This week we have finally managed to pull in a deal, priced at close to £8m. The seller was a little paranoid, presumably due to past sales which have fallen through. They required confirmation of who the buying party is and a letter from their lawyer to confirm they have the cash. This was duly provided, twice in fact as we had to raise the offer.
However, even after the deal had been agreed the seller then asked for a bank statement through a couple of agents who were arranging the deal. This is a little ludicrous, no one wants to show their personal statements to anyone else, especially as the initial letters had been provided through a reputable firm of lawyers, with the buyer clearly identifiable, and with two agents involved in the deal. I even appreciated the need for the seller to insist on the initial letter for comfort, as it’s very easy to put in offers and not follow through, this happens all the time. And often agents pretend to be buyers with a view of finding a genuine buyer when the contract is in, and then can’t perform anyway.
Most talk is cheap, there is no follow through when it comes to many individuals and the same is true in the property business. There are very few serious players who get things done, most make noise and hover around deals hoping to somehow or another get some crumbs whilst transactions are done.
This is a very lucrative deal in a prime part of North London. In this market the only deals to do are the most lucrative ones; you can afford to be choosy, as the future conditions are uncertain. There are many variables in the market, from the new lending criteria coming into play to the softening of the currency and the uncertainty around it; and then you have the consequences of Brexit, which only few understand in totality. This environment makes people nervous and consequently decent deals start to float to the surface, the likes of which could only have been imagined only twelve months ago.
We are seeing interest from developers in India and Family Wealth Offices, who want to bring money wholesale into the London property market. This is the environment they look for and prey on. The foreign player has the added bonus of a soft pound as well as a soft property market. The two combined can, with a little effort, have the effect of making deals about 40% cheaper. It is rare to see a property sale in London with this much discount.
We have a property developer in South India who has taken the strategic decision to enter the London Market; they are currently negotiating on a site.
Rest assured this window will not last forever, those who purchased in late 2008 and 2009 during the last period of uncertainty are sitting on a tidy fortune.
Agony Agent!
I am often asked a number of common questions in relation to letting out a property, be it a landlord’s home or an investment property. Over the coming weeks I will be answering your questions, so please feel free to contact me with anything you would like to ask.
Some common questions I am asked…
How do I know I am getting a good tenant?
As a lettings and management specialist I devote more time to ensuring the prospective tenant is fully vetted and qualified to meet our criteria. We carry out identity and residency checks on all tenants. We use a referencing company to carry out credit, affordability and bank verification checks and call previous landlords to ensure there is no adverse history. If a tenant does not meet ALL of our criteria they will be asked to provide a guarantor (who will undergo the same checks as the tenant). We also have the facility to reference check international tenants.
Do I have to provide furniture for my tenants?
No. It is your choice to decide whether you would like to offer your property furnished or unfurnished. We will discuss this with you before we commence any marketing. Many landlords stay flexible on this option and base their decision on the incoming tenant
What is an inventory and do I require one?
An inventory is an integral part of letting your property. Your property is a very valuable asset and an inventory is there to protect your property and its contents. An inventory lists the condition of your property (such as walls, ceilings, woodwork, doors) and all items being left in the property (such as beds, wardrobes, appliances). This document is signed by all parties to agree the condition of the property at commencement of the contract. This way there are no discrepancies at the end of the term.
An accurate inventory can save you money in paying for works and decoration that clearly is not needed, provides proof in disputes and most importantly ensures you have that extra peace of mind.
Who pays my income tax on my rental income?
If you are a UK landlord it your responsibility to pay any income tax due on rental income earned.
If you are an overseas landlord then the rules are different. You will need to complete a NRL1 form (which we can provide you). This will mean that all rental income earned from your property is paid directly to you less any fees and outgoings. If you do not fill in the NRL1 form either we, as your managing agent, or the tenant must hold back 20% of the gross rent and send this to the Inland Revenue on a quarterly basis.
If you are struggling with any lettings issues at all please do email me at [email protected] and we will publish your question and response in the coming weeks.
