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  • Property-a-holics

    Challenging a serious RICS down-valuation?

    Project fear at it again ! I live in Spain for 5 months a year and 90% of the UK people in our little community there are pensioners spending their Pensions in local shops and Restaurants which keeps the economy going and employs the local Spaniards. Any healthcare they would use there is small compared to the money they plough into the local economy so yes the Spanish would love our pensioners to keep spending all their retirement money in Spain . UK people needing Visas to go to Spain after Brexit ? Don’t make me laugh.
           One difference between Spain and the UK though is there is zero or very little social care in Spain . Families are expected to take on that role .That’s why once our pensioners who may have lived there for 20 years get major Chronic health problems many come back to the UK ( unless they are very well off ) where they get looked after by the NHS in hospital ( like in Spain ) but then by Local authorities and social services once out of hospital.
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    Dont want to sound harsh but i dont think any of those points are relevant to your current situation.


    Ultimately you have a property which is worth what someone is willing to pay, as of today for it either in cash or with a mortgage.

    A mortgage lender has told you a value and you disagree with it.

    Seems your options are to sell and get a higher price that you think you can get and prove them wrong. Or accept their lower offer.

    Items such as crossrail are just noise in this kind of situation. The uplift has been built in long ago. If your flat is so close to the city and the central line anyway i fail to see the real uplift of crossrail regardless. If you were in reading or shenfield i get it.

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    Taking account of your comments re one property, property value, income and age I’d be inclined to sell and buy somewhere cheaper outside London or rent myself.

    Have you considered your financial position if you attracted a tenant who had problems with the rent?
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    Yes, am looking at all the downsides. I think am less likely to attract such a tenant, but you never know. My plans involved having an ISA to cover voids etc

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    I had similar thing last year when the valuer did allow for a reception room as the 4th bedroom, even though there was a bed in it! It took a few emails, plans, proof that it had been a 4th bedroom etc but finally it was approved.  But my case was more on rental income than the actual value of the house.



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    Sheriff Fatman started out is business as a granny farmer, He was infamous for fifteen minutes And he appeared on Panorama.  Then he somehow got on board a Starship Enterprise Allowance Scheme With a Prince of Wales Award For pushing valium and amphetamines.

    Moving Up on Second Base With Nicholas Van what's His Face, At six foot six And 100 Tons, The undisputed King of the Slums. With more alias' than Klaus Barbie, Master Butcher of Leigh on Sea. Just about to take the stage, The one and only - hold the front page.

    Fatman's got something to sell To the Capital's homeless, A Crossroad's Motel For the No Fixed Abodeless. Where you can live life in style If you sleep in a closet And if you flash him a smile He'll take your teeth as deposit.

    There's bats in the belfrey, The windows are jammed, The toilet's ain't healthy He don't give a damn. Just chuckles and smiles Laughs like a madman, A born again Rachman, Here comes Sheriff Fatman

    With his valium, amphetamines, Sicknotes and his phoney prescriptions. Just when you thought it was safe to go back to the kitchen. Dead heads and cracked heads, Bunk beds and breakfasts, Wake up you sleepyheads. Ladies and Gentlemen, I give you, Sheriff Fatman.

    Mine is rental income, if you were able to challenge there is some hope

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    I think it is ok for you to wait for Crossrail for the potential uplift in price. Also, you can also take into account the rental profits you receive in the next few years until you sell.

    However, you should also be prepared for the potential downsides. Your flat and furniture will have 2/3 years of wear and tear. At worst, you could have horrible tenants which means you need to spend time and money to refurbish/refurnish the flat back to its current state (or sell at a reduced price as it is no longer sparkling). Also, you will potentially have more tax to pay (CGT and loss of current tax exemptions). And finally, the old chestnut that the market may not recover as much as you thought or as fast, due to political events outside our control (loss of s21, financial crash, anti-landlord regs like rent control).  Also, you need to factor in the loss of what you could have made from the sales proceeds now (e.g. invest in a nicer place outside of London and not pay rent, or perhaps investing in something with a higher/reliable rate of return compared to property).

    If it is any help, I have just agreed a sale of a flat in Shoreditch/Bethnal Green, so also next to two Crossrail stations. Like you, I hemmed and hawed over whether to wait, but decided to sell at a price about 8% less than what I could have achieved in 2016 (so about 2014/15 prices). I figured the rental profit I received in the past 3 years basically made up for it anyway. I also realised that prices would need to recover significantly in the next few years to offset (a) the extra CGT tax I would have to pay if I didn’t sell now (b) refreshing it for sale after 2/3 years of tenants © maintenance and service charges and running costs (d) hassle of being a landlord and loss of using the funds for alternative investments/uses.

    I calculated that if prices did not rise at all, then I would basically be “paying” to rent out the property for the next few years.  So for me, selling now at a slightly “reduced” price is better than a small chance of profit in the future. I also figured it is all mindset. If you can find a better use for the money now, then it is better to sell. “Better” can mean better return as well as better ability to seize opportunities and do things that improve your life in non-financial ways.

    But I realise we are not in the same position, as this property is your sole major “asset”, so whatever you do with it has greater significance to you. If you are happy to risk the downsides, then there is no problem in waiting for a potential future uplift in price.

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    Thanks Benjaminagain

    I have really thought through all the above. Am letting only partially furnished, poss unfurnished. At my rental price point I would hope to attract the kind of slightly more mature tenants, typically on 2-year assignments in the City financial sector etc, poss foreigners etc. But, yes, there is a risk I could have to spend a bit to refresh when I come back to sell. Am talking to my accountant re the CGT aspect. Of course the market may not recover in the time frame I'm thinking of, but there is always Crossrail. Are you much younger than me, and still earning? Still have time to, say, flip some properties outside of London etc? It's because I can't do any of this that I am so anxious not to lose out. But, yes, I could be wrong

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    Yes, if you keep your property, then your number one key task is to choose your tenant carefully, as they will make and break your future selling plans. I was lucky with the tenants of the flat I am now selling because they are minimalist nomads and they allowed me to do lots of viewings during final three months of tenancy, meaning no voids before selling.

    I also realised I would have time to sell it myself rather than through an agent, so selling now meant I could save myself agents fees (compared to selling in the future, when I may not have time and have to rely on agents). Therefore, future price increases would have to increase enough to cover agents fees too. I think you will find that the increase in CGT you will pay if you don't sell before 4 April 2020 will be quite a lot and may equate to 1 year's rental profit. Hence my realisation that if I don't sell now, I am literally "paying" to rent it out and ultimately, no better than gambling (i.e. speculating) rather than "investing".

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