Time to raise the rents. Posted February 14, 2005 Posted February 14, 2005 I told you that I would be trying to buy a place if I can convince the vendor to offer a gifted deposit. This would be a measure of whether they were desperate or not. The status now is that the house has gone under offer from another buyer. I guess the market isn't that bad hey? Here is the house, you'll just have to take my word that it went under offer in the last business day or two. If anyone's bold enough, you can try to get the price out of the agent by telephone. It was originally up for £480k & was reduced to £460k recently. http://laurs.webdadi.biz/details.dtx?prope...56-035D842FED47
Van Posted February 14, 2005 Posted February 14, 2005 I guess he didn't like your idea of a gifted deposit. Can't say I blame him - very confusing. House sales are difficult enough with added complications imho.
Guest wrongmove Posted February 14, 2005 Posted February 14, 2005 I guess he didn't like your idea of a gifted deposit. Can't say I blame him - very confusing. House sales are difficult enough with added complications imho.<{POST_SNAPBACK}> And I assume that if the vendor is an investor, they will have to pay CGT on the gift !
Time to raise the rents. Posted February 14, 2005 Author Posted February 14, 2005 I guess he didn't like your idea of a gifted deposit. Can't say I blame him - very confusing. House sales are difficult enough with added complications imho.<{POST_SNAPBACK}> Why assume that? I haven't even looked at the place yet because I'm still in Sweden. I'm just saying that I'd targeted it for that type of offer when I'm in London which is very soon. But it's gone under offer before I even had a chance.
London-loser Posted February 14, 2005 Posted February 14, 2005 It would be interesting to know what the offer was - although I'm not calling to try to find out. And also how well the chain that presumably underpins such a purchase works out. It will be interesting also to see how long it takes to sell. Perhaps he'll take your gifted deposit offer in nine month's time once an offer or two hasn't come to fruition? Perhaps you'll drop the price on him by then too?
Marina Posted February 14, 2005 Posted February 14, 2005 Looking at RightMove - Battersea - this area only - 400k to 500k - I would say that property was already keenly priced. And, if they took an offer 25k less - then it was very keenly priced. What does it prove? That the market has moved down? Definitely! There is similar stuff on the market for way over 500k - no wonder it sold. It also proves the London market is out on its own. Why anyone would pay getting on for half a million to live in a terrace is beyond me. Half a million to still listen to the boom, boom, boom through the walls. I think people like TTRTR think that finding a cheap property that actually sells proves the market is not going to fall further. Why? In every property crash, houses don't simply stop selling. Prices move down gradually and there are lots of false dawns. On they way down people still buy because they have to or really want to. What does it matter? The only way is down for the next few years.
Justice Posted February 14, 2005 Posted February 14, 2005 TTRTR I'm just saying that I'd targeted it for that type of offer when I'm in London which is very soon. But it's gone under offer before I even had a chance Don’t worry I’m sure you will have plenty more to choose from as I heard on the news today that price are stagnant having dropped 0.7% in December. I love a stagnant market don’t you TTRTR
Time to raise the rents. Posted February 14, 2005 Author Posted February 14, 2005 I hope I do get another chance Justice, because I make such a tidy living off my tenants that I only want more! LL. Good point mate. If the sale falls through, the chance of getting a good deal will only increase!
Michael Posted February 14, 2005 Posted February 14, 2005 you said you were paying £20k a go for loft conversions to some of your BTL places................how long do these take and are you able to do them with existing tenants in situ in the same property?.......
Sold up and Renting Abroad Posted February 15, 2005 Posted February 15, 2005 I told you that I would be trying to buy a place if I can convince the vendor to offer a gifted deposit. This would be a measure of whether they were desperate or not.The status now is that the house has gone under offer from another buyer. I guess the market isn't that bad hey? Here is the house, you'll just have to take my word that it went under offer in the last business day or two. If anyone's bold enough, you can try to get the price out of the agent by telephone. It was originally up for £480k & was reduced to £460k recently. http://laurs.webdadi.biz/details.dtx?prope...56-035D842FED47 <{POST_SNAPBACK}> Being really thick here, what is a gifted deposit ??
King of the castle Posted February 15, 2005 Posted February 15, 2005 Being really thick here, what is a gifted deposit ??<{POST_SNAPBACK}> Hello Sold up, Quick basic example: 400k purchase would require 60k deposit, the vendor actually gives you this 60k so effectively you buy the house for 340k , and you've got no money in the deal. This only really works if the house will value up @ 400k and they are happy to take 340k for it (the amount of the 'gift' could of course be for a lesser amount, the example I've given is assuming a full gifted deposit) KOTC.
Sold up and Renting Abroad Posted February 15, 2005 Posted February 15, 2005 Hello Sold up, Quick basic example: 400k purchase would require 60k deposit, the vendor actually gives you this 60k so effectively you buy the house for 340k , and you've got no money in the deal. This only really works if the house will value up @ 400k and they are happy to take 340k for it (the amount of the 'gift' could of course be for a lesser amount, the example I've given is assuming a full gifted deposit) KOTC. <{POST_SNAPBACK}> Hi KOTC, So basically, the vendor is giving a discount, the amount (in this case) being the deposit amount ? Why is this being 'dressed' up as a gift (something maybe to do with valuation purposes maybe) ?? (yes, still being thick !) Thanks.
King of the castle Posted February 15, 2005 Posted February 15, 2005 Why is this being 'dressed' up as a gift (something maybe to do with valuation purposes maybe) ??(yes, still being thick !) Thanks. <{POST_SNAPBACK}> Hello again, The discount is dressed up as a gift, so both the vendor and the purchaser both benefit. That is to say the vendor gets their price and the purchaser gets a property (cashflow +'ve if he's done his homework right) by using none of their own money. Here's a working example of a GD from SP, http://www.singingpig.co.uk/discussion/forum/?f=8&m=47294 142k purchase would require 21k deposit, this vendor proposes to gift you (as cashback) one third of that, leaving the investor only the other two thirds to find. Obviously the vendor has set the deal up so he nets 135k (putting costs aside for a second) There are a few variations on GD (such as the vendor taking out a seperate loan to pay your depsosit believe it or not!), both in the way the deposit is created and how it is actually paid, however that is the basics. So for the above deal all the purchaser would have to do is find a lender that would be OK with this sort of deal. I think I'm right in saying TTRTR was going for a full GD, or at least that is what he was proposing. KOTC.
newbie Posted February 15, 2005 Posted February 15, 2005 Hi KOTC,So basically, the vendor is giving a discount, the amount (in this case) being the deposit amount ? Why is this being 'dressed' up as a gift (something maybe to do with valuation purposes maybe) ?? (yes, still being thick !) Thanks. <{POST_SNAPBACK}> It smacks of mortgage fraud to me. The bank is being deceived into thinking that it is financing 85% of a £400,000 purchase when it is actually financing 100% of a £340,000 purchase. If the poo hits the fan and the bank can't get the entire £340,000 back, there could be criminal repercussions for both the buyer AND the vendor (conspiracy to defraud, etc). Of course, if all this gifting business happens with the full knowledge and consent of the bank, then it would to be fine. But somehow I doubt that the scheme is intended to operate in this way.
King of the castle Posted February 15, 2005 Posted February 15, 2005 It smacks of mortgage fraud to me. The bank is being deceived into thinking that it is financing 85% of a £400,000 purchase when it is actually financing 100% of a £340,000 purchase.If the poo hits the fan and the bank can't get the entire £340,000 back, there could be criminal repercussions for both the buyer AND the vendor (conspiracy to defraud, etc). Of course, if all this gifting business happens with the full knowledge and consent of the bank, then it would to be fine. But somehow I doubt that the scheme is intended to operate in this way. <{POST_SNAPBACK}> There are lenders who accept GD's, there is nothing fraudulent about it. Don't forget there are solicitors involved on both sides of this transaction as well.
newbie Posted February 15, 2005 Posted February 15, 2005 There are lenders who accept GD's, there is nothing fraudulent about it. Don't forget there are solicitors involved on both sides of this transaction as well.<{POST_SNAPBACK}> It also potentially defrauds the Revenue as you seem to get an overinflated costs base for Capital Gains Tax purposes. It clearly defrauds if the money passes back 'under the table'. On the other hand, you are also paying a bit extra in stamp duty. Not sure that it makes up for it though.
Guest wrongmove Posted February 15, 2005 Posted February 15, 2005 On the other hand, you are also paying a bit extra in stamp duty. Not sure that it makes up for it though.<{POST_SNAPBACK}> If the vendor was not the OO, would they have to pay CGT for the full amount, including the gift ?
Adam Bear Posted February 15, 2005 Posted February 15, 2005 I thought that if you gave a gift of over £3000 to someone, it is taxable at the receivers Income Tax rate? Wouldn't that mean that the gift is taxable?
StrangeTimes Posted February 15, 2005 Posted February 15, 2005 I thought that if you gave a gift of over £3000 to someone, it is taxable at the receivers Income Tax rate?Wouldn't that mean that the gift is taxable? <{POST_SNAPBACK}> Yes the gift would be subject to income tax at the recipients rate. The mere presence of solicitors does not make every aspect of the transaction legal. The solicitors are involved in the conveyancing and the draft of papers relating the gifted deposit. There are unlikely (or indeed unwilling) to know what people have put on their mortgage application forms or what people put on their tax returns. As a banker myself, if I came across an incidence of a gifted deposit where we had not consented, and I believed the bank had been deceived, I would come down on those involved like a ton of bricks using the very expensive lawyers we have at our disposal! Not only is fraud/deceipt unacceptable in its own right, but it is structures like this that have perpetuated the house price boom enabling people who otherwise could not buy a property to be able to obtain it - in the long run, this will just make the pain worse and more drawn out. Sorry to be a pompous twit but I hate all this BTL "property millionaire" crap.
Cityfool Posted February 15, 2005 Posted February 15, 2005 I thought that if you gave a gift of over £3000 to someone, it is taxable at the receivers Income Tax rate?Wouldn't that mean that the gift is taxable? <{POST_SNAPBACK}> Gifts are not taxable (except possible IHT claw back). I don't know of any lenders out there who will accept a GD scheme (if as DB says there are some I strongly suspect these are secondary tier/sub prime lenders who will charge high rates as the quid pro quo) as the reality of it is that the vendor has simply dropped its priced and the new lower price therefore represents the open market value of the property. GD's which are not disclosed to the lender do I am sure take place particularly between connected parties but these are fraudulent.
CrashIsUnderWay Posted February 15, 2005 Posted February 15, 2005 OK, so not only is 'King of the Cardboard Box' a simpleton, but he is also a criminal. And he is actually trying to incite other people on this board to commit criminal acts, the incitement itself carrying a hefty sentence! The mods really HAVE to do something now, because otherwise they could be construed as 'aiding and abetting' - a serious offence. Would suggest 'losing ' KOTCrapper's posts and his log in rapidly, before some right-minded citizen points the law and the tax man at this board. Ahem. At the very least, the mods should try and find out exactly who this tossa is, by checking his IP records against his ISP. Withholding that sort of info from the Police carries a VERY large fine.
Sold up and Renting Abroad Posted February 15, 2005 Posted February 15, 2005 As a banker myself .......... I would come down on those involved like a ton of bricks using the very expensive lawyers we have at our disposal! 'Expensive' as in 'good' ?? Sorry to be a pompous twit but I hate all this BTL "property millionaire" crap.<{POST_SNAPBACK}> StrangeTimes, you don't sound like a pompous twit at all. In fact I'm extremely interested in hearing your views regarding 'BTL property millionaire crap' - especially as you are in Banking. Please share your thoughts.
Mr Tickle Posted February 15, 2005 Posted February 15, 2005 In fact I'm extremely interested in hearing your views regarding 'BTL property millionaire crap' - especially as you are in Banking.Please share your thoughts. <{POST_SNAPBACK}> Me too, please do share your thoughts, I get sick of all this 'Its my pension' stuff as well, seems I'm the only person within a 5 mile radius who hasn't joined the btl party :angry:
London-loser Posted February 15, 2005 Posted February 15, 2005 I hope I do get another chance Justice, because I make such a tidy living off my tenants that I only want more!LL. Good point mate. If the sale falls through, the chance of getting a good deal will only increase! <{POST_SNAPBACK}> Yup, I'd say you are better off hanging on.
London-loser Posted February 15, 2005 Posted February 15, 2005 Sorry to be a pompous twit but I hate all this BTL "property millionaire" crap. I find it all quite amusing to be honest - the idea that having £1 million of property makes you "a property millionaire". Hilarious! My parents tell me that in their day having massive debts wasn't something you boasted about. How times change.
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