Category: London life

Swapping a rental property for a share portfolio

FIRE v London11 Comments

Having sold my London rental flat, what was I to do next?

I’ve paid the £20k+ transaction fees. I have paid off the mortgage. I set aside the amount to pay my Capital Gains Tax, a liability which needs to be settled within 60 days. I moved some of the remaining equity into other investments and portfolios.

However, one thing is missing. The property rental income. I used to use my property rental income to help pay for household costs; rent was received into my joint household account and was swallowed up there by miscellaneous household bills, cleaning costs, gardening expenses etc. Until I sold the flat, the flat’s service charge and occasional running costs would have come out of that account too. These days, only my Dream Home in London is paid for out of this account – I have opened a different account for the Coastal Folly which I run separately (and is funded separately).

So, I decided to ringfence £500k of the equity that I released for a ‘property proxy’ portfolio. This portfolio will be a worked example of the argument that a stocks/bonds portfolio can be a valid, and better, alternative to a property investment. I will report on progress occasionally on this blog. The portfolio will essentially be an income portfolio, designed for somebody is used to having regular property rental income coming in, and wanting inflation protection.

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April 2025 – balmy weather, barmy markets

FIRE v London4 Comments

Better late than never, I’m doing a quick update on April. More for the record than because anything particularly notable happened in the portfolio, ignoring the mid month gyrations.

It was a lovely month, April. I did a bit of travelling, but the UK had generally lovely spring weather – as the photos illustrate. I find a consequence of having both the Dream Home in London, and the Coastal Folly is that when the weather is lovely I can really begrudge being in London – a relatively new feeling for me I must admit.

How did a non-London city picture get into this blog?

As I write this, it’s almost the end of May, so rambling around April market performance doesn’t feel like it’s going to be of much interest to anybody. In fact with a week of May to go, the S&P has recovered from the Trump TariFFS episode. The key point is that Trump announced a u turn / 90 day pause in his tariff plan, which the markets took as a reason to return to normal. Go figure. Since when has Very Bad News in 90 days’ time been discounted away to practically zero?

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Buy to let: RIP

FIRE v London17 Comments

Last year was the end of an era. I sold the Modern Flat, after owning it for over 20 years.

A bit of history

I ended up with my Modern Flat in that common way that many ‘accidental’ landlords have. It was my first rung on the property ownership ladder. Until it was time to get onto the second rung. I thought I’d live there for several years – though in practice I lived there less time than I had originally expected.

The flat itself is a new build flat in central London, to a reasonable spec. It is slightly bigger than average, but has no outdoor space whatsoever. I loved living there, albeit that was a long time ago. It had a great reception space but rather cramped bedrooms with insufficient storage. This suited me fine – bedrooms are for sleeping in, and living rooms are where you live. The building had a residents’ association, a management company, and a porter. I bought the flat on a long 200+ year lease, and had to sign up to both a ground rent (doubling every 25 years) and a service charge (set by the management company).

I managed to climb onto the second rung without selling the Modern Flat. Instead, I kept it, ever since, I rented it out. This isn’t, strictly, a ‘buy to let’ property in that I didn’t buy it to let it.

I haven’t strictly treated my Modern Flat as an investment. As an illiquid asset, I don’t track it as part of my invested portfolio. Nonetheless, my decision to sell it was mostly financially driven.

Buy to let financials – the theory

The case for being a landlord, as I see it, has three key financial arguments in its favour:

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