As London Buyer’s Agents we were interested to read a recent interview with The Telegraph (http://tgr.ph/n7WTGf) where Eric Pickles, the secretary of state for communities and local government has said that it would be a, “very big mistake”, to go ahead with any form of the Liberal Democrat’s proposed “mansion tax” on properties worth over £1 million.

A 1% annual tax applied to houses worth more than £1 million was first proposed at the Liberal Democrat party conference of 2009. The suggested threshold was later increased to properties worth more than £2 million, and this year the policy was refined further, with the Liberal Democrat Party suggesting that there should be a levy of 1% on capital gains tax from the sale of a property after the first £1million. .

This is an obvious attempt to make owners of high value property in the UK, whether British or foreign citizens, to pay up in order to share the burden caused by the national deficit, a questionable source of revenue when you stop to consider that an overhaul of the current council tax system has been estimated to cost upwards of £250million.

Although unlikely to temper overseas buyers’ zeal for good quality, high-end property in prime central London, a “mansion tax” is likely to dissuade middle-class British buyers from progressing up the property ladder. They are instead likely to decide to remain where they are, which would decrease the amount of property below £1million that comes onto the market, negatively affecting both ends of the market.

It is also possible for an astute property investor to buy property below the £1 million mark, and develop the property sufficiently after its official government valuation and still benefit from their investment, which makes the £1 million threshold seem rather arbitrary indeed.

There would be an uneven burden on home-owners in London and the South-East where the value of property continues to increase despite the recession. Eric Pickles rightly said last week that it would be, “imposing taxation on the back of changes in property value”. Following Eric Pickle’s interview it seems unlikely for now that any version of the “mansion tax” is likely to be passed under this coalition government, however much the Liberal Democrats want to replace the 50p tax rate for high earners with a tax for so-called “unearned wealth”. This would negatively affect people who are house-rich, but cash-poor, and whose life earnings have been channelled into their property, with a view of it being a retirement safety net, or a legacy for their children. Many people view their home as an investment, and I don’t believe that people should be taxed for choosing to invest their money well, and having their savings in bricks and mortar.

Technorati Tags: Buyers agents, government policy, Hackney house prices, House prices in London, London property, mansion tax, Property News, recession

Tags: Buyers agents, government policy, Hackney house prices, House prices in London, London property, mansion tax, Property News, recession

Musings of a London Property Search Agent

There is no doubt that this is the best time to buy at auction since a brief period during the summer of 2004, when for about 6 weeks, investors looked nervous and auction rooms were half-full.  Auction rooms are not half-full now and they haven’t been since the beginning of the credit crunch in my view, as this is the first time in ages it’s made sense to buy at auction.  But prices aren’t ridiculously low, just low enough to tempt buyers in, which bodes well for the London property market in general.  Prices are roughly 20% below the price they would be in an estate agent’s window – more if there is a great deal of refurbishment to be done, so there is a margin to be made for buy-to-letters, investors and developers as well as owner-occupiers, willing to pay for the necessary work to bring them up to standard.

At Allsops October auction, all but 5 of the 689 lots have guide prices below £500,000.  Some of the goodies include a 2 bed 3rd floor flat in a Peabody building (period housing association accommodation) near Russell Square with a guide of £280K.  It wasn’t long ago that 1 beds in blocks like this would make £280 at auction and £350,000 through an estate agent, once refurbished. 

For noise tolerant country dwellers, there is a good-looking four bedroom detached house sitting in just over a quarter of an acre but it’s 33m from the M4.  But beggars can’t be choosers and you’d be in good company.  The house is situated in a little hamlet, staggering distance from a pub (we seem to recall) and 5 minutes or so from the 18th Century mansion currently on sale for a cool £4.5 million through Allen & Crane Estates.  Admittedly it’s got 18 bedrooms, a listed dovecote and an all weather dressage court plus a number of other cottages and flats, but then it’s at least £4.2 million more.  The house at auction, lot 267a has a guide of £260,000 – £280,000 and boasts a downstairs cloakroom, separate utility room and 3 reception rooms.  For dressage, you’ll have to chat up your neighbour.

Foodie self-builders may be interested in a pretty hideous 60s bungalow being sold by The Highways Agency, striking distance from The Fat Duck, Heston Blumenthall’s gastronomic paradise.  60s bungalows are sometimes riddled with asbestos so a survey would be a smart move, even for the self-builder wishing to start again because getting rid of asbestos can be expensive.  The bungalow has a guide of £210,000 – £230,000 and may also be suitable for extending up and out, subject to planning.

Lot 77, 176 Elsey Road Battersea is an end of terrace 2 bedroom Victorian cottage on the Shaftesbury Estate which needs a great deal of work but presents a fabulous opportunity for enterprising first or second time buyers.  It is priced at £265,000 – £285,000 but expect to pay more.

Lastly, lot 315 is a new-build 2 bedroom detached house in Highbury, in a quiet residential street which has been doing the rounds at the auctions of late and failed to sell.  Allsops have priced it at £225,000 to £250,000 and depending on the finish, you would struggle to build it for that.  Put into context, Foxtons have a one bed flat and 3 bed maisonette on the same road for £299,950 and £625,000 respectively.  The difference is, this property has gone into receivership.  This London Property Finder can find you a good property at a good price

www.allsop.co.uk

www.allen-crane.com

www.foxtons.co.uk

Technorati Tags: bargain property, Battersea bargain property, bray property, Highbury bargain house, london property bargains, London Property Finder, london property market news, property auction, property market news, Property News, self-build bargain, the london property market

Tags: bargain property, Battersea bargain property, bray property, Highbury bargain house, london property bargains, London Property Finder, london property market news, property auction, property market news, Property News, self-build bargain, the london property market

Musings of a London Property Finder

The Allsops auction catalogue is out and there are plenty of goodies at every budget except £750K and over.  In fact there are is only 1 vacant freehold house priced at over half a million: an ex-HMO, apparently with consent to be used as a family house, though placed as it is, on busy Gunter Grove, it is unlikely to appeal to most families.    A conversion to flats seems likely. 

There are also 2 investment houses.  Barclay Road Fulham is ideally situated close to the Fulham Broadway tube.  It is a freehold house divided into a basement flat with vacant upper parts, the basement flat currently housing a regulated tenant.   This could work out to be a canny buy depending on the temperament of the regulated tenant.  With a guide price between £575K to £625K it is little more than the price of a 2 bedroom flat but with work, a wonderful 3 or 4 bedroom maisonette could be created.    

If you are reading this as a potential home-buyer, we cannot stress the need to check out the regulated tenant as if they don€™t want to go, you can€™t get rid of them and you can€™t put up the rent until the next rent review.  The rent has to be agreed by a rent officer who doesn€™t really take into account €˜market rents€™ i.e. supply and demand, so a monthly regulated rent is usually approximately what an Assured Shorthold Tenant would pay per week.  The buyer will also become the landlord and will be responsible for the upkeep of the whole property including the regulated flat.  Property subject to regulated tenancies are investments because the value is diminished while there is a tenant in situ but if the tenant dies, becomes ill or the landlord manages to pay off the tenant, then clearly the property will jump in value, although anyone living with the tenant up to 2 years prior to the death of the Tenant, may be able to take over the Regulated Tenancy.  For a young family however, a regulated Tenant can prove to be an asset if there is a harmonious relationship between the two.  The young family can sometimes gain a surrogate grand-parent; the regulated tenant gains youthful companionship.

But I digress.

The second large house for sale at the Allsops auction, 99 Babbington Road, Streatham, has a guide price of £650K+ and is divided into 9 studio flats, 6 of which are occupied.  A budget of several hundred thousand pounds would be required to turn this into a modern family house, but with a yield of 8.4% based on the guide, this is probably an investor€™s buy.  A final sale price of £600,000 is probably a bit closer to the mark.

So why the lack of higher priced property this time?  Presumably the people who own property worth £750K and above would rather avoid opening their homes to the masses as is necessary at auction and have the funds to stay put and wait for a better time to sell.  They may have sufficient equity to do any remedial work required or even take advantage of the high numbers of builder/developers who are taking on refurbishment work for the first time in years.  This is a good sign for the mid-market.  Look around and there is little property on the market.  Admittedly, little of the stock on the market is selling, but low stock fuels demand and the fact that we are just not seeing floods of high price property at auction in London, particularly given the plethora of properties in the capital which are worth over three quarters of a million, bodes well for the property market overall.

We€™ll discuss first time buyer and low priced buy-to-lets tomorrow.  The next Allsops residential property auction will be held on Thursday 30^th October at The Great Cumberland Hotel and Monday 3^rd November at The Cafe Royal.  This London property Finder will be looking for best price opportunities.

www.allsop.co.uk

Technorati Tags: bargain property, Battersea bargain property, bray property, Highbury bargain house, london property bargains, London Property Finder, london property market news, property auction, property market news, Property News, self-build bargain, the london property market

Tags: bargain property, Battersea bargain property, bray property, Highbury bargain house, london property bargains, London Property Finder, london property market news, property auction, property market news, Property News, self-build bargain, the london property market