Property purchase

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    Property purchase

    New here, looks very informative.

    Im after some advise, hope someone can point me in the right direction ?

    I've recently found myself in a good position in life to be able to outright buy a new build property in the NG14 area.

    I don't need to live there as I spend time away working aboard, and when Im back in the UK, I have a place to stay.


    1.Can I rent out my brand new house straight after purchase ? Or do I need to live in it for a period of time ?

    2. Are there any financial penalties in doing the above ? Apart from Tax on income.

    3. Are there any good Nottinghamshire based comparison rental price sites ? Or is it a good idea to ask a few rental agents to come out a view the property ?

    Thanks in advance

    Unless there's an odd constraint in the deeds, you should be able to rent it out straight away -as long as you're not trying to rent it as an HMO which may need planning permission and a licence.

    You'll pay Capital Gains tax on any gain in value (unlike your home). There's currently a letting allowance if you rent somewhere that used to be your home, which you'll not be able to use if you never lived there, but that's expected to be abolished or made available to live in landlords only. Similarly, if you have lived there as your home, when you apportion the capital gain between your rental and residential use, you can add an extra 18 months to the residential (and therefore CGT free) proportion. Again, that's probably going to be reduced to 9 months next year. So you do lose something if you don't live there before letting it out. But you'd have to live there for a while, a couple of months isn't likely to qualify you as resident.

    Look at Rightmove. There's likely to be one or two letting agents who have a grip of the area.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).


      Originally posted by Andy B View Post

      I've recently found myself in a good position in life to be able to outright buy a new build property in the NG14 area.
      Is it anywhere near Nottingham City Councils £780 landlord licensing area? Or likely to be in the future?


        No its right on the edge of Nottingham, so no where nr the centre, but thanks for the heads up



          Great thanks for such a fast response


            Have you looked into the tax you will need to pay?


              Hi, No not yet, really new to all this, any advice on a property that's up for £172,000


                Worth looking into as at 172k investment think there might be better options
                If you rent for 1k less some fees and insurance say £900 profit a month thats over 10k a year to pay tax on


                  Thanks I will give it some thought


                    plus if its new build on big estate it wont be worth 172 in a few years probably less unless area is good


                      If it's a new build check there are no "permission fees" you need to pay for permission to rent. And check you are actually allowed to rent!
                      Problem is that you may not get a copy of the lease until you are well into the buying process and therefore you will have financially committed to an extent before you find these things out.
                      If it's a new build make sure to use your own solicitor - not the one recommended by the developers - this is very important despite whatever incentives you are offered to use their conveyancer and go through the lease with a fine tooth comb.


                        If you are intending to use it as a place to stay whilst its let to tenants you may have more to consider. Firstly that will limit your market, probably to HMOs, and secondly you would become responsible for the Council Tax so would need an inclusive rent. There is also, of course all the regulation around HMOs to think about.

                        if your intention is to let it for a period then return to live in it you should bear in mind that it can take the best part of a year to evict tenants who dig in or have nowhere else to go, particularly if its a family. You should budget for several months in a hotel or elsewhere on your return just in case.


                          As stated just look into the private estate aspect of where your buying, i can only assume that the house is freehold but you will have to pay monthly/yearly management fees for grass cutting etc..... well these can be far more restrictive than you think and the costs can also increase a lot over the years so this will need to be factored in. The new model of the council not adopting the roads/green areas has come about since around 2004 (since legislation changes allowed developers to cash in), but it can have a significant effect on any profit you think your making, research it a great deal before you buy.


                            Yep, good old Fleecehold! I pulled out of a sale recently as the Estate charge was unregulated and uncapped. I couldn't sign up to a hybrid freehold. The agents try to say it's no big deal, it's only £150 per year, however 5 years on and that could £500 plus, you can't fight it just have to pay it as it's written into the contract by deed. Found another place which was a true freehold.


                              This aspect of investment property purchasing is not considered enough, the costs are, as you say, totally uncapped, so an investor could buy and years later when the estate is finished and getting older the pumping station may need to be replaced (a lot have them because they don't drain too well) i know this will cost 10's of thousands, what if a sink hole appears..... fly tipping by a troupe of the traveling community ! The list goes on, i would not touch a new build estate if i were looking to invest..... in-fact i would not look at them at all. Go for a freehold property where the land outside of your driveway/front garden is owned by the council.


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