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longtomsilver

Accidental Landlord

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I was chatting to the father of one of my daughters friends at a children's party today - he is a dr so must be fairly intelligent and we got on to the topic of why he took his daughter out of our (fee paying) school. He humbly declared that his house sale fell through a while back and they are yet to find another buyer, they were pressured by the estate agent to take out a second mortgage and buy the new house before it was snapped up and that his old home would fly off the shelf. It didn't and he's been stuck with two mortgages ever since.

I still find it astounding that an unqualified snake oil salesman can peddle the most expensive purchase for most people in their whole lives. I find it more surprising that a supposedly intelligent individual took the bate. 

He is concerned that the 3% second home stamp duty will soon be cemented in and that he was going to look at renting the property out. I mentioned S24 and while he had heard of the new policy he was surprised to learn it was coming into affect next year and was only informed of it's mechanisms by me.

The estate agents advice was to spend lots of money to make the house more saleable (sadly followed), mine was not to and to take a hair cut (just as unqualified I might add).

Don't know the sums involved but being a dr likely to be more than most mere mortals.

*edit: he's still waiting on a mysterious buyer relocating home from Dubai **cash buyer that the EA keeps talking about. I'm calling bulls*** on that one but didn't say.

Edited by longtomsilver
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Yep, taking advice from a completly unqualfied eejit with vested interests on what is quite likely the largest financial transaction of his life was hardly a smart move. But I really dont understand how these know it all agents get away with giving finanical advice in the first place. Why have qualified experienced people who can be held accountable for their advice when any tom dick or harry with hair gel, a landlord forum or a newspaper column can do it completly free of consequences? Its mad. 

Edited by little fish
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V good anecdote! Utterly crazy but It doesn't really surprise me...  

When there's been nigh on 20 years of one way house price growth (in the SE anyway) then its not surprising that everyone from well educated doctors to the local Bin Man thinks property is a one way bet.  That is what we are up against now - How long will it take for this now deep rooted positive bias sentiment to turn against housing in a meaningful way that precipitates real and sustained price reductions ....... 

 

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27 minutes ago, Crash&Carry said:

V good anecdote! Utterly crazy but It doesn't really surprise me...  

When there's been nigh on 20 years of one way house price growth (in the SE anyway) then its not surprising that everyone from well educated doctors to the local Bin Man thinks property is a one way bet.  That is what we are up against now - How long will it take for this now deep rooted positive bias sentiment to turn against housing in a meaningful way that precipitates real and sustained price reductions ....... 

 

I think you'll be surprised how quickly sentiment can turn. 20% down in a year, and then similar in another year, wall to wall horror stories in the media - and everyone will saying don't touch property because they simply spout what the newspapers tell them to. 

I can only think of one person who was in "fill your boots" mode in the mid 90s regarding property and that my boss at the time. Sadly, he conveniently forgot to notice he wasn't paying me enough to join him. Needless to say, he owns a ton of commercial and domestic property - no doubt all fully paid off. I don't think he's bought anything since around 2000 though. 

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3 hours ago, longtomsilver said:

he is a dr so must be fairly intelligent

They are just rank and file for the money dishing out medication that is regulated by a body (MHRA) which is 100% funded by the pharmaceutical industry and don't know what CYP4502D6 is.

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23 hours ago, longtomsilver said:

I still find it astounding that an unqualified snake oil salesman can peddle the most expensive purchase for most people in their whole lives. I find it more surprising that a supposedly intelligent individual took the bate. 

You should only follow the advice of qualified snake oil salesmen!

If he believes prices will continue to rise he can probably expect more than 3% of capital appreciation, so shouldn't worry about the stamp duty.

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