General Discussion: Property thread


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themistake
themistake avatar

10747 posts since 20/2/06

18 Oct 2020 05:59
Toasted wrote:
Rirawin wrote: How do the mortgage lenders actually know that:

1) You're not letting family staying there rent free
2) You're letting it out as an Airbnb. Do they carry out checks on who pays the council tax or ASTs that have been signed?
3) Is a Holiday Let Mortgage better to consider if it's used 50/50 between family staying there and letting it out as an Airbnb?

Asking for a friend.

Estate agents are snitches. It happened to me.

What happens when you sign up to let your place out?
Does your property go on rental register or something?

My mate just agreed to rent his place out and he said within a week all his utility bills were reset and addressed to ‘the occupier’ without him doing anything.
joeyjojo
joeyjojo avatar

4344 posts since 24/8/06

18 Oct 2020 07:37
That’s a bit weird? How did anyone know? Even if you put it on rental services how would anyone knows it’s actually been let out?

I guess it’s quite handy though as it’s annoying ringing around.
Leap
Leap avatar

5 posts since 27/1/10

18 Oct 2020 10:57
Rirawin wrote: Further to the above. Anyone here setup a limited company to reduce income tax on a rental?

Generally the reason people do this is:
1. If you're a 40% taxpayer you only get 20% relief on the mortgage interest. The company gets normal Corporation Tax relief on mortgage interest so the tax is much lower.

2. If you don't need access to the rental income straight away, the company can save up profits after paying just 19% tax. You pay tax on dividends only when the profits are distributed. Any money you put into the company to cover the deposit can be repaid to you tax free though.

Note that if you do extract all profits as dividends then the effective rate you pay between corporate and personal tax is (32.5% * 100/81) = 40%. The difference is you've got full relief for mortgage interest.

3. When you sell the property you'd generally sell the company instead. CGT on residential property is 28% but for shares it's 20%.

It only works if you don't already own the property as transfering ownership from personal to company incurs stamp duty which wipes out any tax advantage.

The cost of setting up and running the company, especially for just one property, would offset the tax advantage you get.

Mortgages for ltd companies are a bit harder to come by and might have higher interest rates.

Whether it works for you would depend completely on your numbers.
seenmy
seenmy avatar

6598 posts since 17/6/06

posted 18 Oct 2020 10:58, edited 18 Oct 2020 10:58
jacko198 wrote: I guess at the time we just thought of course it would sell! I guess thats what anyone using the help to buy is thinking. It is a decent flat dont get me wrong. And the floor space was bigger than most new build 2 beds.
Our neighbours just rented theirs out for £1500 odd a month so ill go down that route if I have to but theres ALOT more to think of then with buying a second house etc!

you will need to have plus 25% equity to switch to a buy to let and then stump up the 3% stamp duty for a second home, 1500 on a 250k gaff though is not bad rent.

re renting i think in general as long as the mortgage is being paid they dont really care, but obviously by the letter of the law you are committing fraud, and if the place burnt down etc you would have issues, in rirawins situation i think holiday let mortgage would suffice as you could just claim family was staying their carrying out maintenance etc.

I would assume bills getting switched to the occupier could be to do with switching the council tax (even if property is empty/between tenants)
Best
Best avatar

9877 posts since 21/10/05

18 Oct 2020 15:32
themistake wrote:
Toasted wrote:
Rirawin wrote: How do the mortgage lenders actually know that:

1) You're not letting family staying there rent free
2) You're letting it out as an Airbnb. Do they carry out checks on who pays the council tax or ASTs that have been signed?
3) Is a Holiday Let Mortgage better to consider if it's used 50/50 between family staying there and letting it out as an Airbnb?

Asking for a friend.

Estate agents are snitches. It happened to me.

What happens when you sign up to let your place out?
Does your property go on rental register or something?

My mate just agreed to rent his place out and he said within a week all his utility bills were reset and addressed to ‘the occupier’ without him doing anything.

Estate agents sell the data to various sources and the utility companies buy it as a way of marketing directly to potential new customers. The Royal Mail do the same when you register for mail forwarding. This is all pre GDPR though, so not sure of the current setup. Utility businesses couldn’t care less who is the resident as long as they pass a credit check and pay their bills.
Kadafi39
Kadafi39 avatar

1775 posts since 30/10/09

19 Oct 2020 14:02
seenmy wrote:
jacko198 wrote: I guess at the time we just thought of course it would sell! I guess thats what anyone using the help to buy is thinking. It is a decent flat dont get me wrong. And the floor space was bigger than most new build 2 beds.
Our neighbours just rented theirs out for £1500 odd a month so ill go down that route if I have to but theres ALOT more to think of then with buying a second house etc!

you will need to have plus 25% equity to switch to a buy to let and then stump up the 3% stamp duty for a second home, 1500 on a 250k gaff though is not bad rent.

re renting i think in general as long as the mortgage is being paid they dont really care, but obviously by the letter of the law you are committing fraud, and if the place burnt down etc you would have issues, in rirawins situation i think holiday let mortgage would suffice as you could just claim family was staying their carrying out maintenance etc.

I would assume bills getting switched to the occupier could be to do with switching the council tax (even if property is empty/between tenants)

This is what I have found in most cases I know lots of people on normal mortgages who don't switch products on the first home when buying another house or moving in with a partner etc and then letting the previous home out with no issues.

Kepp the council tax and utilities if possible in the mortgagors name and provided you don't start missing payments the lender is not going to knock on your door to check who lives there!

Worth noting though it can become slightly more complicated with leasehold property as the managing agents know who's supposed to be living there so might be worth being upfront with them, theyre not going to notify your lender in any event anyway.
Rirawin
Rirawin avatar

9405 posts since 17/7/05

20 Oct 2020 08:52
Thanks all. A lot to think about. Will need to run the numbers and see what makes sense.
Razorlight123
Razorlight123 avatar

4673 posts since 13/1/10

posted 22 Oct 2020 07:19, edited 22 Oct 2020 07:19
Are the estate agents taking the piss here?!
We've been in negotiations for a property for a few weeks now.

There's quite a lot of work to be done on the property, so we started off low, and eventually made a much closer to asking offer last week Thursday, which the seller / estate agent stated was closer to what they were looking for. She (estate agent) however stated they were having a block viewing on Saturday, and that they would get back on Monday.

Now, on Monday I noticed that they've put the property as a 'featured property' on right move. Also since Monday, whenever I call to ask, 'what's the update'; firstly on Monday the estate agent asked me again, what my offer was and if it was my final offer (why am I being asked again?!) - then yesterday I got the 'he's not made a decision yet'.

I'm tempted to just put forward a deadline today for the seller to make a decision, but it seems a risky tactic.

I get that the seller is trying to hold onto my offer whilst trying to get a higher offer, but for a week… surely that's not fair?!

Crackajack
Crackajack avatar

7663 posts since 21/4/05

22 Oct 2020 08:34
They can do that, and giving a deadline could give you certainty if you are prepared to walk away. If they know you are chain free they may feel any deadline is a bit artificial. The EA will probably te them they have the highest offers they can get after X amount of advertising but some people are stubborn or want a certain figure.

Main thing is that when an offer is accepted they agree it is no longer marketed. You can't really blame them for wanting the maximum, at same time you should/can view and offer on others. If there is work to be done you may will want a survey and this could be a way to reduce agreed price later in the process.
jacko198
jacko198 avatar

422 posts since 23/10/09

22 Oct 2020 09:10
This happened to my brother. He kind of knew the guy who's house he was trying to buy, went round to talk to him about it and it turned out that the estate agent hadn't even passed on his offer to him whilst at the same time asking him to up his offer etc
They both drove around to the estate agents and gave them a bollocking Laughing out loud

The offer he had put in was the asking price which the seller was more than happy to take.

Estate agents are helmets.

Try and talk to the seller if you can, you never know what they are actually being told!
Crackajack
Crackajack avatar

7663 posts since 21/4/05

22 Oct 2020 09:15
That's pretty poor. I think they are legally required to put any offers to the vendor?
seenmy
seenmy avatar

6598 posts since 17/6/06

22 Oct 2020 09:53
you can't trust estate agents fact
Mookie_blaylock
Mookie_blaylock avatar

1616 posts since 19/7/06

22 Oct 2020 11:42
jacko198 wrote: This happened to my brother. He kind of knew the guy who's house he was trying to buy, went round to talk to him about it and it turned out that the estate agent hadn't even passed on his offer to him whilst at the same time asking him to up his offer etc
They both drove around to the estate agents and gave them a bollocking Laughing out loud

The offer he had put in was the asking price which the seller was more than happy to take.

Estate agents are helmets.

Try and talk to the seller if you can, you never know what they are actually being told!

This

Estate Agents are cunts, with very few exceptions
cutandpaste
cutandpaste avatar

589 posts since 11/6/10

posted 22 Oct 2020 16:43, edited 22 Oct 2020 16:43
It’s not really in the agents interest to sit on offers or keep marketing it, as they just want it sold at any price with little work done as possible.

The not passing on offers to seller seems pretty dodgy, only thing I can think of is they had someone in mind to buy it, which is super dodgy.
Razorlight123
Razorlight123 avatar

4673 posts since 13/1/10

posted 23 Oct 2020 07:27, edited 23 Oct 2020 07:27
I think because the estate agent is acting on behalf of a business, who seem to have quite a number of properties on their books (Godbless Companies House) - so they are not in any real rush.

Had this been an 'individiual to individual' transaction, this would be much smoother and quicker.