Relocation doesn’t mean selling your home
Whether your reasons to move are to take that perfect job or live the lifestyle you desire, it’s no longer necessary to sell your home. More people in this position are taking advantage of the growing private rental market, which now accounts for more than 20% of the total housing market in the UK. So, if you need to move – or want to move – should you sell your home and buy in your new location, or would you be better to let-to-rent?
How the costs of moving stack up
One of the most common reasons to let-to-rent is to avoid the huge costs of relocation. If you’re moving from one part of the country to another, perhaps for work reasons, the costs of transporting furniture can run into hundreds or even thousands. And selling your old home will encounter legal fees, estate agency commissions, and so on. In fact, according to research conducted by Post Office Money and the Centre for Economics and Business Research (CEBR) shows that:
- The costs of moving home in the UK increased by 59% in the ten years to April 2015
- The average cost of moving home in the UK was nearly £12,000 in April 2015
- The average cost of moving home in the south of England was £16,510
- In London, the average cost of moving was almost £28,000
Take the let-to-rent option, and many of these costs will fall out of your calculations. You might find your only costs of taking a great new job are no more than the fuel from one location to another.
John’s let-to-rent story
John was working for a company in London, not far from his home, when he was offered a two-year contract by another company in the North East of England. His wife agreed that the opportunity was too good to miss, but selling their home would take months. Running two homes would prove too expensive, and commuting would be too high a cost to bear: both in terms of money and lost family time.
John explained his plight to a friend, who suggested he should let-to-rent. John decided to look into the possibility, and found that he could let his London home for around £1400 per month while renting a similar property for around £475 per month near to his new job (private rental market statistics, 2014-15). Not only would the rent he received on his existing home pay rent on a new home, but it would also almost pay the rent on his new home.
Suddenly the deal had escalated in value. He could keep his existing home, move with just personal belongings, and then when his two-year contract came to an end would still own a property and the capital gain on it. He explained the idea to his wife and accepted the new position two days later.
Is let-to-rent right for you?
Of course, every individual situation is different. If you’re thinking of moving to a new location, either on a long-term or short-term basis, the savings you make by utilising a let-to-rent strategy will depend upon comparative rental costs, house values, and how you plan to manage your ‘new’ rental property (your existing home) as a landlord.
If you’re thinking about relocating, why not get in touch with Ezytrac? Do not hesitate to contact the team on +44 1522 503 717. We’ll help you work out whether it’s better for you to sell your existing property and buy elsewhere or employ a let-to-rent strategy.
Stay tuned for my next article about the top five advantages of let-to-rent relocation.