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When is the right time to sell your buy to let?

by Julian Watson

No so long ago, buy-to-let was viewed as a pretty sure bet by those with money to invest; with the potential to make big long term profits, and a good interim income, they presented an attractive way to invest your money.  But with current economic volatility, and the fluctuation in housing prices, it’s no surprise that some landlords are now rethinking their portfolios.

Digging into our own data (here at Simply Business) we can see that when we compare the average market value of those properties insured with us in 2008 vs 2010 there is a drop of 6%. This is particularly significant when you consider that prior to 2008 we’d seen prices appreciate year on year.

Thinking of selling your buy to let?

I guess the question on many landlord’s lips is – are we going to turn the corner and see property prices begin to recover? Or,  is now the time to sell that buy to let? If you too are in this position it’s important not to act hastily – there are many things to consider when making the decision about whether or not to sell your buy-to-let property.

First and foremost you need to remind yourself of what your original investment aims were when you bought your buy-to-let.  For the majority of landlords this kind of property is a long term, high-yield investment, as opposed to an investment for short-term capital appreciation.   And if you fall into this category then it’s important to keep the long term in sight.

During the spring of 2010 thousands of owners off-loaded their buy-to-lets because of fears that the new government was going to raise Capital Gains Tax to 40 or 50%.  In the end the increase (and only for those who fell into the high-tax bracket) was to 28%.  This just goes to show that having a knee-jerk reaction in the world of property investment can be costly.

Similarly, to panic sell a property because there is a dip in market prices can end up being a mistake.  Many landlords feel that if they fall into negative equity they should get rid of their buy-to-let.  But this is really the worst time to sell.  Prices rise and fall but over the longer term they tend to follow a significant upward trend.  And the truth is that negative equity is only a problem if you sell, or find yourself in a position where you are forced to sell.

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A long period of vacancy may also tempt landlords to sell their property. If this is the case for you, but you’re currently in negative equity it is important to note that there are other options open to you.  It’s always worth doing a bit of research into other rental properties in your area.  It can take only a small amount of money, and a little effort, to bring your property up to a standard where it will be easier to let.

But if you’ve reached a point where you’re ready to sell simply follow the usual property rules.  It’s well known that between March and July is the best time of year to put your property on the market.  And keep your eye on house prices and changes in tax and interest rates.  The last thing you want is to be selling in a buyers’ market.  But just as house prices fall, they also spike.  If you see a number of houses under offer in your area it could be a prime time to catch the buyers who’ve missed out.  However, if your neighbours have saturated the market with for sale signs that don’t seem to be going anywhere then it’s probably a good idea to hold off.

Overall, the most important thing to remember when you want to make a profit out of selling your buy-to-let is to not panic because of short term problems. Take the time to think through all of the issues at hand.  And always remind yourself – making a high profit on the property market is a long term investment.

Julian Watson is a guest contributor to The Big Property List blog. He’s spent more than ten years in the property industry and is the Landlord Insurance product manager for

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7 responses to “When is the right time to sell your buy to let?”

  1. Tina says:

    Serious Landlords look to make their profit from the revenue, not the capital gain on residential investments and so take a much longer term view of the investment. I will never sell any houses in my portfolio whilst they bring in profitable returns.

  2. Martin says:

    Q. “When is the right time to sell your buy to let?”
    A. Never!

  3. @Tina – Thanks for your comment – I’d agree with you; of course if you’re yielding a profit then holding on to your portfolio makes total sense, particularly as negative equity is only realised if you sell.

    @Martin – Like Tina it sounds like you’re in it for the long haul! Again, thanks for your comment.

  4. FourEd says:

    This is really useful information. Anyone who is in this situation should read this article before committing to anything. – thanks for sharing.

  5. PAD4U says:

    It’s worth keeping in mind that property should always be considered a long term investments and that capital increase is only one consideration, yield should also be carefully considered. Keep in mind that with inflation, cash can lose money.

  6. Reece says:

    I think interest rates will start to go up by the end of the year – maybe by a quarter of a percent and the remain static for several months thereafter whilst the effect of the rise is analysed.

  7. Marc says:

    BTL is a long term investment. As long as you make a profit and are confident you can service the debt then everything should be fine.

    Actually right now the rental market is booming and rent are going up. Therefore landlords should not need to sell their property quickly.

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