If you’re a UK citizen living overseas and renting out a UK property, chances are you’ve asked yourself this: “Should I sell it or rent it out again?” It’s a very sensible question and one that has no single right answer (go figure). Not only that, but your decision depends on more than just your tenants giving notice or a letting agent nudging you for a decision.
I’m often asked for help with UK rental strategy and tax, and the answer often means zooming out and thinking much bigger than just the next tenancy agreement. This is how I would approach building a UK property strategy as an expat.
Think long term, not just short term
Before you get too bogged down in the numbers, take a step back and think about the bigger picture. Especially if you might one day move back to the UK.
The UK property market, for all its ups and downs, has a long track record of growing steadily over the years. Over the past 70+ years, it has also shown one consistent trend: prices always rise. If you sell now, will you be able to afford to buy back in later if you return? Or are you better off holding on to the property as a sort of “home base”, both financially and practically?
This is the sort of long-term thinking that underpins a strong UK property strategy for expats.
Ask yourself:
- Do I plan to return to the UK one day?
- Will I want (or need) a home here in future?
- Am I likely to inherit a property, or is that uncertain?
If you’re even half considering returning, keeping a property in the UK might make more sense than you think.
Sell, relet, or remortgage?
There are three main paths to choose from, and each has pros and cons depending on your circumstances.
Option 1: sell the property
Selling gives you a nice lump sum and a clean break. But remember, you’ll likely pay Capital Gains Tax on the increase in value since you bought it. Once you’re out of the market, it could also be tricky to buy back in.
You might choose to invest the proceeds elsewhere (like a managed investment fund), but if your property has done well, it may be hard to beat the returns from a combination of rental income and long-term growth. Meaning, it may not perform as strongly over time.
| Have you decided to sell?We can handle the tax returns and calculations for you! Get in touch with us, and we’ll take care of the rest. |
Option 2: relet the property
If you choose to keep the property and relet, you stay in the UK property market and keep your options open.
Things to consider:
- When was the last rent review? Could it be increased?
- Are you getting the best value from your letting agent? Fees and service levels vary wildly.
- Would a guaranteed rent scheme work for you? Some agents offer a fixed monthly income and manage the hassle on your behalf.
Letting the property is often the most flexible route and part of a sensible UK property strategy for expats who want to stay on the ladder. As well as future flexibility, rental profits plus long-term capital growth often outperform other investments.
Option 3: remortgage the property
Here’s a powerful option that many overlook. If the property has increased in value, you may be able to remortgage and release some equity tax-free!
That cash could then be used to:
- Buy another property
- Reinvest elsewhere
- Build a safety buffer
- Reduce other debts
Remortgaging means you get the best of both worlds: you stay in the market and still free up some cash. If you’re looking to build your wealth, this is a great option.
The three key questions to ask yourself
Not sure what to do? Start by asking these three:
- How much has your property grown in value? This “hidden” profit becomes real when you sell or remortgage. If the growth has been strong, the investment is likely doing well, so this profit might be better used elsewhere.
- Do you want or need to keep a UK home base? Practical reasons or just peace of mind, either are valid.
- Could remortgaging unlock opportunities? Sometimes that’s the missing piece in your bigger financial plan. Releasing equity can open new doors.
Get these three answers clear in your mind, and your decision about keeping or selling the property usually becomes obvious.
Build a strong property strategy
Whether you decide to sell, relet, or remortgage, it should all be part of a broader plan, not just a snap decision. Your UK property strategy as an expat should align with your long-term financial goals, lifestyle plans, and tax position – so if you’re feeling unsure, that’s completely normal, and that’s where we can help.
At JVCA, we work with expats all the time and love nothing more than talking tax and helping our clients plan long term. If you want to chat through your options and make a plan, drop us a message at [email protected].
