Every landlord has had the thought at some point: the market feels slow, the tax changes keep coming, and the house would be easier to deal with as a cheque in the bank. It’s a fair instinct. But a slow sales market and a slow lettings market are two different things, and the right move depends on which one your property sits in.
Why a slower sales market makes selling harder
Buyers in Surrey currently have plenty of choice, and they’re using it. They view more homes, take longer to decide, and push back on price more readily than they did a couple of years ago. Interest rates add to the hesitancy. Bank Rate rose by a quarter point to 4% on 5 November, its first rise in over three years. Fixed deals had largely priced that in, but caution hasn’t gone away.
For a seller, the effect is practical. A house that is priced a little ambitiously, or needs work, can sit for weeks. The longer it lingers, the more it looks like it has something wrong with it, and the pressure to cut the asking price grows. That’s a poor position for anyone who sold in a hurry.
Selling also comes with a bill. For a rental property, capital gains tax sits at 18% or 24% depending on your income band, the Budget having left those rates alone. Add agent and legal fees, and the cash that lands in your account can be noticeably lower than the headline price.
The lettings market tells a different story
Demand for rental homes in Surrey remains strong, and supply is still tight. Many would-be buyers are renting for longer while they save, wait for a sale or simply watch the market, which keeps tenants coming. Well-presented family homes in desirable locations draw plenty of interest, often within days of going live.
Virginia Water is a good example. Families relocating for work, professionals commuting into London or towards Heathrow, and international households all look for properties to let in Virginia Water, often before they decide whether to buy. A home that’s clean, well maintained and sensibly priced rarely stays empty for long.
Which is why this idea is worth taking seriously: “A well-managed home among the properties to let in Virginia Water may generate income while its owner waits for the right moment to sell among the Virginia Water houses for sale.”
The risks of letting are real
Letting isn’t free money, and anyone who tells you otherwise is selling something. The main risks are these.
Regulation. The Renters’ Rights Act came into force on 1 May 2026. Fixed-term tenancies are gone, replaced by rolling ones, and Section 21 no-fault evictions have been abolished. Landlords now need a legal ground to regain possession, such as needing to sell or move back in, and those routes involve notice periods and conditions. Rent can only rise through a formal process, and rent review clauses in agreements are no longer enforceable. Documents drafted for the old system can contain clauses that no longer work. If you’re thinking of letting “just until the market improves”, understand that you can no longer plan around a fixed end date.
Compliance. Gas and electrical safety certificates, smoke and carbon monoxide alarms, deposit protection and the right paperwork all matter, and penalties for getting them wrong can be significant. Energy efficiency standards are also tightening, so check the current requirements for your property.
Management and maintenance. A big house means a big garden, an ageing boiler, a roof and a lot of things that can go wrong at 9pm on a Sunday. Either you deal with it or you pay someone to.
Void periods. Even in a strong market, a property can sit empty between tenants. Budget for it.
Look at net yield, not headline rent
This is where many landlords’ sums go astray. A rent of £6,000 a month sounds attractive until you take the costs away. Here’s a deliberately simple, illustrative example for a home worth £2.2 million:
| Annual | |
|---|---|
| Gross rent (£6,000 a month) | £72,000 |
| Management and agency fees (say 12%) | –£8,600 |
| Repairs and maintenance (say 10%) | –£7,200 |
| Insurance, safety checks and compliance | –£2,000 |
| One month void | –£6,000 |
| Left before mortgage and tax | £48,200 |
That’s about 2.2% of the property’s value, down from a gross yield of 3.3%. And it isn’t the end of it:
- Mortgage interest comes off next, and for individual landlords it only earns a basic-rate tax credit rather than a full deduction.
- Tax on the profit is rising. From April 2027, income tax on property income goes up by four percentage points across the Budgets, to 24% basic, 44% higher and 49% additional.
- The High Value Council Tax Surcharge arrives from April 2028 for homes valued at £2 million or more. It’s paid by the owner and starts at £2,500 a year for homes valued between £2m and £2.5m, then rises with inflation.
Please treat the table as a template and not a forecast. Your numbers will differ, and a good accountant will help you tailor the calculation to your own position. The point is to compare the genuine net return with what the proceeds of a sale could earn elsewhere, after capital gains tax and fees. Sometimes letting wins comfortably. Sometimes it doesn’t.
Letting or selling: a balanced view
Letting may suit you if:
- you can comfortably hold the property for the long term;
- the mortgage is modest or you own outright;
- the house is in good condition and you’re happy to keep it that way;
- you’d rather wait than sell into a buyer’s market.
Selling may suit you if:
- you need the capital for something else;
- you want to reduce your exposure to property, or to the growing list of rules and taxes around letting;
- the property needs major work you’d rather not fund;
- the net yield, once honestly calculated, looks thin.
Neither answer is the clever one. The right choice is whichever fits your finances, your appetite for responsibility and your timeline.
A sensible next step
If you’re unsure, ask a local agent who handles both lettings and sales for two figures: what the property might realistically rent for, and what it might realistically sell for today. Set them side by side, with your own costs and tax position in mind, and the decision usually becomes clearer than it felt before.
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