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Introducing the LemonFools Personal Finance Calculators

Is now the right time to buy?

Covering Market, Trends, and Practical (but see LEMON-AID for Building & DIY)
bluedonkey
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Re: Is now the right time to buy?

#174406

Postby bluedonkey » October 17th, 2018, 12:30 pm

hiriskpaul wrote:Yes I realise that the rent a room scheme can be extended to multiple rooms, but I thought I read somewhere (quite some time ago) that if you did that you would be considered to be running a lodging house and so lose a chunk of PRR. Might still be worthwhile though even if some PRR was lost, but starting to get complicated!

Rental income for 1 double room in a shared house, convenient for the university is about £450-£500 PCM, with bills included.

Renting out more than one room doesn't affect the CGT exemption. The adverse case might be where a BnB was being operated as this is a business - unlike renting out spare rooms - and would have an effect. It is essential your daughter continues to live in the property while the rooms are being rented out.

hiriskpaul
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Re: Is now the right time to buy?

#174427

Postby hiriskpaul » October 17th, 2018, 1:14 pm

Thanks, but this contradicts something I have googled up:

https://www.taxinsider.co.uk/414-Watch_ ... dgers.html

So, an owner can have five lodgers over five years, as long as only one lodger lives in the home at any particular time, and still claim reliefs to cut the amount of CGT they pay on selling their former home.

bluedonkey
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Re: Is now the right time to buy?

#174463

Postby bluedonkey » October 17th, 2018, 3:21 pm

This might help:

https://www.gov.uk/hmrc-internal-manual ... al/cg64702

It comes down to distinguishing between "lodgers" and essentially a BnB.

hiriskpaul
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Re: Is now the right time to buy?

#174498

Postby hiriskpaul » October 17th, 2018, 6:33 pm

bluedonkey wrote:This might help:

https://www.gov.uk/hmrc-internal-manual ... al/cg64702

It comes down to distinguishing between "lodgers" and essentially a BnB.

Thanks, looks very useful.

Mike4
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Re: Is now the right time to buy?

#189319

Postby Mike4 » December 26th, 2018, 12:44 am

"Is now the right time to buy?"

Well no actually. The right time to buy was in 1994. But given this is a bit tricky the second best time to buy is when you need a house emotionally and for stability. In 25 years even if your daughter times her entry into the market appallingly badly she will probably still be in the money. And don't overlook all the rent paid out between now and buying day should she elect to wait.

Is our old mate Bialy still waiting for the crash?

SomeMight
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Re: Is now the right time to buy?

#191631

Postby SomeMight » January 7th, 2019, 9:57 am

Unless people are posting their keys through the letterboxes of the banks and building societies, I think the little downward surges are simply that, just the market taking a breather before another gasp forwards.

The market rode out 2007 and the "financial crash". The things like Shared Ownership and Help To Buy were supposed to be the signal that the market had gone over the top and all we could now look forward to is years and years of retreating prices, with little Jonny's negative equity fast starting to equal his student loan outstanding debt.

It never quite happens like it says it is supposed to though, does it?

If you are buying a house that can be a family home at some point in the future, then I would have probably bought, in hindsight.

SM

hiriskpaul
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Re: Is now the right time to buy?

#193267

Postby hiriskpaul » January 13th, 2019, 5:38 pm

Despite my caution my daughter is going ahead with a purchase. She is going for a flat in a large Victorian house, converted about 13 years ago. Over 900 year lease, no ground rent, but a major snag has cropped up - the freeholder cannot be contacted. Who cares was my first reaction, but then it was pointed out that the freeholder has the responsibility to enforce the covenants in the lease. So no freeholder, no easy way to ensure other leaseholders don't break the lease. Still waiting to hear from the vendors solicitor on whether the freeholder can be tracked down, but I am very tempted to advise my daughter to walk away at this point. Be interested to hear the thoughts of others on this type of situation. How can it be resolved? How much will it cost? Am I right in assuming it would be impossible to obtain a mortgage for a flat with an absent landlord?

The estate agent claimed the freehold was shared. I don't suppose there is any way to hold the estate agent to account for the costs so far incurred by this falsehood?

One other potentially major problem is that there do not appear to be building control certificates for the conversion. Planning permission and building control approval, but no final certificates. How much could it cost to sort out that little problem if the certificates cannot be found or were never issued in the first place?

Rather than walking away, I guess another possibility is to price the cost and risk of sorting all this out and making a much lower offer. I might be tempted, but not sure it is a sensible risk/hassle for my daughter.

EssDeeAitch
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Re: Is now the right time to buy?

#193270

Postby EssDeeAitch » January 13th, 2019, 5:51 pm

Your instinct to walk away is probably correct. Give the vendor a time deadline to come up with everything you need to make sure you can on-sell when you want to. Even a discounted price will keep you awake when thinking "what if".

LittleDorrit
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Re: Is now the right time to buy?

#193355

Postby LittleDorrit » January 14th, 2019, 8:52 am

I would undoubtedly resolve the Building Regulations issue before proceeding further. Approval could be construed to mean that the drawings were approved by the Local Authority for construction, but in fact no final completion checks were carried out. Retrospectively meeting the acoustic separation requirements between flats for example is no trivial matter. It is quite common these days to insist on the vendor providing indemnity insurance in these cases. But:-
https://www.trethowans.com/news/lack-of ... -the-cure/

DWPI
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Re: Is now the right time to buy?

#193862

Postby DWPI » January 15th, 2019, 10:34 pm

hiriskpaul wrote:Despite my caution my daughter is going ahead with a purchase. She is going for a flat in a large Victorian house, converted about 13 years ago. Over 900 year lease, no ground rent, but a major snag has cropped up - the freeholder cannot be contacted. Who cares was my first reaction, but then it was pointed out that the freeholder has the responsibility to enforce the covenants in the lease. So no freeholder, no easy way to ensure other leaseholders don't break the lease. Still waiting to hear from the vendors solicitor on whether the freeholder can be tracked down, but I am very tempted to advise my daughter to walk away at this point. Be interested to hear the thoughts of others on this type of situation. How can it be resolved? How much will it cost? Am I right in assuming it would be impossible to obtain a mortgage for a flat with an absent landlord?

The estate agent claimed the freehold was shared. I don't suppose there is any way to hold the estate agent to account for the costs so far incurred by this falsehood?

One other potentially major problem is that there do not appear to be building control certificates for the conversion. Planning permission and building control approval, but no final certificates. How much could it cost to sort out that little problem if the certificates cannot be found or were never issued in the first place?

Rather than walking away, I guess another possibility is to price the cost and risk of sorting all this out and making a much lower offer. I might be tempted, but not sure it is a sensible risk/hassle for my daughter.


My friend recently bought a 2 bed flat in Central Manchester/Salford area for £250k. Currently being built, completing in October this year. She's recommending me to buy one too. Can send u details if interested.

hiriskpaul
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Re: Is now the right time to buy?

#193868

Postby hiriskpaul » January 15th, 2019, 11:16 pm

DWPI wrote:
hiriskpaul wrote:Despite my caution my daughter is going ahead with a purchase. She is going for a flat in a large Victorian house, converted about 13 years ago. Over 900 year lease, no ground rent, but a major snag has cropped up - the freeholder cannot be contacted. Who cares was my first reaction, but then it was pointed out that the freeholder has the responsibility to enforce the covenants in the lease. So no freeholder, no easy way to ensure other leaseholders don't break the lease. Still waiting to hear from the vendors solicitor on whether the freeholder can be tracked down, but I am very tempted to advise my daughter to walk away at this point. Be interested to hear the thoughts of others on this type of situation. How can it be resolved? How much will it cost? Am I right in assuming it would be impossible to obtain a mortgage for a flat with an absent landlord?

The estate agent claimed the freehold was shared. I don't suppose there is any way to hold the estate agent to account for the costs so far incurred by this falsehood?

One other potentially major problem is that there do not appear to be building control certificates for the conversion. Planning permission and building control approval, but no final certificates. How much could it cost to sort out that little problem if the certificates cannot be found or were never issued in the first place?

Rather than walking away, I guess another possibility is to price the cost and risk of sorting all this out and making a much lower offer. I might be tempted, but not sure it is a sensible risk/hassle for my daughter.


My friend recently bought a 2 bed flat in Central Manchester/Salford area for £250k. Currently being built, completing in October this year. She's recommending me to buy one too. Can send u details if interested.

Thanks, but Salford is the wrong way. She needs to be near the university.

JamesAdams
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Joined: February 4th, 2019, 8:54 am

Re: Is now the right time to buy?

#198702

Postby JamesAdams » February 4th, 2019, 8:57 am

I think it`s always the right time to buy :) A house is a real estate investment, so it can appreciate with time and give you your money worth. Renting, in my opinion, just spending the money without any returns


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