Are councils profiteering from landlords struggling to sell empty properties?

Reply to the comment left by GlanACC at 12/12/2024 - 19:34
The £9k would have completely different meaning depending on property value. My highest sale was a tenanted HMO in a desirable city for £375k, lowest a two up two down in a down to earth town needing work and not catching the post covid boom was £54k.

I think the poster said the £22k owed to the council was 5% of value so losing say10% would be quite a chunk over going directly to auction with a reserve set to sell it.

Reply to the comment left by Keith Wellburn at 12/12/2024 - 22:28
Keith, I agree that many of these buy anything companies have a bad reputation. Yes, the one I sold too was true to its word, no inspection was needed just a photo of the inside of the property, no searches etc.

If you try to sell a property in my are you could be waiting 3 months for the searches to come back !

I did sell at a big discount but I costed out the repair and improvement cost, plus council tax etc and it just wasn't worth it.

The rewire would have meant kitchen out and the rest of the property was the old lath and plaster type walls which were crumbling. A rewire would have meant taking the walls back to brick.

I was more than happy to sell at the discounted price. Yes, the company that bought it off me sold it on at auction but that was many months later and they would have had to wait for the searches etc.

As I sold at a discount I also had less CGT to pay

I agree with GlanACC above. I contacted a company recently with regards the possibility of selling one of my rental properties. They were incredibly helpful, no hard sell at all and open about the commission they charge! Some companies will take on the refurbishment costs themselves if the value is there, then market the property and thus you get the increase in the value of that property after works completed! I was advised that if tenants in situ commission was around 35% of the property value and if empty it was 20%! Hopefully due to your property’s location, the value may have remained relatively stable despite its condition, due to property values increased over the past five to ten years! I think the stress and worry this must be causing you is surely worth getting rid sooner rather than later. Good luck anyway!
On the matter of Councils charging empty rates….don’t get me started on that…it’s daylight robbery. In my opinion this is tantamount to theft! They are taking something that doesn’t belong to them. You don’t pay Tax if you don’t earn money, so why pay Council Tax when you’re not earning from the property? You’re not reliant on the Emergency Services, bin collections, road systems, or street lighting! It’s totally immoral. Landlords are being penalised in every way. It’s hardly surprising so many are selling up!

Reply to the comment left by Belinda Sweetland at 13/12/2024 - 10:21
Yes the Government was going to bring in a Bill (Rating in Common Occupation) and Council Tax (Empty Dwellings) Bill 2017-2019 where the government's intention behind the decision to provide billing authorities with the power to charge a premium was not to penalise owners of property that is genuinely on the housing market for sale or rent.

The Government expects billing authorities to consider the reasons why properties are unoccupied and unfurnished, including whether they are available for sale or rent and decide whether they want such properties to be included in their determination.

What ever happened to this bill and why did it not ever get passed?

Reply to the comment left by Nigel Ives at 13/12/2024 - 10:39They couldn’t manage to get the RRB over the line in five years either.
The sticking point is, as everyone has picked up on the point the op didn’t actually raise - how on earth can you just be sitting waiting for a sale after five years. I’ve no doubt this owner is genuine - but if you allow a concession for exemption for that length of time purely on the basis of not finding a buyer then it would be used by everyone setting unrealistic prices or using the most useless agent they could find.

I have had two long term buyers in that time one who pulled out due to complications with the deeds and the process taking so long and the second not being able to get the backing finance she needed. So I have had to pay out on solicitor fees as well to make matters worse!!

Reply to the comment left by Belinda Sweetland at 13/12/2024 - 10:21I suppose it perhaps comes down to more than just cold hard logic. I do feel that this particular seller should be very wary of this sort of discounted sale as he seems to have had no proactive input on his extraordinarily lengthy sale and was not even querying that aspect.
As someone who has been enthusiastic about property since I did maintenance for cash whilst still at school and bought my first house needing full renovation at eighteen in the 1970s - figures of a haircut of 20 to 35% would be a total no no on the model I was operating on - portfolio landlord with student lets and family houses. Sole livelihood for past 20 years and overall LTV around 60% after releasing some equity over the years. Taking that sort of reduction over the portfolio after paying off mortgages and CGT means nothing left!

Having done so much renovation both to sell at profit and to build the rental portfolio, it pained me rather to sell ‘as is’ ex rental but like many was just sick to the back teeth of the way landlords have been treated after being one since 1990. I have finished selling (keeping just one) this summer after having something either on the market or going through conveyancing since Osborne put the boot in back in 2015.
All sold through agents bar a couple I did privately to another landlord. 15 sales in all including one as an executor and one as a POA. Can’t say I didn’t lose my temper a few times and even wished I’d looked at easier options.
And generalists that tenanted houses are worth less are not universally true. My student HMOs sold at premiums with tenants (the area has an Article 4 stopping creation of new ones) in situ and I sold some family lets tenanted (good long term tenants) at better prices than I would have got VP.
For me selling at auction was a step too far, and of course the middleman option of taking a cash sale price below the action price was not of interest. Yes Council Tax to pay, electricity standing charge, water rates if not on a meter, insurance - all factors to promote the quick no hassle sale. But overall it would have cost me about £250k for the convenience.
I did once sell a property with a sitting statutory tenant to a company specialising in that market from one of the many letters I used to get offering to buy it and was pleased with price and professionalism. To offset that, some years ago I was offered £13,500 by WeBuyAnyCar for a vehicle - which I declined and then sold for £17,000 cash to the dealer I bought it from.
Sorry for the lengthy post but do feel the significant loss (up to 20% of possibly around £400k) for saving a relatively short amount of time over what should be a fairly simple straightforward sale if put in auction with a sensible reserve. At least I would recommend getting an appraisal from a good property auction house in addition to looking at discount buying companies.

Yes thanks for the advice.

As for councils charging (double) for empty properties. You can reduce this amount by registering a ghost tenant at the property - Just make up a name and tell the council that person has moved in. Pay the normal council tax they ask your ghost tenant for and you will hear no more about it. They never check the tenant exists, there is no way they can and they can't force your ghost tenant to register on the electoral register. Believe me this works, I have worked for a large organisation and in IT for 40 years and I know how databases and information is liked together.

If the property is inhabitable surely you can get some allowance?

If you gaven’t sold in 5 years will it take 5 more years? Is you have complications with the deeds sort them out or sell at an auction.

How much debt do you want to get in?

Either borrow more , renovate and sell or take the hit now.

Building costs have massively shot up so the longer you leave it either your renovation costs will rocket or your property will devalue because the buyers renovation cost would have risen and hence the lower they would buy at.

Alternatively you could see if someone would buy into a share of the property and use that money fir the renovation - probably unlikely if you have deed issues.

Remove the stress from your life.