My partner and I are considering letting out the family home on a long-term basis to move closer to our children's secondary school. It's only a few miles from where we live, but the bus journey takes them almost an hour in each direction, which is especially grim in the winter.
Ideally, we'd like to sell our house and buy closer to the school, but we can't afford to do that because the stamp duty alone would cost us between £27,000 and £32,000. On top of that, we'd have estate agent's and solicitor's fees, so altogether the move would cost us well over £40,000. It would be cheaper to stay put and pay for the kids to be chauffeured there and back every day.
A more sensible option, we believe, is to let our house and rent a similar property closer to the school. When I take a look at the rental ads in my neighbourhood, even I am surprised to find rents have risen about 25 per cent since we let the house three years ago when we moved temporarily to France. Undoubtedly, our little bit of south London has become more desirable — posh even.
I didn't realise how posh until last week's Jubilee celebrations, when one of the neighbouring roads hired security for a street party.
Doing the maths, prices are on a par with the area we want to move to, but after we've deducted all the costs involved in letting our house, we'll only be left with enough to rent a much smaller house.
If we use a letting agent to market our property, we'll have to pay about 10 per cent of the rent in commission — and we'll have to pay a full year's commission up front, meaning we won't earn any rent for several weeks but we'll still have to pay the mortgage on our house plus rent on the new property.
We'll also have to pay tax on any profit we make letting our house (after deducting letting agency fees and mortgage interest charges).
If we find a property through a letting agent, we'll have agency fees to pay, plus we'll have to pay a six-week deposit, which is likely to be about £4,500. We could transfer the deposit taken for our house, but that would be risky because if our tenants moved out before we found new renters, we might not have the cash to refund them.
There's another hitch, too. Our mortgage lender, Nationwide, will only agree to us letting out the property for up to three years, and it will increase our interest rate by one per cent while it's let. This isn't as harsh as some lenders — many won't consent to letting at all — but still, it's an extra cost we could do without.
And we should probably make our house suitable for renting if we want to ask top dollar. We kid ourselves that it's shabby chic, but deep down we know that others fail to see the charm in the frayed carpets and peeling wallpaper.
I might have laughed when the loo door handle came off in my hands, locking me in there until the neighbours heard me yelling, but I'm not sure tenants would see the funny side.
And another thing... we need to consider how much wear and tear our house will suffer while it's let, and how much it will cost to put it right if we do decide to sell it in a few years' time. On our return from France, it cost hundreds of pounds to get our house shipshape again.
I was explaining all this to a friend, with a weary voice, while coming to the conclusion that we would — in the light of all the expense and stress — probably stay put, when she asked me why I didn't just send my kids to the local school. Duh! Why didn't I think of that?
* Victoria Whitlock lets three properties in south London