the right rental valuation and is ready for the market. At College and County, we offer free appraisals as well as transparent, ethical asset management advice.
We will carry out a full check before the property goes to the market so that, as a landlord, you can be confident you will benefit from your home’s true value. And we will make sure the same scrupulous attention to detail is applied to the technical and legal issues of a drawing up a tenancy agreement.
So if you are thinking of moving house, letting and renting may just be the ideal prelude to selling and buying.