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There are a number of things to consider..

If you have a mortgage on your property you may need permission from your lender to rent it out.

If you’re planning to rent out your property for a certain period of time before moving back in, your lender may agree to let you do this through your current mortgage deal.

This is known as ‘consent to let’ and will usually allow you to rent out your property for up to 12 months.

However, if your plan to rent out your home is more permanent, your lender will require you to move on to a buy-to-let mortgage – either with them, or with a new lender.

There are a host of scenarios that could mean renting out your property, rather than selling it, is a better step for you to take:

  • You’re moving out temporarily
  • You’re buying another property with a new partner and want to keep a property as an investment
  • Your property is on the market but isn’t selling and you need to move quickly
  • You’re unsure if you want to move and want to ‘test the water’ in a new location, while keeping your home if things don’t go to plan
  • You want to use your home as your first rental property and start building a property portfolio

Selling your house, rather than renting it out, could be a better option for you if you find yourself in certain scenarios such as:

  • You need to release the money tied up in your home to buy your next property
  • You’re moving a long way away and want to remove ties to your current location
  • You can’t afford to own your current property as a buy-to-let and buy another home to live in
  • You’re in financial difficulty and need to pay off your mortgage by selling your home
  • You don’t want to become a landlord

There are several pros and cons to selling your home or renting it out and you should consider each against your own circumstances and needs…

The pros and cons of selling

Pros

Cons

You could release equity to buy your next home

Selling could mean you miss out on further growth in your home’s value

You won’t have to pay capital gains tax if your home is your main residence

If your property is worth less than your mortgage, you’ll have to find the difference to pay off the loan

You won’t be responsible for more than one property

Selling a property can take a long time

 

The pros and cons of renting out your property

Pros

Cons

Renting out your home could provide you with a steady income stream

You may need to invest money to bring your property up to rental compliance standards

You still own your property, so you could benefit from long-term capital growth

You may have ongoing maintenance costs

The rent will cover your mortgage, releasing you from that particular burden

You’ll pay more stamp duty if you own more than one property

If your circumstances change, you still own a property you can live in

You may have to pay capital gains tax if you decide to sell the property

NB – All comments made here are generic and we would always advise you speak to a reputable independent financial advisor for guidance on the best way forward for your circumstances specifically