Accidental landlord and short term tenancy

[DrFfybes]

This seems a good plan. Especially as I notice single room rents around Reading have shot up to within an ace of the price of a whole studio flat nowadays. Similar might be the case in the OP's area, in which case rent from two tenants in a room each might well add up to what the whole house would fetch as a single rental. Or something along those lines.

After earning so much under the "rent a room" scheme, what do you do about tax on the rest of the income?

Current allowance is £7500 pa - it was less when I did it, but then there were voids, so never exceeded the allowance.

Paul

[modellingman]

When would CGT kick in after it ceases to be ones primary residence?

https://www.gov.uk/tax-sell-home/let-out-part-of-home

( i see there's another stealth tax slipped in there, the reduction from 18 to 9 months ).

It is something the OP should consider.

Generally, private residence relief is not available for those periods when a property is not the main residence so a liability to CGT kicks in immediately. One exception to this is the final period of ownership where relief is available irrespective of residency. For sales after 6 April 2020 this period is the final 9 months. Previously it was the final 18 months and even more previously, the final 36 months.

The CGT allowance was reduced from £12,000 to £6,000 on 6 April and will reduce further to £3,000 next April. Given the OP's stated timescales, this is perhaps something they may also want to factor into their analysis.

modellingman

[Degsy67]

Many thanks to everyone for their insights and opinions. Spreadsheet model of options now completed plus a whole bunch of other risks and considerations from the experiences shared here. No decisions yet but many options. There’s much more to the decision that the numbers but at least I now have some numbers.

A big consideration is the future of UK base rates and inflation over the next 12 months. These are unknowable. Renting out provides some flexibility and keeps some options options open for longer. Sale and purchase provides a little bit more certainty in the short term at the expense of flexibility.

Degsy

[DrFfybes]

A big consideration is the future of UK base rates and inflation over the next 12 months. These are unknowable. Renting out provides some flexibility and keeps some options options open for longer. Sale and purchase provides a little bit more certainty in the short term at the expense of flexibility.
Degsy

I don't think there's much "Short term" about selling a house at the moment.

SiL has 2 rentals near a hospital in Wales that she wants out of - not a sniff of interest at a price similar to 12 months ago, another friend in Exeter selling her mum's bungalow, nothing at asking 10% under what one of the neighbours completed for in Jan, and our next door has had one viewing despite asking 8% down on last year's offer that fell through.

Paul

[Lootman]

friend in Exeter selling her mum's bungalow, nothing at asking 10% under what one of the neighbours completed for in Jan, and our next door has had one viewing despite asking 8% down on last year's offer that fell through.

There is a ton of demand for rentals in Exeter because it is so popular with students, many of whom are foreign and affluent. My eldest son is a landlord there and he can rent out places many times over. Most of the construction in Exeter right now is for student housing.

I dd not realise it was so hard to sell there at the moment. Although he did recently buy another place in Bristol and that was quick and easy.