Omg My House Has Been Flipped !

[kevla22]

Hi Kevla

I have no problem with you being a property developer

There is a big difference between selling a house and a home - you sell houses they are not personal to you - selling a home has more emotions attached

How about giving us your take on the property market?

CS

Hi,

Thats a really good point, some of the houses i have bought i have grown attached too due to the "feel" of the house, does make selling them much harder!

At the moment i think the market is reasonably healthy, though i do agree that eventually something has to give!

I suppose if you look at historical data then its easy to draw the conclusion that there will be a crash, in a way i hope there is a crash as it will make my life a little easier.

At present an agent will value a property based on what similar properties have sold for in the area, if the house needs work then the agent will guess how much needs to be spent and deduct that amount from the asking price, this means that making a profit is extremely hard!

It really does take months to find a realistically priced property, and they are usually houses where the seller needs a quick sale.

Anyway back to the state of the market! Okay so first time buyers have been priced out of the market, but this gap has been filled by BTL investors so it hasn't really had the impact to the market people thought it would, it just means that the market has changed slightly.

With divorce now more common and single occupancy on the rise renting is generally on the up (although there are areas that are flooded with BTL properties as people try to cash in) , i think the market is evolving as a result of this, you only have to look at all the new developments of flats throughout the UK.

The good thing is the government learnt from the last crash in the early nineties, and they do have a measure of control on the market, stamp duty for example has been a big help, its artificially kept prices down (mostly at the 250k bracket), interest rates are also a good tool for cooling the situation which has worked well in previous months. The government seem to be playing it cool, making small adjustments to interest rates and waiting to see what happens, it certainly curbed consumer spending and house price growth, which i personally think is good!

The fact that interest rates have been handed over to the bank of england should be a good thing, it worked for Germany following the war.

If wages don't rise and property value continues to grow then the bubble will burst at some point, but on the flip side demand is still outstripping supply. The government needs to be building 120,000 new homes each year to keep up with current demand, and with the shortage of plots for sale this won't be achieved.

I suppose my answer is No, i don't think there will be a crash as long as interest rates don't rocket, or at least not in the net two years.

But its all swings and round-a-bouts, i wouldn't bet money on it either way!

cheers

Edited April 13, 2006 by kevla22

[Cornwall Sceptic]

Hi,

Thats a really good point, some of the houses i have bought i have grown attached too due to the "feel" of the house, does make selling them much harder!

At the moment i think the market is reasonably healthy, though i do agree that eventually something has to give!

I suppose if you look at historical data then its easy to draw the conclusion that there will be a crash, in a way i hope there is a crash as it will make my life a little easier.

At present an agent will value a property based on what similar properties have sold for in the area, if the house needs work then the agent will guess how much needs to be spent and deduct that amount from the asking price, this means that making a profit is extremely hard!

It really does take months to find a realistically priced property, and they are usually houses where the seller needs a quick sale.

Anyway back to the state of the market! Okay so first time buyers have been priced out of the market, but this gap has been filled by BTL investors so it hasn't really had the impact to the market people thought it would, it just means that the market has changed slightly.

With divorce now more common and single occupancy on the rise renting is generally on the up (although there are areas that are flooded with BTL properties as people try to cash in) , i think the market is evolving as a result of this, you only have to look at all the new developments of flats throughout the UK.

The good thing is the government learnt from the last crash in the early nineties, and they do have a measure of control on the market, stamp duty for example has been a big help, its artificially kept prices down (mostly at the 250k bracket), interest rates are also a good tool for cooling the situation which has worked well in previous months. The government seem to be playing it cool, making small adjustments to interest rates and waiting to see what happens, it certainly curbed consumer spending and house price growth, which i personally think is good!

The fact that interest rates have been handed over to the bank of england should be a good thing, it worked for Germany following the war.

If wages don't rise and property value continues to grow then the bubble will burst at some point, but on the flip side demand is still outstripping supply. The government needs to be building 120,000 new homes each year to keep up with current demand, and with the shortage of plots for sale this won't be achieved.

I suppose my answer is No, i don't think there will be a crash as long as interest rates don't rocket, or at least not in the net two years.

But its all swings and round-a-bouts, i wouldn't bet money on it either way!

cheers

I agree with a lot you say it's very difficult to predict what is going to happen - I think different things will happen in different areas - I run a business in Birmingham and live in Cornwall and the markets are very different - only time will tell

If I had a portfolio of rental properties of similar size/quality all close to each other I would be worried and thinking about bailing out

Regards

CS

[teddyboy]

Kevla22,

Welcome - good to get a balanced view and your not like TTRTR and laugh at other peoples misfortunes.

I agree with most of what you have posted but I want your reasoning on one of your points:

With divorce now more common and single occupancy on the rise renting is generally on the up (although there are areas that are flooded with BTL properties as people try to cash in) , i think the market is evolving as a result of this, you only have to look at all the new developments of flats throughout the UK.

Whilst I can understand this POV I dont subscribe to it. I know times have changed but in BOTH directions.

Years ago, nearly everyone got married . Lets say 1000 people and divorce rates were low (1%) so 20 people (10 couples) got divorced. Nowadays very few people actually get married lets call it 500 couples. But divorce rates are say 5%? 5 times the divorce rate. This equates to 40 people (20 couples). So whilst the later is at 5 times the average rate its only 2 times the number of people to house. So we can agree that there is more demand for single occupancy based on divorce rates. YES!

But thats not the complete picture. The only demand is for these luxury apartments. We have entered the phase of YUPPIE HOUSING. People find this TRENDY to have an apartment coz its a BUZZ WORD. You as a BTL must see this. The demand is there not to do with MARRIAGE its to do with society. Single / co-habitors / married are all buying these.

The only demand I can see is this type of property. This happened in the 60's with all these high rise flats. Eventually they were all knocked down. I would not be surprised if a lot of these were demolished before I meet my maker. These flats/apartments are the reason for HPI imho. They charge silly money for them so the semis and alike HAVE to go up in ratio.

I dont believe that the HPI in the family home is caused by demand outstripping supply. Once this BULL run of apartments comes to an end and people are losing THOUSANDS on their Investment then there will be a flood of these on the market. These will become the starter homes imho as I expect these to drop by upto 50%. The ones that own these and want to go up the next step of the ladder may not be able to because they are in NE. This will force prices down in the semi/detached markets also.

IN SUMMARY: BTL in apartments is propping up the market because its the new YUPPIE thing to buy. Its nothing to do with divorce imho.

TB

[www]

One of the mysteries of the English language... phrases such as 'all generalisations are wrong'.

Extending the metaphor(?)... my advice would be to never take advice from an internet forum.

And, adding to that, The only people you can trust are those that would willingly suffer to make your life better.... i.e. your close family.

And so what if you lose 30k.... things are expensive these days and 30-50k really is small change anyway in terms of survival.

[Guest Winners and Losers]

One of the mysteries of the English language... phrases such as 'all generalisations are wrong'.

Extending the metaphor(?)... my advice would be to never take advice from an internet forum.

And, adding to that, The only people you can trust are those that would willingly suffer to make your life better.... i.e. your close family.

And so what if you lose 30k.... things are expensive these days and 30-50k really is small change anyway in terms of survival.

Another top rate first post!

[iLegallyBlonde]

Tragically the advice we listened to was my mother and his mother, unfortunately they both had vested interests in not looking after the grandchildren whilst we painted the house and neither are prepared to stump up the £35k we've lost it would seem, although as said before it hasn't sold yet.

I came on here to confirm what I already thought that we should cut our loses and run, the house is a lemon, it's too expensive for any first time buyer, very few couples and it's useless for families.

And it'll probably go for the asking price knowing my bloody luck.

[Guest Winners and Losers]

Tragically the advice we listened to was my mother and his mother, unfortunately they both had vested interests in not looking after the grandchildren whilst we painted the house and neither are prepared to stump up the £35k we've lost it would seem, although as said before it hasn't sold yet.

I came on here to confirm what I already thought that we should cut our loses and run, the house is a lemon, it's too expensive for any first time buyer, very few couples and it's useless for families.

And it'll probably go for the asking price knowing my bloody luck.

FFS, those mothers and their vested interests!!!

You know what terrified, if it does go for asking price SO WHAT. It just means that some complete muppet has been suckered. It does not mean that you LOST anything. Like I said, I could have gone back to live in my place and fixed up it before I sold it etc., but at the time I was prepared to cut my losses too. I had just been through a traumatic divorce and just wanted out. The thing that people on this site never account for is emotions. We are not robots FGS! Sometimes circumstances mean we cannot make the best decision at the time. How many people snap up not so perfect properties, spruce them up a bit and sell them for a profit? It happens all the time. Do you think all the sellers are pissed off and thinking 'I should have done that'. They didnt. Probably because of circumstance or they just were not interested. Not everyone is obsessed with making money on property. Who is to say they wouldnt have done the same thing as you, given the circumstances? I wonder what people did before the t'internet. Did they run around to every estate agent constantly searching to see if their house has been put back on the market and what it sold for?

Edited April 14, 2006 by Winners and Losers

[iLegallyBlonde]

You are right of course, I guess it's just a bitter pill to swallow that we can't buy a nice 4 bed semi, for the price we sold it for and could for the price they are asking, all for the sake of a lick of paint and a weekends work.

[Guest Winners and Losers]

You are right of course, I guess it's just a bitter pill to swallow that we can't buy a nice 4 bed semi, for the price we sold it for and could for the price they are asking, all for the sake of a lick of paint and a weekends work.

Maybe. Only MAYBE. You are afflicted with the curse of hindsight. I know how bad that can be. Just remember that you are now privvy to information that you could not have foreseen at the time. You will get there again, it will just take a bit longer.

[the end is a bit nigher]

Tragically the advice we listened to was my mother and his mother, unfortunately they both had vested interests in not looking after the grandchildren whilst we painted the house and neither are prepared to stump up the £35k we've lost it would seem, although as said before it hasn't sold yet.

I came on here to confirm what I already thought that we should cut our loses and run, the house is a lemon, it's too expensive for any first time buyer, very few couples and it's useless for families.

And it'll probably go for the asking price knowing my bloody luck.

Don't be too hard on yourself - apart from dodgy advice, you have sold now - yes, someone might make an extra £30k but they are taking the risk and stress for doing this. It's not easy to sell any asset at the very top and one of the adages of of good investing is to always leave a bit for the next man (or woman). As many of us say, if property was already on the way down, why would anyone in their right mind buy it?

p.s. just noticed that the EA is on Sheep Street

BAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAa

[iLegallyBlonde]

A lamb to the slaughter

[Given Up]

Don't be too hard on yourself - apart from dodgy advice, you have sold now - yes, someone might make an extra £30k but they are taking the risk and stress for doing this. It's not easy to sell any asset at the very top and one of the adages of of good investing is to always leave a bit for the next man (or woman). As many of us say, if property was already on the way down, why would anyone in their right mind buy it?

p.s. just noticed that the EA is on Sheep Street

BAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAa

Yeah, what's 30k - nothing compared to the huge losses people are promised when HPC rukes OK

[Lou G]

House round the corner from me was for sale at £295k, sold January for £277k. Now on with the same agent for £385k but no photos and obviously quickly painting!. Seems many developers are still buying and just popping £100k on the price!!! so asking prices and still going up and away!!

All madness,

Lou

[Given Up]

House round the corner from me was for sale at £295k, sold January for £277k. Now on with the same agent for £385k but no photos and obviously quickly painting!. Seems many developers are still buying and just popping £100k on the price!!! so asking prices and still going up and away!!

All madness,

Lou

It may be nad but it's what's happening. We lost a place which we offered 5% under asking and the asking price was 20% over last price paid. Someone else offered full asking.

[iLegallyBlonde]

A little update

It has been withdrawn from the market

Probably pending investigation

[Time to raise the rents.]

A little update

It has been withdrawn from the market

Probably pending investigation

the question is whether you'd buy it back now if you had the chance

Edited June 3, 2006 by Time to raise the rents.

[Time to raise the rents.]

Well, would you?

Didn't think so. What kind of person are you then that gets joy from trying to stop someone else who took on risk & wants to benefit from it?

A lazy nutter IMO.

[IMupNorth]

A little update

It has been withdrawn from the market

Probably pending investigation

Probably a private sale going through, not via the agent. I still reckon your going to end up feeling pee'ed off, when you see how much it sells for. Time will tell, though.

[iLegallyBlonde]

Probably a private sale going through, not via the agent. I still reckon your going to end up feeling pee'ed off, when you see how much it sells for. Time will tell, though.

That would be very funny indeed as the vendor works for an EA, I shall be calling the neighbours to find out what's going on, lol

Well, would you?

Didn't think so. What kind of person are you then that gets joy from trying to stop someone else who took on risk & wants to benefit from it?

A lazy nutter IMO.

Well thank you for your opinion of my work ethic, don't remember asking for it but nevermind.

Would I buy it back, no I wouldn't, it's not a house that works with 4 children and in the wrong part of the UK.

They have taken a risk and I actually have no problem with the ladies who have done the work making a profit, what I objected to is being lied to, is that so hard to understand ?

I actually spoke today to another agent in the area about a house that needs work doing but ticks 90% of our boxes and the agent was good enough to say that it doing the work wouldn't actually add anything to the value just make it a nice place to live, at least she's being up front and knows her business.

[Charles_Darke]

Since you mentioned this. In doing more research on that, I discovered that NZ would, rather than consider it CG, consider profit from a sale to be normal income for a landlord and would probably tax it as straight income.

So the search is on for a better location. I'm told Spain is a good one, do you have any suggestions? I prefer English speaking if poss. Thanks.

If you have significant gains to shelter, then go find yourself a chartered tax adviser. I actually did something similar for a client who needed to shelter an 8 figure gain. We sent him on a nice little world trip and timed the sale so that the gain crystallised when he wasn't tax resident in any country.

[Guest muttley]

If you have significant gains to shelter, then go find yourself a chartered tax adviser. I actually did something similar for a client who needed to shelter an 8 figure gain. We sent him on a nice little world trip and timed the sale so that the gain crystallised when he wasn't tax resident in any country.

They can do that?

How would I go about finding a good chartered tax adviser?

[Time to raise the rents.]

If you have significant gains to shelter, then go find yourself a chartered tax adviser. I actually did something similar for a client who needed to shelter an 8 figure gain. We sent him on a nice little world trip and timed the sale so that the gain crystallised when he wasn't tax resident in any country.

Thanks. I've heard of this & even took the time to research it. After all allowances that apply to me on sale of my BTL's, the tax payment would be around 5% of the sale amounts if I am UK resident. That's more than the amount that it would cost to go on an extended trip, but I realised when researching this that selling up whilst outside the country would probably result in losing 5% or more on the sale due to complications related to being absent, so if/when I sell, I think I'll stay resident & pay the tax, it being the least complicated method that should get the best sale prices as I can concentrate on presentation of my places rather than being absent.

[Guest muttley]

Thanks. I've heard of this & even took the time to research it. After all allowances that apply to me on sale of my BTL's, the tax payment would be around 5% of the sale amounts if I am UK resident. That's more than the amount that it would cost to go on an extended trip, but I realised when researching this that selling up whilst outside the country would probably result in losing 5% or more on the sale due to complications related to being absent, so if/when I sell, I think I'll stay resident & pay the tax, it being the least complicated method that should get the best sale prices as I can concentrate on presentation of my places rather than being absent.

Am I right in thinking that you have to be out of the country for 18 months? In which case, I'm with TTRTR.

[Time to raise the rents.]

Am I right in thinking that you have to be out of the country for 18 months? In which case, I'm with TTRTR.

You'd be right if you said that the IR could change your tax status for up to 5 years if you made a large CG & they felt your non-residence was for tax evasion. They'd need a reason, but they have many they can use.

[Charles_Darke]

They can do that?

How would I go about finding a good chartered tax adviser?

Go to http://www.tax.org.uk/ and look for your nearest CTA in the member's directory. You need to remember that tax is a very specialised area so you need to find one that specialises in the area of tax you're interested in.

Thanks. I've heard of this & even took the time to research it. After all allowances that apply to me on sale of my BTL's, the tax payment would be around 5% of the sale amounts if I am UK resident. That's more than the amount that it would cost to go on an extended trip, but I realised when researching this that selling up whilst outside the country would probably result in losing 5% or more on the sale due to complications related to being absent, so if/when I sell, I think I'll stay resident & pay the tax, it being the least complicated method that should get the best sale prices as I can concentrate on presentation of my places rather than being absent.

Yes. It really depends on the size and nature of your assets. In the example I gave, it was a sale of shares (a business) and so it was relatively straight forward. But as in your case, there are often non-tax reasons which would dictate a course of action which might not be optimal from a tax perspective.