5 ways to improve your property position without leaving your sofa
Time on your hands is something that you may have more than usual at the moment. While we all wish the circumstances were different, it is a good time to get some of those jobs you have had in the back of your mind out of the way. After you have decluttered your wardrobe and alphabetised your spice rack, have a think about how you can improve your property position.
While moving house is a challenge (but not impossible) right now, there are plenty of property-related transactions that you can kick off without having to leave the comfort of your sofa.
Transfers of Equity or between spouses / family members
A new tax year has started and the firm is seeing an upsurge in the number of people looking to transfer percentages of properties between spouses or family members to allocate the capital value and/or property income for tax reasons. If, following discussions with your accountant, you want to take advantage of this, let us know.
The owners of flats in a building usually have the right to get together and buy the freehold of the building. Provided that at least half of the flats who qualify (and almost all flats do) want to participate and the building itself qualifies, the landlord cannot refuse to sell you the freehold. The relevant date for the valuation of the freehold it the date on which the initial notice is served so it would be a good time to make a start, given the valuation of the building is likely to be lower than usual at the moment.
If you have sufficient equity in your home, you may be able to take advantage of new deals available for lower-risk lenders. Valuations are not always possible if they will involve a valuer having to visit the inside of a property but some lenders carry out “drive-by” or “desktop” valuations, which are still an option.
The value of a leasehold property reduces over time. The shorter the amount of time left on the lease, the less valuable the property. Eventually, the lease will have no time left on it at all and will come to an end. Fortunately, leaseholders have the right to extend their lease once they have owned the property for 2 years. Again, the property will need to be valued because the landlord will be entitled to a premium but this may work in your favour at the moment. When a lease has 80 years or fewer remaining until it expires, the price of the lease extension becomes more expensive because an additional factor of “marriage value”, 50% of which has to be paid to the landlord. Marriage value is essentially the increase in the value of the flat following completion of the lease extension and is intended to reflect the increased market value of the new longer lease. If your lease has only a little longer than 80 years to go, making a start on the process without delay could mean avoiding the payment of marriage value to your landlord.
Committing fully to a deal at the moment may not be possible for personal or practical reasons but if you may want to sell or buy land for future purposes, an option agreement could do the trick. It is basically an agreement between a landowner and someone else, which gives that other person the option to buy the land in the future.
Buy to let Properties
Now is a great time to be a buyer of an investment property. With an ever less-favourable landlord tax regime in place and other forced sellers such as probate estates, if you have had an offer on a property you liked refused on a property in the last few months, you might find that it is back on the market and nobody can view it at the moment. Now could be a good time to get back in touch with the seller and make an offer. When no mortgage is involved and you have a motivated seller, it is possible to complete a purchase in less than 2 weeks – the firm has done it many times.
Call Laura Sainsbury on 020 8799 1855 for a no-obligation chat through your options.