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Spring In The Air

Who Needs First Time Buyers

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Here's one for you. Just sold a big Victorian place overlooking the green for £895k. Owners are elderly - the man is 77 and his wife about the same I would guess. Place is getting too much for them so they are buying 3 (yes 3, plenty commission!) flats in a new build we're selling nearby. Ground floor one for them and two for investment. They'll get a grand a month on the investment ones and are paying just shy of 250k for the other two. So, not a fantastic return but 24k a year will supplement the pension okay. They're considering putting the two investment properties in their sons names, looking into the inheritance tax situation with their accountant now.

So a great deal all round. And not a first time buyer in sight as the big house has been bought by a builder to convert into flats. And most of those will be bought by investors.

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Here's one for you. Just sold a big Victorian place overlooking the green for £895k. Owners are elderly - the man is 77 and his wife about the same I would guess. Place is getting too much for them so they are buying 3 (yes 3, plenty commission!) flats in a new build we're selling nearby. Ground floor one for them and two for investment. They'll get a grand a month on the investment ones and are paying just shy of 250k for the other two. So, not a fantastic return but 24k a year will supplement the pension okay. They're considering putting the two investment properties in their sons names, looking into the inheritance tax situation with their accountant now.

So a great deal all round. And not a first time buyer in sight as the big house has been bought by a builder to convert into flats. And most of those will be bought by investors.

INVESTMENT + ELDERLEY = B0LLOX

Why not just put the 850K in the bank. Surely that will give them a better monthly payment than spent most of it.

Great deal all round means you make lot of money out of them.

Hope your happy ripping off the old - you scumbag!

TB

Edited by teddyboy

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Except it's not a grand a month income, its a grand less agent fees, repairs and void periods. Probably works out at less than £700 pcm net or 3.4% net yield. Nationwide are currently paying 4.7% on some of their savings products.

So what happens to the market when all of the investors work out they are loosing money? That's who needs FTB's.

Still, as long as you get your 4x commission that's ok, isn't it?

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So, not a fantastic return

More like an absolutely appalling return if they put all the 895,000 pounds into buying those flats: that would be just over 2.6%, even before voids, maintenance and price drops are taken into account.

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Here's one for you. Just sold a big Victorian place overlooking the green for £895k. Owners are elderly - the man is 77 and his wife about the same I would guess. Place is getting too much for them so they are buying 3 (yes 3, plenty commission!) flats in a new build we're selling nearby. Ground floor one for them and two for investment. They'll get a grand a month on the investment ones and are paying just shy of 250k for the other two. So, not a fantastic return but 24k a year will supplement the pension okay. They're considering putting the two investment properties in their sons names, looking into the inheritance tax situation with their accountant now.

So a great deal all round. And not a first time buyer in sight as the big house has been bought by a builder to convert into flats. And most of those will be bought by investors.

Have first time buyers ever bought big old victorian houses? I'm thinking no. So why were you looking for them? Is it because a lot of them are easy to fleece, like the old?

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INVESTMENT + ELDERLEY = B0LLOX

Why not just put the 850K in the bank. Surely that will give them a better monthly payment than spent most of it.

Great deal all round means you make lot of money out of them.

Hope your happy ripping off the old - you scumbag!

TB

SpringIsInTheAir's original post was a bit ambiguous, but I presume that he's saying that they will get a grand a month from each of two properties, each of which cost £250K. That's a gross return of 4.8%. Put fees, maintenance, voids on top of that and I'd bet 4% is an optimisitic estimate of their real return. Then we need to consider whether new build city living flats are likely to hold their value, appreciate, or lose value. I wonder which one it is.

Perhaps SpringIsInTheAir could try stealing some candy from young children on the way home.

Billy Shears

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Here's one for you. Just sold a big Victorian place overlooking the green for £895k. Owners are elderly - the man is 77 and his wife about the same I would guess. Place is getting too much for them so they are buying 3 (yes 3, plenty commission!) flats in a new build we're selling nearby. Ground floor one for them and two for investment. They'll get a grand a month on the investment ones and are paying just shy of 250k for the other two. So, not a fantastic return but 24k a year will supplement the pension okay. They're considering putting the two investment properties in their sons names, looking into the inheritance tax situation with their accountant now. So a great deal all round. And not a first time buyer in sight as the big house has been bought by a builder to convert into flats. And most of those will be bought by investors.

Not unusual, I would suggest, from personal experience — In the new(ish) build I live in the flat next door to me is owned and rented out by an elderly retired couple who themselves live in another flat they own on the ground floor, having sold their country pile to live in the city closer to their grandkids.

It says a lot about the usual suspects on here that posts describing circumstances such as these are met with such inarticulate derision.

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Here's one for you. Just sold a big Victorian place overlooking the green for £895k. Owners are elderly - the man is 77 and his wife about the same I would guess. Place is getting too much for them so they are buying 3 (yes 3, plenty commission!) flats in a new build we're selling nearby. Ground floor one for them and two for investment. They'll get a grand a month on the investment ones and are paying just shy of 250k for the other two. So, not a fantastic return but 24k a year will supplement the pension okay. They're considering putting the two investment properties in their sons names, looking into the inheritance tax situation with their accountant now.

So a great deal all round. And not a first time buyer in sight as the big house has been bought by a builder to convert into flats. And most of those will be bought by investors.

Why not invest it, receive between 5-6% return, 45-55K (ish) with no hastle? Take 30k to live on (including rent) and still see capital growth even if they do not push the envelope and go for more exotic investments?

You do raise an interesting point re the need for FTBs, could you pm me when you`re free? Great discussion point for an article...

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What a funny bunch you are. And a bit thick if you don't mind my saying so. You obviously missed the bit where I mentioned they are looking into effectively giving their sons the investment flats. If they live longer than 7 years it will avoid inheritance tax. And you get your knickers in a twist over maintenance charges and so on. You obviously think the old boy is as daft as you are. Do you actually think he can't subtract an agent's fee and a maintenance fee from the rent? Anyway, I have included those in the rent figure - I'm giving him a year free of charges for both flats seeing as I'm doing rather well out of the deal! He sees it as an excellent way to supplement his pension and pass on most of his wealth to his children. And, if he and his wife live another 10 years, the flats may well be worth 350k each by then.

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Not unusual, I would suggest, from personal experience — In the new(ish) build I live in the flat next door to me is owned and rented out by an elderly retired couple who themselves live in another flat they own on the ground floor, having sold their country pile to live in the city closer to their grandkids.

It says a lot about the usual suspects on here that posts describing circumstances such as these are met with such inarticulate derision.

Do they make a decent return out of it, or were they sold a pup like SpringIsInTheAir's "clients"?

Billy Shears

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Why not just put the 850K in the bank. Surely that will give them a better monthly payment than spent most of it.

Perhaps they've realised that the HPC will drive the value of their estate below the inheritcance tax threshold.

Can they legally put the properties in their sons names? Surely that's tantamount to gifting well above the taxable level? To be hoped they live another seven years!

Edited by Bingley Bloke

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Do they make a decent return out of it . . ?

From what I can gather, although they're probably not bothered if they are or not — like pretty much everyone else in this building I speak to they made a killing selling their old place.

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Here's one for you. Just sold a big Victorian place overlooking the green for £895k. Owners are elderly - the man is 77 and his wife about the same I would guess. Place is getting too much for them so they are buying 3 (yes 3, plenty commission!) flats in a new build we're selling nearby. Ground floor one for them and two for investment. They'll get a grand a month on the investment ones and are paying just shy of 250k for the other two. So, not a fantastic return but 24k a year will supplement the pension okay. They're considering putting the two investment properties in their sons names, looking into the inheritance tax situation with their accountant now.

So a great deal all round. And not a first time buyer in sight as the big house has been bought by a builder to convert into flats. And most of those will be bought by investors.

tw-a-t.

Edited by Landagan

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And, if he and his wife live another 10 years, the flats may well be worth 350k each by then.

And they may well be "worth" 150k each by then - who know's what the future holds. Personally I'd look at property as being a rather unpredictable investment vehicle for them. The major benefit of course is the IHT avoidance after 7 years

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Who needs FTB's?

You do or you'd not be on the forum - muppet.

An estate agent saying that the market does not need FTBs is like a wheat farmer saying that he doesn't need seeds ever again because his crop is already growing.

Billy Shears

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He sees it as an excellent way to supplement his pension and pass on most of his wealth to his children. And, if he and his wife live another 10 years, the flats may well be worth 350k each by then.

TBH, tranferring your 'estate' at the age of 77 sounds like its leaving it a bit late to me.

7 years is a long time...

Surprised this guy isnt dumping in great wads of cash into his SIPP.

Also, unless the stamp duty thresholds change I personally would not be optimistic about sub-250k places inflating enough in value in the next 5 years to push them through the 3% threshold and be saleable.

For this reason I am advising my parents-in-law to sell their inherited flat (valued at 250k).

Speaking of inheritance I read about a good strategy for elderly couples. When one dies they should transfer the inheritance cap (£262k?) to one of their children and the rest goes to the remaining partner.

That way they swiftly move £262k of assets tax-free.

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An estate agent saying that the market does not need FTBs is like a wheat farmer saying that he doesn't need seeds ever again because his crop is already growing.

Billy Shears

Like yin without yang.

Night without day.

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An estate agent saying that the market does not need FTBs is like a wheat farmer saying that he doesn't need seeds ever again because his crop is already growing.

Billy Shears

If YOU say so. But, what do you KNOW about the property market? There are a few FTBs about at the moment. About 15 to 18 months ago we had a period of about 4 months where every flat we sold went to an investor. Something you guys on here will not and do not realise is the fact that the market has changed enormously over the last 5 years. 5 years ago 1 flat in 5 was a BTL. Now it is 2 to 3 in 5 with another 1 or 2 sales coming from people downsizing.

Actually, let's take your analogy a bit further. The farmer has his crop growing and some of the crop becomes big and valuable. He realises he can split some of the large wheat plants and make two smaller wheat plants out of one large one. He no longer needs seeds.

Edited by Spring In The Air

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What a funny bunch you are. And a bit thick if you don't mind my saying so. You obviously missed the bit where I mentioned they are looking into effectively giving their sons the investment flats. If they live longer than 7 years it will avoid inheritance tax. And you get your knickers in a twist over maintenance charges and so on. You obviously think the old boy is as daft as you are. Do you actually think he can't subtract an agent's fee and a maintenance fee from the rent? Anyway, I have included those in the rent figure - I'm giving him a year free of charges for both flats seeing as I'm doing rather well out of the deal! He sees it as an excellent way to supplement his pension and pass on most of his wealth to his children. And, if he and his wife live another 10 years, the flats may well be worth 350k each by then.

Do this old couple not deserve your privacy on the matter?

You obviously feel you have ripped them off or you wouldn't come on here gloating about it.

I would imagine the story is either made up, or your excitement is getting the better of you.

Either way you are a tw-at.

.

Edited by Landagan

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If YOU say so. But, what do you KNOW about the property market? There are a few FTBs about at the moment. About 15 to 18 months ago we had a period of about 4 months where every flat we sold went to an investor. Something you guys on here will not and do not realise is the fact that the market has changed enormously over the last 5 years. 5 years ago 1 flat in 5 was a BTL. Now it is 2 to 3 in 5 with another 1 or 2 sales coming from people downsizing.

Actually, let's take your analogy a bit further. The farmer has his crop growing and some of the crop becomes big and valuable. He realises he can split some of the large wheat plants and make two smaller wheat plants out of one large one. He no longer needs seeds.

Hmm but if he keeps splitting the crop some of the smaller wheat stalks (they are stalks not plants!) don't form wheat heads?!?!

What is driving this change in the market?

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If YOU say so. But, what do you KNOW about the property market? There are a few FTBs about at the moment. About 15 to 18 months ago we had a period of about 4 months where every flat we sold went to an investor. Something you guys on here will not and do not realise is the fact that the market has changed enormously over the last 5 years.

Out of interest, what kind of people are these investors? Or is it too diverse to label?

I've always wondered where all the money comes from for these investors...surely not that many people earn 6 figure salaries?

The idea of a 77 year old having to worry about BTL flats sounds a bit sad to me. I think I'd do something INSANE with the money if I was that age, like drink vintage wines from the 19th century. Why not? You cant take it with you.

Edited by DonnieDarker

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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