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Keep UK rental property or reinvest in NZ rental?

Sell or don't sell?


  • Total voters
    2
B

Badgersack

New Member
Hi All,

We have a 1 bdrm flat in SW London being rented and currently becoming vacant. We are looking to invest in a rental property in NZ, to later live in (4-5 yrs time).

We could afford (barely) to invest in NZ without selling the London rental, but considering selling and investing that money in NZ.

Reasons for selling:
  • Forecasts for property value increases are higher in NZ
  • Tax increases on landlords in UK reducing yield
  • CGT looking likely to increase
  • Lack of faith in goverment to protect assets.
Reasons against:
  • Incurring early repayment charge from lender
  • So far property has been contunally occupied with minimal issues
  • Bad time to sell due to Covid and possible lower sale price
  • Hedging our bets and staying in both markets wiser?
Looking for initial thoughts from others, as my wife and I consistently make bad decisions when we put our minds to it!

Thanks :)
 
L

Longterminvestor

Administrator
I know that the system in Australia is very tight regarding immigration, what is the situation in New Zealand?

If you're looking to sell UK property then I guess you have an opinion on the current exchange rate? Do you think sterling may be depressed as a consequence of Brexit and Covid-19 or do you think there is further downside? Why not maintain your UK investment property and when you are ready to move to New Zealand simply sell up then ?
 
B

Badgersack

New Member
Thanks for the reply. My wife and I both have visas, so that aspect is not an issue for us.

With regards to the exchange rate, I would guess the pound will weaken against the NZD, based on how well they're handling the pandemic. But who knows?!

I would normally agree and keep the property rented as long as possible. Time in the market etc. It's the uncertainty that is making me doubt that choice.
 
F

FWL

Active Member
While the figures speak for themselves, the UK government has ploughed hundreds of billions of pounds into the economy so I think we need to separate their approach to the coronavirus and their approach to the economy. You could also argue that the pound is taking into account a worst-case scenario for Brexit and perhaps ignoring the potential for the future?

Many people forget that the UK is central to the British Commonwealth which has exposure to approaching 2.5 billion people. Compared to 450 million in the EU. Granted, not all of the countries in the British Commonwealth could be classed as "wealthy" but there is huge potential.
 
B

Badgersack

New Member
I love the optimism FWL! I'm beginning to think it might be worth sitting on it for a while longer.
Also doubting the NZ investment. Looks like we’re subject to HMRC rules, not NZ’s system. You can still deduct mortgage interest paymentsover there…
 
R

realdeals

Active Member
Despite the doom and gloom often surrounding the UK economy, historically the property market has bounced quicker than the economy. I am not suggesting this is a given but if you look back here is a strong backbone of demand for UK property. Might you end up selling your UK property during a market dip, miss out on a potential currency improvement and end up buying a New Zealand property when people are at their most optimistic?
 
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