10:34 AM, 28th August 2024, About 4 months ago 29
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A new Labour government, Section 24 tax, and the proposed Renters Rights Bill have landlords understandably worried. Coupled with the threat of 45% Capital Gains Tax, it looks like before too long, landlords are going to be “taxed to the hilt.” It makes sense, therefore, that so many are looking to sell again, fast.
About two years ago, Landlords were in a frenzy wanting to sell before interest rates spiked further. Just when they thought they could relax, they’ve been hit with this. “Landlords are thinking: I’m going to sell even more properties now as quickly as possible to hedge my bets, myself included. Labour is also talking about rent caps – which means being a landlord just isn’t as profitable, and even if rent caps don’t come in, they’re considering giving power for tenants to challenge rents. Whilst a fairer environment for tenants is completely justified, the knock-on effect is that property investment is no longer the profitable machine it was 10 to 15 years ago. It seems the golden era is over. It’s time to cash in and get out. But when’s the best time to sell?
The race is on to sell buy-to-let properties before the Labour governments’ tax and tenant policies take full effect and before the market becomes saturated and prices suffer.
But if now is the best time to sell, landlords have another issue on their hands, and that’s how.
Tenants make selling landlord properties extremely challenging, not least because landlords already face a 20% hit on price trying to sell a property with tenants in situ.
The good news is there are two alternatives to evicting tenants that makes the process much faster and help landlords achieve higher sale prices. One option is to help tenants leave of their own accord (thereby allowing owners to sell for higher prices) by helping them solve the problems they face finding new accommodation. Another option is to agree rent increases with those tenants who can afford it (carrot and stick approach is needed here) thereby enabling owners to sell some properties with tenants in situ to other investors for higher prices.
Landlord Sales Agency has been practicing these alternative methods for a long time because not only are they effective, but they are also efficient. The practice is also recommended by successive governments and tenant groups.
Of course, there is a cost involved to the seller to financially compensate a tenant to leave voluntarily but most landlords will sell their properties for a far higher price because they can provide vacant possession and this higher price more than offsets this cost many folds.
In our experience, more than 50% of tenants will agree to a rent increase in order to stay in their property and that can be sufficient to sell with tenants in situ.
Worst case scenario we have to evict the tenant to sell but mostly all tenants cooperate with the process to get rehoused with our help. We still get a buyer in place who will pay a deposit and wait up to 12 months to complete with vacant possession when the tenant is eventually evicted or leaves. The deposit paid by the buyer is a minimum £5000 and buyers also pay a higher price (for the benefit of vacant possession) so the seller has the security of that deposit and higher selling price to proceed with the eviction. Our sales progression and legal team have a 100% track record with this eviction-sale process so landlords can have total confidence in it.
In addition to using tenant-friendly options to sell property, Landlord Sales Agency also use non-refundable deposits to secure agreed sales so that 95% of our agreed sales complete.
In addition, we have a huge database of over 30,000 buyers who are willing to pay deposits and pay good prices up to 90-95% for properties. What’s more, we also have more than a 1,000 cash-buyers in our database who will exchange immediately buy your property in just 28 days if you have any properties, you are willing to sell at 75% market value.
So contact us today, and let us get your properties on the market, fast, before the end of the year.
There’s a window to make money and get out before things potentially become extremely tough, so now’s the time to grasp the opportunity.
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dismayed landlord
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Sign Up11:11 AM, 30th August 2024, About 4 months ago
Me too. My left property under offers in 2 separate LA charges 100 % when empty- rising to 200% after 6 months/ year.
If it is ‘ occupied ‘ by just one person they charge 75%.
Reluctant Landlord
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Sign Up11:16 AM, 30th August 2024, About 4 months ago
Reply to the comment left by Rookie Landlord at 30/08/2024 - 11:06makes total sense. If you don't need the rental income, or dont want a to risk taking a tenant on that you can't get rid of, just tell the CT dept Mr Bloggs is living there and they send him the CT bill. You just pay it yourself.
The point is if 'someone' is living there all you will be charged is the standard CT tax (deductions too if single person ;)). If is is declared as empty the CT rises 100% each year in some areas.
Having the house effectively empty then allows you to sell when you want if that's what you later decide to do. While you may not be getting rent, your 'empty' costs are minimal. If you did then decide to sell you may have made more on the value of the property to displace any costs while 'empty'.
Rookie Landlord
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Sign Up11:34 AM, 30th August 2024, About 4 months ago
Reply to the comment left by Reluctant Landlord at 30/08/2024 - 11:16OK, I see it can make sense in some limited situations, i.e. if you're going to sell imminently, and therefore you can command the market value. But to leave it empty long term makes no sense to me. My ISA has made 8% profit year on year for the past 18 years. I will probably make more than 8% year on year from my property if I take into account rental return plus the money I get when I eventually sell. But if I keep the property empty for even 1 year, that's tantermount to throwing money down the drain.
dismayed landlord
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Sign Up11:41 AM, 30th August 2024, About 4 months ago
Reply to the comment left by Rookie Landlord at 30/08/2024 - 11:34
Correct . It’s not a longe term solution. But given that it now tske 4 7 months to sell a place and where I am the ctax are £2300 to 2800 a year. I had a sale full through . It’s been empty nearly a year. No way am I re letting. Not in the current climate. Only good news the latest buyer is paying £20k more. Less CGT which iReeves looks likely to increase then overall form currentl to after October I will be worse of net proceeds.
Rookie Landlord
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Sign Up11:56 AM, 30th August 2024, About 4 months ago
Reply to the comment left by dismayed landlord at 30/08/2024 - 11:41
When Glen said (s)he would leave the property empty as it was fully paid for, I assumed this was a long term thing as there was no mention of selling.
Wish you all the best with your property.
GlanACC
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Sign Up13:36 PM, 30th August 2024, About 4 months ago
Reply to the comment left by Rookie Landlord at 30/08/2024 - 11:56
Yup can afford to leave the property empty for as long as it takes me to sort out CGT and IHT issues, so long term if necessary. I will not be taking any more tenants when my properties become empty (except for 'ghost' tenants - and if they DON''T pay the council tax I would be interested to see what the council could do- tenant is uncontactable )
Paul
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Sign Up9:43 AM, 31st August 2024, About 4 months ago
I'll just keep taking the rent and recycling into ISA's, JISA's and SIPP's. If I need a lump sum I'll put a mortgage on something unencumbered and in the company. Let's see who the next government is in 4 years or 8 years. Wow, that will make me 65. The only thing that might cause me to sell is EPC, but that's only on a few houses. I'm not too concerned about not getting people out of houses, the normal churn is one house becomes available every 1 or 2 years. I have some HMO's which are easier to clear out. If I need to get a low rate of tax, I can shift some stuff to the wife. So, let's see what the details are and adapt accordingly.
Smiley
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Sign Up10:37 AM, 31st August 2024, About 4 months ago
Reply to the comment left by northern landlord at 28/08/2024 - 11:28
Im trying to get these scaremongering headlines.....and they then offer to sell buy ya house or take this awful bad potatoes of your hands, lol These folks are not bad people, but if you are venerable you will regret the temporary peace of mind long term imho hang in mates this group is for landlords xxx
Christopher Lee
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Sign Up11:43 AM, 1st September 2024, About 4 months ago
Reply to the comment left by James Vai at 28/08/2024 - 19:33
Living in a property for 3 years does not extinguish any CGT liability!
You may be thinking of the old rule whereby if you lived in it at the end you automatically got a minimum of 3 years over the ownership period (all calculated in months). So if you owned it for 10 years, you got a relief on 36/120 of the total CGT liability. That's since been reduced to 9 months though.