Two can play at the renting game

Let out your home and rent somewhere cheaper to cover the interest rate hikes, school fees or a move to the country
The Mansbridges pay a monthly rent of £750 for a cottage in North Waltham, and let out their Battersea flat for £1,100
The Mansbridges pay a monthly rent of £750 for a cottage in North Waltham, and let out their Battersea flat for £1,100
Until two and a half years ago, Chris and Clare Peskett were the proud owners of a "dream house" in Barnes, west London. It was teeming with original features and complete with a glorious roof terrace plus river views.

But when they had children their priorities changed. Dragging a pram up and down steep steps was bad enough, but when their second child arrived they couldn't fit a double buggy through the front door. And their lovely roof terrace began to look like a toddler death trap.

But rather than sell their home, the Pesketts decided to let it out and with the income they found a "boring" five-bedroom Victorian house around the corner, perfect for the needs of their two- and three-year-old children.

The house they are renting costs about £3,000 a month. They receive a bit more for renting out their own house and after tax on rental income they break even. They have found a solution to their immediate problems without the horrendous expenditure of selling and buying with all the stamp duty and legal bills involved.

Double renting trend


Chris runs the Barnes-based estate agents Apparent Properties, and has realised he is part of a new trend - double renting.

"The beauty of it is that it is instantaneous, and if your new house doesn't suit, you can be out in a month. While there is no money to be made selling, with some people in negative equity, this is the way forward," says Chris.

"We know people who have just let out their home for £4,000 a month and rented a not-so-great house for £2,000 a month. They are self-employed, not earning as much as they were and have children at prep school, and rather than take them out of school they are living more cheaply. They had put their heart and soul into their house, so it is a bit sad to leave it but they just need to get through their immediate problems."

Jane Ingram, head of lettings at Savills London office, is seeing the double renters trend escalating. The people who benefit most are those leaving the capital, or those whose company offices are relocating to less-expensive premises out of London. These people are definitely paying lower rents and letting their London homes for more, and making a nice profit. Others are downsizing to cut their living costs in the short term, while keeping their main investment until the market picks up and they can sell at a profit.

Natalia Mansbridge and her daughter at their rented home in a village near Basingstoke
Natalia Mansbridge and her daughter at their rented home in a village near Basingstoke

An ideal solution


A key element double renters need to consider is the spectre of Capital Gains Tax if they do not move back into their home but decide, ultimately, to sell. They can rent or let years before the tax kicks in. A more personal consideration is the emotional impact of having to let your house out to people you don't know and who will inevitably not care for it in the same way.

This negotiation has to be looked at as a business transaction. There will be wear and tear but it can all be put right - any serious costs for damage are covered by the contract and the deposits involved. The whole deal has to be professionally executed. For couples weighing up the pros and cons of a country commute, renting is an ideal way to find out if it will work for them.

Natalia Mansbridge, 30, and her husband, Stuart, 34, decided to let out their two-bedroom flat in Battersea and try out country living.

Stuart got a job with a charity in Reading and the couple moved to a small village south of Basingstoke in the summer of 2009. They now have a four-month-old daughter, Leila. They are paying £750 per month for a chocolate-box cottage, tiny but beautiful, and are renting out their Thirties flat for £1,100 per month. The apartment is let by Greater London Properties (greaterlondonproperties.co.uk). The couple pay for their property to be managed but even with this cost, they are still making money.

Nicola Stevens with partner Martin at their rented home just outside Woking
Nicola Stevens with partner Martin at their rented home just outside Woking
Nicola Stevens, 33, is another homeowner who turned to double renting when her lifestyle changed. She bought a four-bedroom house in Tooting seven years ago, when she was young, free and single. Having acquired a boyfriend, and a dog, she was desperate for a bigger garden in the countryside. "We had also got sick of London - it was too hectic."

She chose to move to Woking - an easy commute to town for her job as an ethical trade consultant - and the couple have taken a two-year lease on a house.

Nicola used estate agents Kinleigh Folkard & Hayward to let her property, and found the experience trouble-free.

She estimates she is about £100 a week in profit from the arrangement. Dominic Swinfield, managing director of letting agents Belvoir Camden, has noticed a spike in the number of double renters preparing for the dreaded interest rate rise.

He says: "In the last recession, interest rates went up to 14 or 15 per cent. That won't happen again but big rises will finish people off in this market with all bills going up and petrol prices rocketing. A lot of City workers are scared.

"I have a client who is an accountant and he is letting out his home in Camden and moving to a job in Mumbai for a couple of years. He can get £550 a week for his London home, and that will go a long way in Mumbai. He is already paying 5.75 per cent interest on his mortgage and is seriously concerned about it going up."

Vicker Hawker has let her cottage in Barnes and rents a new home in a prime Oxford suburb
Vicker Hawker has let her cottage in Barnes and rents a new home in a prime Oxford suburb

It's all worth it


Double renting is not always profitable. Vicky Hawker, 45, let her two-bedroom cottage in Barnes and moved to Oxford last year to her new job as a tour operator but did not want to lose her foothold on the London property ladder. Six months later she is thoroughly enjoying her new rented home in a lovely part of a prime Oxford suburb. She lets her London home out for £1,650 a month and pays £1,400 in Oxford. Once management fees and taxes on the Barnes home are paid she is "slightly" out of pocket. "But I have not forked out all the expenses of buying and selling, and I am experiencing a new life at little cost," she says.

Journalist James Beresford, 38, couldn't agree more. Last April he moved with his wife and two young children from a two-bedroom house in the densely populated outer suburb of Southall in Middlesex.

They knew that selling would bring no capital gain. They moved to a four-bedroom home in Oxfordshire. The swap cost the family around £150 a month extra but they have a big house and the children walk to the village school through lovely countryside. "We have just got a much better life now," says James.

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