Detached Victorian renovation, London.
Discussion
Harry Flashman said:
We should! When are you guys around?
Realistically not until mid-September. Need to fit in a su.mer holiday then taking the SL down to Cannes for a few days at the beginning of September.If you're in this mock of the woods before drop me a txt as we might be around on the odd day.
Hope all the Flashes are well.
AlmostUseful and Peanut Gallery said:
Harry Flashman said:
Well, for a start, the wheels really are too big.
1. They’re not.2. They’re still not.
3. See 1.
4. See 2.
I dof my cap to the man maths involved in getting a TV the perfect size for the room, it is very much a necessity not a luxury ..
and of course far cheaper than tyres for your car, extended over the life of a TV, and TVs do not get hit by potholes.Thank you!
I've not read the whole thread, but this is a seriously impressive project executed extremely well and in good time.
I understand you may not want to say, but I'd be interested to know the basic figures, i.e. acquisition cost and refurbishment cost to date. And although I realise this has been done as a home to live in for a long time what do you think the house is worth now?
I understand you may not want to say, but I'd be interested to know the basic figures, i.e. acquisition cost and refurbishment cost to date. And although I realise this has been done as a home to live in for a long time what do you think the house is worth now?
Hi, I'm perfectly happy to answer these questions, and have literally just been through the spreadsheet updating after the front driveway, garden planting and air conditioning costs.
House was bought for £1,450,000
Stamp duty was £88,750
Conveyancing costs: £2000
Renovation costs to date: £228,000
So a grand total of £1,768,750. I expect to spend another £10k soon on odds and sods like extra aircon, fast charger for an electrical car etc. However, I expect another £50k in the next 10 years on roof and exterior decoration work: this house will probably not leave us much change from £1.825m, but it will be completely done at that point.
House is just shy of 4000 square feet internally, 5000 square foot rear garden. 5 beds (took it down from 6 to make a large dressing room), 4 baths +2 wcs, utility, garage, 3 receptions, and renovated and decorated to a pretty high standard, but not to absolute prime London spec. It's in a nice street in SW2, which is very much sub-prime London - this house in Balham is 50% more expensive, and in Clapham at least double.
A year back, the estate agent said she would expect to get £2.1m for it once the front was done. Today, a smaller one on the next street, unrenovated (but perfectly habitable, unlike the way ours was) and needing modernisation is up for £1.8m, so you'd hope for somewhere in between.
I'd be disappointed if we have not broken even, but it's immaterial as the hope is that this is our long-term home: in fact I have designed the electrics and plumbing so that it could very easily be broken into three large flats when we come to downsize, hopefully far in the future. These big London houses are not really selling these days as the stamp duty is so immense - at a 2m sale price, a buyer would be on for £153,750 in stamp duty. That's a loft conversion and proper extension on your current house: no wonder people are renovating and improving rather than moving. The new taxes have killed this market stone dead.
I am actually pretty pleased with what we have managed to do this renovation for - that has been some ruthless project management, a VAT rate of 5% on much of it, and sourcing absolutely everything myself. I know people who have spent similar money in this part of London on far less. There are plenty of £60k kitchens around here, for example. Ours was more like £20k, and for my money better quality, with solid wood carcasses etc. You can save a lot if you really shop around and have time to wait for things - we were not living in it, so had that luxury.
I am also very aware that the sort of money we spent buys you an absolutely amazing house outside of London, and the renovation costs alone buy great homes all over the country: so I know how ridiculous some of those numbers must sound, and am aware that we are lucky to have this home. I do feel that buying this house was a risk, though. With Brexit, remote working making commutes less relevant, and a possible decline of London as a world city/financial centre, this could have been an expensive mistake, long term. At least all our friends will be trapped here too!
House was bought for £1,450,000
Stamp duty was £88,750
Conveyancing costs: £2000
Renovation costs to date: £228,000
So a grand total of £1,768,750. I expect to spend another £10k soon on odds and sods like extra aircon, fast charger for an electrical car etc. However, I expect another £50k in the next 10 years on roof and exterior decoration work: this house will probably not leave us much change from £1.825m, but it will be completely done at that point.
House is just shy of 4000 square feet internally, 5000 square foot rear garden. 5 beds (took it down from 6 to make a large dressing room), 4 baths +2 wcs, utility, garage, 3 receptions, and renovated and decorated to a pretty high standard, but not to absolute prime London spec. It's in a nice street in SW2, which is very much sub-prime London - this house in Balham is 50% more expensive, and in Clapham at least double.
A year back, the estate agent said she would expect to get £2.1m for it once the front was done. Today, a smaller one on the next street, unrenovated (but perfectly habitable, unlike the way ours was) and needing modernisation is up for £1.8m, so you'd hope for somewhere in between.
I'd be disappointed if we have not broken even, but it's immaterial as the hope is that this is our long-term home: in fact I have designed the electrics and plumbing so that it could very easily be broken into three large flats when we come to downsize, hopefully far in the future. These big London houses are not really selling these days as the stamp duty is so immense - at a 2m sale price, a buyer would be on for £153,750 in stamp duty. That's a loft conversion and proper extension on your current house: no wonder people are renovating and improving rather than moving. The new taxes have killed this market stone dead.
I am actually pretty pleased with what we have managed to do this renovation for - that has been some ruthless project management, a VAT rate of 5% on much of it, and sourcing absolutely everything myself. I know people who have spent similar money in this part of London on far less. There are plenty of £60k kitchens around here, for example. Ours was more like £20k, and for my money better quality, with solid wood carcasses etc. You can save a lot if you really shop around and have time to wait for things - we were not living in it, so had that luxury.
I am also very aware that the sort of money we spent buys you an absolutely amazing house outside of London, and the renovation costs alone buy great homes all over the country: so I know how ridiculous some of those numbers must sound, and am aware that we are lucky to have this home. I do feel that buying this house was a risk, though. With Brexit, remote working making commutes less relevant, and a possible decline of London as a world city/financial centre, this could have been an expensive mistake, long term. At least all our friends will be trapped here too!
Edited by Harry Flashman on Monday 12th August 21:04
Thanks very much for such a comprehensive reply. We did a similar (though considerably smaller) project last year, and it's interesting to compare notes.
I was interested to read your comment that stamp duty’s killed the market at that level. I’ve heard estate agents say the same, but I've often thought that buyers would just tend to look at the overall cost of the acquisition rather than its individual components.
So in your case let’s say you’d budgeted, say, £1.55m. Your purchase costs were £1.45m + £88,750 + £2,000 = £1,540,750, so within budget.
But if the stamp duty had been just, say, £8,750 you should, in theory, have been willing to pay an additional £80,000 on the purchase price, i.e. the price would have been £1.53m rather than £1.45m. Your net outlay would still have been the same, and within your budget, but the seller would have been £80k better off.
I appreciate that the stamp duty can't be factored into the equation for mortgage purposes, but I'm guessing that at this level you're hardly likely to be looking to borrow the absolute maximum anyway.
I can well understand that on principle you would rather not pay such a hefty sum in tax, but in purely financial terms why should it matter whether you're paying that £80k by way of stamp duty or by way of an inflated price to the seller, when your net outlay's the same either way?
I hope you don’t mind me asking, but it’s something I’ve often wondered about. Unfortunately, it’s not likely to be a significant worry to me!
I was interested to read your comment that stamp duty’s killed the market at that level. I’ve heard estate agents say the same, but I've often thought that buyers would just tend to look at the overall cost of the acquisition rather than its individual components.
So in your case let’s say you’d budgeted, say, £1.55m. Your purchase costs were £1.45m + £88,750 + £2,000 = £1,540,750, so within budget.
But if the stamp duty had been just, say, £8,750 you should, in theory, have been willing to pay an additional £80,000 on the purchase price, i.e. the price would have been £1.53m rather than £1.45m. Your net outlay would still have been the same, and within your budget, but the seller would have been £80k better off.
I appreciate that the stamp duty can't be factored into the equation for mortgage purposes, but I'm guessing that at this level you're hardly likely to be looking to borrow the absolute maximum anyway.
I can well understand that on principle you would rather not pay such a hefty sum in tax, but in purely financial terms why should it matter whether you're paying that £80k by way of stamp duty or by way of an inflated price to the seller, when your net outlay's the same either way?
I hope you don’t mind me asking, but it’s something I’ve often wondered about. Unfortunately, it’s not likely to be a significant worry to me!
Regarding the 5% VAT, were you able to get that as the property wasn't lived in for 2 years prior to your purchasing it?
We're currently renovating a place and that VAT saving could be handy! I'm pretty sure it was empty for at least 2 years before we got it. Not sure who we find out for sure though!
We're currently renovating a place and that VAT saving could be handy! I'm pretty sure it was empty for at least 2 years before we got it. Not sure who we find out for sure though!
king hell that would really, really stick in my craw. Stamp duty is a greed tax, nothing more.mcg_ said:
Regarding the 5% VAT, were you able to get that as the property wasn't lived in for 2 years prior to your purchasing it?
We're currently renovating a place and that VAT saving could be handy! I'm pretty sure it was empty for at least 2 years before we got it. Not sure who we find out for sure though!
Exactly. Read VAT notice 708, and use a VAT registered builder. They need to buy everything too - so you need one who will cooperate. My guys were great, not all can be bothered. We made it a term of the tender when auditioning building companies.We're currently renovating a place and that VAT saving could be handy! I'm pretty sure it was empty for at least 2 years before we got it. Not sure who we find out for sure though!
You also need to not be living in it. If you have moved in and registered yourselves there, it may be game over. The VAT document details all of this.
As for proof on non-occupancy, find your local council's empty homes officer. There is such a thing, to track unused properties.
Edited by Harry Flashman on Tuesday 13th August 07:45
Pro Bono said:
I've often thought that buyers would just tend to look at the overall cost of the acquisition rather than its individual components.
So in your case let’s say you’d budgeted, say, £1.55m. Your purchase costs were £1.45m + £88,750 + £2,000 = £1,540,750, so within budget.
But if the stamp duty had been just, say, £8,750 you should, in theory, have been willing to pay an additional £80,000 on the purchase price, i.e. the price would have been £1.53m rather than £1.45m. Your net outlay would still have been the same, and within your budget, but the seller would have been £80k better off.
You are quite correct, I think, on the pricing and the efficiency of the market in this respect, but you are missing a big point, this is treating the cost as a singular event.So in your case let’s say you’d budgeted, say, £1.55m. Your purchase costs were £1.45m + £88,750 + £2,000 = £1,540,750, so within budget.
But if the stamp duty had been just, say, £8,750 you should, in theory, have been willing to pay an additional £80,000 on the purchase price, i.e. the price would have been £1.53m rather than £1.45m. Your net outlay would still have been the same, and within your budget, but the seller would have been £80k better off.
The issue as I see it is that if you are trying to (relatively) marginally move up or down in size the stamp becomes a huge issue. I believe i have made a similar decision to Harry in selling a finished home and buying a project at broadly similar price points to Harry. The difference in the two properties values was about £150k. The issue was it still cost me around £100k in moving costs. You have to be very sure of the move, and/or try to spot some value and in some way arb the market to make up for the stamp cost.
This is what freezes up the market in respect to stamp duty.
gibbon said:
Pro Bono said:
I've often thought that buyers would just tend to look at the overall cost of the acquisition rather than its individual components.
So in your case let’s say you’d budgeted, say, £1.55m. Your purchase costs were £1.45m + £88,750 + £2,000 = £1,540,750, so within budget.
But if the stamp duty had been just, say, £8,750 you should, in theory, have been willing to pay an additional £80,000 on the purchase price, i.e. the price would have been £1.53m rather than £1.45m. Your net outlay would still have been the same, and within your budget, but the seller would have been £80k better off.
You are quite correct, I think, on the pricing and the efficiency of the market in this respect, but you are missing a big point, this is treating the cost as a singular event.So in your case let’s say you’d budgeted, say, £1.55m. Your purchase costs were £1.45m + £88,750 + £2,000 = £1,540,750, so within budget.
But if the stamp duty had been just, say, £8,750 you should, in theory, have been willing to pay an additional £80,000 on the purchase price, i.e. the price would have been £1.53m rather than £1.45m. Your net outlay would still have been the same, and within your budget, but the seller would have been £80k better off.
The issue as I see it is that if you are trying to (relatively) marginally move up or down in size the stamp becomes a huge issue. I believe i have made a similar decision to Harry in selling a finished home and buying a project at broadly similar price points to Harry. The difference in the two properties values was about £150k. The issue was it still cost me around £100k in moving costs. You have to be very sure of the move, and/or try to spot some value and in some way arb the market to make up for the stamp cost.
This is what freezes up the market in respect to stamp duty.
The execution is so short-sighted, though I suppose at least it incentivises the conversion of large houses into flats that provide a better match to the accommodation that's required by society. But it's economic vandalism as it stands.
gibbon said:
You are quite correct, I think, on the pricing and the efficiency of the market in this respect, but you are missing a big point, this is treating the cost as a singular event.
The issue as I see it is that if you are trying to (relatively) marginally move up or down in size the stamp becomes a huge issue. I believe i have made a similar decision to Harry in selling a finished home and buying a project at broadly similar price points to Harry. The difference in the two properties values was about £150k. The issue was it still cost me around £100k in moving costs. You have to be very sure of the move, and/or try to spot some value and in some way arb the market to make up for the stamp cost.
This is what freezes up the market in respect to stamp duty.
I think we could also consider different type of buyers, such as mini-developers. For instance, buying a £2m property and you would pay £213k stamp duty (assuming you already have another property). This is a huge cost for a developer type, they would have to increase the price for potential buyers or making drastic reductions to renovation costs and etc... I have seen a few potential clients/developers suspended their investments/projects due to this and I think this is a huge contribution why the market (London) is quite depressed at the moment.The issue as I see it is that if you are trying to (relatively) marginally move up or down in size the stamp becomes a huge issue. I believe i have made a similar decision to Harry in selling a finished home and buying a project at broadly similar price points to Harry. The difference in the two properties values was about £150k. The issue was it still cost me around £100k in moving costs. You have to be very sure of the move, and/or try to spot some value and in some way arb the market to make up for the stamp cost.
This is what freezes up the market in respect to stamp duty.
Harry Flashman said:
Exactly. Read VAT notice 708, and use a VAT registered builder. They need to buy everything too - so you need one who will cooperate. My guys were great, not all can be bothered. We made it a term of the tender when auditioning building companies.
You also need to not be living in it. If you have moved in and registered yourselves there, it may be game over. The VAT document details all of this.
As for proof on non-occupancy, find your local council's empty homes officer. There is such a thing, to track unused properties.
Ah, I think we might be out then! I'm buying all materials myself and doing most myself. We're also living downstairs whilst completing the upstairs first. You also need to not be living in it. If you have moved in and registered yourselves there, it may be game over. The VAT document details all of this.
As for proof on non-occupancy, find your local council's empty homes officer. There is such a thing, to track unused properties.
Edited by Harry Flashman on Tuesday 13th August 07:45
Would have been handy though, as it's not cheap! 2x bathrooms with fired earth marble soon adds up, just 15% back on that would have been nice!
Staying on the topic of stamp duty for a moment, I really can't help but think that stamp duty, much like IHT, really is a tax too far.
I'm consistently amazed that there's not an uproar over it. At least Turpin has the good grace to wear a mask
I'm consistently amazed that there's not an uproar over it. At least Turpin has the good grace to wear a mask
Edited by TheJimi on Wednesday 14th August 10:41
TheJimi said:
Staying on the topic of stamp duty for a moment, I really can't help but think that stamp duty, much like IHT, really is a tax too far.
I'm consistently amazed that there's not an uproar over. At least Turpin has the good grace to wear a mask
I’m just about to pay £30k. Not on Harry levels but still painful I'm consistently amazed that there's not an uproar over. At least Turpin has the good grace to wear a mask
TheJimi said:
Staying on the topic of stamp duty for a moment, I really can't help but think that stamp duty, much like IHT, really is a tax too far.
I'm consistently amazed that there's not an uproar over it. At least Turpin has the good grace to wear a mask
Better than an increase in income tax to raise the same tax revenues. Buying an expensive house is a choice not everyone wants to make.I'm consistently amazed that there's not an uproar over it. At least Turpin has the good grace to wear a mask
Edited by TheJimi on Wednesday 14th August 10:41
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