In 2012, don’t sell unless you really must
Neither Halifax nor Nationwide is expecting much to change with house prices this year, although Rightmove predicts a two per cent rise and top-end agent Knight Frank predicts a five per cent fall.
For most homeowners, however, the rule is: If you don’t have to sell, then don’t.
There is a hugely attractive alternative – rent out your house.
For most homeowners, the rule is: If you dont have to sell, then dont
Anyone retiring and thinking of downsizing should consider this option. According to Knight Frank, rental returns averaged 6.1 per cent in 2011 – far better than any cash return a bank is offering.
Even a temporary period as a landlord might be a way of subsidising a pension.
In some areas the returns could be higher still. In Southampton’s SO17 postcode, which includes the university and where the average asking price over the past three months has been 186,942, the return is as high as 8.1 per cent.
In the LS9 area of Leeds, where the average asking price is 143,856, rents are up to 7.52 per cent, while at Virginia Water’s GU25 (average asking price 692,146) – yield is 7.5 per cent.
Renting out your home can be a great way of tiding you over until house prices improve
Patches of London may exceed these, but they are unlikely to be downsizers from family homes.
‘While market conditions remain so inclined, it could be prudent to let out the family home and use the monthly rental income to invest in renting a smaller retirement home,’ says Tim Hyatt, of the Association of Residential Letting Agents. It is hard to disagree, so it is perhaps a little churlish to add that renting out your house without using the services of a letting agent will ensure the return is higher still.
This could also save you a lot of grief. A bad letting agent – one in Worcester cost landlords 64,000 and was convicted of fraud last month – can cost homeowners dear, so it is important to choose one with care.