Should I cash in my buy-to-let?Are landlords better off selling now for a profit to avoid market uncertainty and a growing tax burden?

The accidental landlord ignores scary estate agents, does her sums and decides to stay put in a difficult buy-to-let market.

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An estate agent who sold me a rental property 18 months ago cold calls me with the aim of persuading me to re-sell it. He tells me the market is going to crash “because of Brexit and everything” so I should get rid of it before it’s too late. 

He tries to convince me that the two-bedroom flat has rocketed in value since I bought it, meaning I could sell it now at a fat profit. However, if I wait, he estimates I could be in negative equity within months.

Now, if my flat has gone up by nearly half the amount the agent is suggesting, I would be quite keen to sell. I think he is right that prices are likely to take a tumble, but I also think he is exaggerating how much profit I would make if I were to sell the place now. I simply can’t see how the flat I paid £300,000 for in 2015 is now worth the £370,000 price tag he has put on it.

I’ve been keeping an eye on property prices in the area and I don’t think they’ve gone up enough to cover the stamp duty, legal fees and other costs I incurred when buying the flat.

Anyway, I tell the agent that I’m not able to sell the property just now because it’s rented and the tenants’ lease doesn’t expire until October.

“Evict them,” says the agent. “You only need to give them two months’ notice to get them out.”

That’s a little harsh, I tell him. The two guys living in the flat are lovely and they have already lost one home when a landlord sold up, so I don’t want to put them through that again so soon.

I tell the agent that if the tenants decide not to renew their contract in the autumn, I might put the property on the market then, assuming house prices haven’t crashed in the meantime. “Big mistake,” he scoffs, “you’ll get much less for it if you wait.”

I tell him I’ll take my chances, but he’s not ready to give up yet. He spies another opportunity to bounce me into selling the flat.

A TERRIBLE TIME TO BE A LANDLORD?

“You’re probably not aware of this, but you can’t claim tax relief on your mortgage any more,” he tells me, “so you’re probably not making a profit on the rent now. In fact, lots of landlords like you are selling because they are making a loss.”

I thank him for his concern, but inform him that I am already aware the Government has withdrawn buy-to-let mortgage interest tax relief and replaced it with a less-generous tax credit.

Nevertheless, I tell him, I will continue to make a profit. A smaller profit, yes, but a profit nonetheless. He ends the conversation telling me that “now is a terrible time to be a landlord”.

After he rings off, I call his agency from my landline, just in case they have my details logged under my mobile phone number. One of his colleagues answers the phone and I pretend to be interested in buying a rental property in the area, but I’m an inexperienced investor, I say. Is it a good idea to buy to let right now?

“It’s a fantastic idea,” she tells me. I say I’ve heard on good authority that prices are likely to fall so perhaps I should wait until they come down?

“Oh, I don’t think they will come down, not here,” she replies.

Of course, she would say that wouldn’t she? But the point of this story, it seems to me, is that it’s best to trust your own instinct. If you are making a profit stick with it; if you can cover your costs over the long term, hang in there. Over a decade, property never goes down, so don’t always believe what estate agents say. 

Victoria Whitlock lets four properties in south London. To contact Victoria with your ideas and views, tweet @vicwhitlock


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