Buy/walk away?
Discussion
I prostate myself before the undoubted might of PH b2l insight, and that of other bricks and mortar property specialists here. I've been offered a two bed house in the East Midlands. It's from a b2l landlord seeking to get rid of some liability. The house is nice enough, no issues with that. I'm not looking at it from a rental perspective, rather, medium term capital value. Price is ok, where I'd be at if I negotiated off a few % points anyway.
Thing is, is there going to be a drop/correction in house prices over the next 6/12 months which would make waiting or declining the offer, the right thing to do? I'm not looking for overly technically precise and massive insight (although it's useful), at the expense of a valuable collection of gut instinct so please feel free to chip in if you feel you have something to offer.
Cheers!
Thing is, is there going to be a drop/correction in house prices over the next 6/12 months which would make waiting or declining the offer, the right thing to do? I'm not looking for overly technically precise and massive insight (although it's useful), at the expense of a valuable collection of gut instinct so please feel free to chip in if you feel you have something to offer.
Cheers!
Edited by Ginge R on Thursday 18th February 08:48
I suppose the two big questions to consider are
Are you buying at a discount now?
Who will you sell it to in the medium term to crystallise any capital gain?
For the latter point something fundamental needs to change. Interest rates increasing is unlikely to help homeownership, so you may be looking for another B2L buyer who will be looking for a discount.
The apparent discount in the FTSE is clear today and you know you can always liquidate quickly if you need some capital.
However if the property was in London, I think the answer would undoubtedly be yes. Demand massively exceeds supply and no new land is being created.
Are you buying at a discount now?
Who will you sell it to in the medium term to crystallise any capital gain?
For the latter point something fundamental needs to change. Interest rates increasing is unlikely to help homeownership, so you may be looking for another B2L buyer who will be looking for a discount.
The apparent discount in the FTSE is clear today and you know you can always liquidate quickly if you need some capital.
However if the property was in London, I think the answer would undoubtedly be yes. Demand massively exceeds supply and no new land is being created.
Thanks chaps. The vendor is honest about things.
I may let a family member live in it so I'm not overly worried about anything other than appreciated capital value in the event I sell it on. I'm happy with the CGT liability; currently, I'm not too worried about that, especially if it falls in price - hence my question about house price values of this type. I'm aware that they may be more susceptible than most right now, to values if b2l landlords looking to bang out start flooding the market.
Ta!
I may let a family member live in it so I'm not overly worried about anything other than appreciated capital value in the event I sell it on. I'm happy with the CGT liability; currently, I'm not too worried about that, especially if it falls in price - hence my question about house price values of this type. I'm aware that they may be more susceptible than most right now, to values if b2l landlords looking to bang out start flooding the market.
Ta!
Partly depends on the market the btl is aimed at.
Eg, I think core btl properties aimed at students will drop 5-10% medium term. There's lots of pod stuff arriving on the supply side in EM city centres and the 3% SDLT now has to be factored in.
Councils, since the article 4 changes a few years ago, are trying to move many typical student HMO areas back into family ownership but it may take a while more before the purchasers bite.
Eg, I think core btl properties aimed at students will drop 5-10% medium term. There's lots of pod stuff arriving on the supply side in EM city centres and the 3% SDLT now has to be factored in.
Councils, since the article 4 changes a few years ago, are trying to move many typical student HMO areas back into family ownership but it may take a while more before the purchasers bite.
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