Mov­ing on and mov­ing up by let­ting your home and rent­ing a big­ger house

Let­ting to let is help­ing des­per­ate sell­ers to get mov­ing. Sharon Dale re­ports on a new an­swer to an old prob­lem.

Yorkshire Post - Property - - PROPERTY -

WHEN Karen Ap­ple­ton bought her two-bed ter­raced house in Bin­g­ley six years ago, she was thrilled to be on the prop­erty lad­der.

But now she’s a mother with a 16 month-old child, she has be­gun to re­sent what she calls her for­mer “bach­e­lorette pad”.

“It’s too small and there’s baby stuff ev­ery­where,” says Karen, a risk man­age­ment con­sul­tant, who has been try­ing to sell the £110,000 house for a year.

“I used to love the place but now it’s get­ting me down. What I re­ally want is a big­ger house with a spare room and a gar­den for my daugh­ter, but there doesn’t seem to be much chance of me sell­ing the house to a first-time buyer at the moment.”

Rather than lose money by sell­ing her home at a cut price, she has de­cided to let it out and rent a big­ger place her­self.

This let­ting to let so­lu­tion is one be­ing used by a grow­ing num­ber of des­per­ate sell­ers stuck in homes that no longer suit their needs.

“It seemed like the best idea. I’d like to sell my house and buy a big­ger one but not at a loss,” says Karen.

Af­ter con­sult­ing Dacre, Son and Hart­ley’s let­tings depart­ment she is do­ing some mi­nor re­pairs be­fore ad­ver­tis­ing her home for rent.

The costs of let­ting a prop­erty for the first time also in­clude an elec­tri­cal safety check cost­ing be­tween £100 and £150, an an­nual gas safety check, which should cost be­tween £70 and £100.

Prop­er­ties to let also need an en­ergy per­for­mance cer­tifi­cate cost­ing about £75, but if you have al­ready had your prop­erty for sale you will al­ready have one.

Voids, the pe­ri­ods be­tween one ten­ant leav­ing and a new one mov­ing in, and main­te­nance should also be fac­tored in when cal­cu­lat­ing fi­nances.

The cost of find­ing a ten­ant is rel­a­tively small if you do it your­self via an advertisement in the lo­cal news­pa­per, but if you don’t want the has­sle of phone calls from would-be ten­ants fol­lowed by ref­er­ence check­ing, not to men­tion the on­go­ing man­age­ment of the prop­erty then hir­ing a pro­fes­sional let­ting agent is an op­tion.

Their man­age­ment fees are typ­i­cally 10 per cent of the rental in­come.

You should also in­form your mort­gage provider and check your build­ings in­surance be­fore let­ting. You will also be li­able to pay tax on any rental in­come though you can off­set mort­gage in­ter­est and other costs.

All this prepa­ra­tion hasn’t put Karen off. She says: “With the safety checks and re­pairs, it will be £500 to get the house ready. I’ve been told I should have no prob­lem find­ing a ten­ant, then the rent should just about cover my mort­gage.

“I’ll be pay­ing up to £200 more in rent for a big­ger house than I

I should have no prob­lem find­ing a ten­ant, then the rent should just about cover my mort­gage.

do in mort­gage pay­ments so I will have less dis­pos­able in­come, but it’s worth it to me.

“I’m hop­ing to let my own house long-term, and maybe even keep it as a pen­sion pot. Mean­while, I will try to save for a de­posit to buy a big­ger house of my own.”

It’s a strat­egy be­ing em­ployed by oth­ers who have been un­able to sell their homes.

Kathryn Bur­ton, of Lin­ley and Simp­son let­tings agency in York, says: “It’s some­thing we are see­ing more of. We have a cou­ple at the moment who bought a house and re­alised it was the wrong lo­ca­tion for them. Rather than sell, they are let­ting it out and rent­ing in Har­ro­gate.”

Julie Craven, head of res­i­den­tial let­tings at Dacre, Son and Hart­ley, has also seen the let­ting to let mar­ket sub­stan­tially in­crease dur­ing the last year, and she is a prime ex­am­ple of how it can work.

“Be­com­ing a land­lord and ten­ant at the same time is def­i­nitely on the in­crease.

“Those who can’t sell for the price they want, but who re­ally need to move, are find­ing that it is a good so­lu­tion,” she says.

“I am deal­ing with a cou­ple who are di­vorc­ing and they are plan­ning to let their large home, go their sep­a­rate ways and rent smaller houses un­til the sales mar­ket re­cov­ers.”

Julie and her part­ner both have cot­tages, which they have let out so they can rent some­where big­ger to­gether.

“Rent­ing can be a good way of get­ting a big­ger and bet­ter home for less.

“We are rent­ing a fourbed­room home, worth £300,000, in Bin­g­ley, and the rent is £700 a month. If we had a mort­gage on a place like this it would be much higher. I think we’re get­ting twice the house for half the money.

“Peo­ple think rent­ing is dead money, but we don’t see it like that.”

Rents vary depend­ing on area. Two-bed­room homes range from £400 to £550 a month. A fam­ily-sized house ranges from £650 in Keigh­ley to £1,000-plus in Har­ro­gate.

Fig­ures show that the rental mar­ket is boom­ing. Ten­ant de­mand is high, rents are slowly ris­ing and the trend looks set to con­tinue.

“I think more peo­ple who can’t sell will de­cide to let and rent some­where else,” says Julie Craven.

“I don’t see any prob­lems with do­ing that for a cou­ple of years. As far as I can see, ev­ery­one’s a win­ner.”

Church Farm, Barlby, a four-bed­room farm­house, is to rent for £1,250pcm; con­tact Lin­ley and Simp­son, 01904 611722. This twobed­room apart­ment with park­ing at Crown­wood Lodge, Ot­ley Road, Bail­don, is £525pcm; con­tact: Dacre, Son and Hart­ley, 01274 515766


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