Dennis Silverman

Registered with Property118.com
Monday 10th August 2015


Latest Comments

Total Number of Property118 Comments: 5

Dennis Silverman

10:25 AM, 5th October 2015
About 4 years ago

Shadow Chancellor John McDonnell anti Buy to Let but said very little

The new rules on tax relief on loan interest when fully implemented will put some of my rental income in the 40% bracket, whereas now I am just under 40% threshold.
One of my properties has recently become vacant, and subject to contract I have now sold it. In future, I will then just avoid the 40% band. Renting is hassle enough without paying 40% tax on the income.
We will be investing some of the sales proceeds in shares. A couple can invest £30,480 between them in share ISA's. The dividends are only taxed at 10% and no tax forms to fill in. Who knows, I still might retain a stake in the housing market and buy several house-builders shares.... Read More

Dennis Silverman

18:31 PM, 16th August 2015
About 4 years ago

Taylor Wimpey lease - cost of escape?

Thanks for you advice, I do agree that the cost of buying the freehold will only cost slightly more than a lease extension. However if I go for the lease extension i will end up with a 240 year lease with 230+ years to run at nil ground rent. There are actually 46 apartments in the block and I don't want to be the sole freeholder collecting ground rents fron the others. I have had good advice from two experienced valuers. One advises me to approach the freeholder straight away to see if I can do a deal. I have written direct to the freeholder and am waiting for a reply. I am hoping I might get a positive reply. The freeholder is one of the 300+ companies owned by the Tchenguiz Family Trust. In February 2015 Vincent Tchenguiz missed a deadline to repay £430 millions of debt to Prudential, Bank of America and others. A few thousand from me now rather than in 18 months time may be helpful. Google Tchenguiz for lots of interesting threads.... Read More

Dennis Silverman

6:08 AM, 15th August 2015
About 4 years ago

Taylor Wimpey lease - cost of escape?

Reply to the comment left by "Chris Amis" at "14/08/2015 - 21:34":

You need at least 50% of the leaseholders wanting to enfranchise,i.e. buy the freefhold. At around £30k cost per flat i would very lucky to find even 4 or 5 willing to stump up or borrow that kind of sum.
I had thought about waiting for the law to change but the real problem will only occur in about 20 years times when these ground rents will be £2000+. I don't expect any real political pressure until then, and it will still rely on the government of the day being persistent in pushing through new legislation, with much opposition from pension funds and the like that originally bought these freeholds.
In 20 years time, if I am still here, I will be aged 91. I can cope with the hassle now but not then. In 20 years time if no legislation has happenned then the cost of a lease extension starting from a base ground rent figure of £2000 p.a. will be absolutely astronomic.... Read More

Dennis Silverman

20:57 PM, 14th August 2015
About 4 years ago

Taylor Wimpey lease - cost of escape?

I have just had quotes from 2 experienced valuers. Both quote very similar figures - a mind-boggling £30,000 to £40,000. The second valuer has actually carried out several of these lease extensions on long lease properties with ground rents doubling every 10 years. The valuer states that the marriage value is nil, the reversionary value is only about £300 but it is all about the loss of considerable future ground rent income to the freeholder. He has revalued all the different cash periods and capitalised them at an assumed 5.5% discount rate. The last valuer says if I could do the lease extension now it would cost me arond £31,000 plus about £6,000 in costs for my costs plus freeholder's costs. If I delay about 18 months until I have owned the property for 2 years before serving the statutory notice for a lease extension then the cost will go up to about £35,000 plus costs.
The valuer suggests I might try making a direct approach to the freeholder now to see if we can do a deal before the qualifying 2 year period. The valuer says that if the freeholder is temporarily 'cash strapped' then I could be offered an attractive deal with minimal expenses. I have nothing to lose by trying other than my time.
I might also offer the freeholder an alternative deal. Firstly not to extend the term of the lease at all beyond the existing 150 years. Secondly to agree to the ground rent doubling but only at 25 year intervals. (this equates to only a 2.85% compound annual increase). So the ground rent could now be 2007 £250, 2032 £500, 2057 £1,000, 2082 £2,000, 2107 £4,000 and 2132 £8,000.
The latter option might be a bit cheaper and would give me confidence that the ground rent is going to stay within reasonable bounds way into the future and is unlikely to escalate to such a level that future buyers are not put off by the high ground rent.
I would recommend that any buyer contemplating a new TW apartment with a similar lease is to agree a fair price and then DEDUCT about £25,000 towards future costs in negotiating a fairer deal on the ground rent.... Read More

Dennis Silverman

20:53 PM, 10th August 2015
About 4 years ago

Taylor Wimpey lease - cost of escape?

No idea of cost - as a rough guess could be as much as £20,000. 30 flats in block would be surprised if any others join me due to the high cost. Bought property at good price - been on market for 6 months part way through 3 year company let. I probably paid about £15000 below market value. Online lease calculators are a waste of time - none allow for escalating ground rents whether they double after 10, 20 or 25years, or whether they are RPI linked or HPI linked. I calculate that after 40 years with inflation at 4% then a £500 ground rent would be £2400. Compare this with the £8000 ground rent a TW ground rent will be in 40 year time. So TW will be 3.33 times more expensive. Working back to present day it's like asking at today's prices £1,666 ground rent instead of a more reasonable £500 per annum. Most buyers would want to take at least £12,000 of market value to compensate for the very high ground rent charges. I have been through to several sites selling leases. I have seen blocks of flats for sale with ground rents doubling every 25 years. I have also seen blocks for sale with RPI increases every 10 years and every 25 years but cannot find any sales for leases where ground rent doubles every 10 years. I presume that the LVT use past sales as a yardstick when valuing lease extensions but if very few sales happen then how do they work it out. Any positive ideas as to how much I will have to pay for statutory 90 lease extension with peppercorn rent? (would not get 60% of owners interested in buying freehold)... Read More