Selling up and buying in the South East due to the Welsh landlord license

by Readers Question

10:59 AM, 20th July 2015
About 3 years ago

Selling up and buying in the South East due to the Welsh landlord license

Make Text Bigger
Selling up and buying in the South East due to the Welsh landlord license

Firstly what a great site this is ! I currently own three properties in South Wales which soon I will have to obtain a license to run.dragon

What are the thoughts of the experts on this great idea by the Welsh assembly ? I am considering selling and using the funds to purchase in the south east where I now live.

I want to do it right obviously therefore any ideas on selling in this order regarding CGT ; property one I used to live in around 16 years ago it only cost me 10k and with renovation costs being around 10k currently valued at 80k. Property number two cost 38k valued at 60k with around 10k in maintenance bills over the years. Property three costing 75k worth around 80k ?

Thanks

Charlie



Comments

Neil Patterson

11:08 AM, 20th July 2015
About 3 years ago

Hi Charlie,

Have you made any unused loses and have you used your CGT allowance already?

The .Gov site will assist >> https://www.gov.uk/capital-gains-tax/overview

We also have a page on "Capital Gains Tax relief on a property you have lived in"
>> http://www.property118.com/capital-gains-tax-relief-on-a-property-you-have-lived-in/

It might also be a bit of a price shock looking in the South East. Is the new License really worth all the expense and trouble? CGT, Legal Costs, Letting Costs etc.

What yields are you getting at the moment to compare to the South East?

Christine Turner

17:25 PM, 20th July 2015
About 3 years ago

I am also a landlord with 7 properties in South Wales, around the Aberdare area. Why are you so worried about licensing?. I have read the documents and nothing in them causes me to be concerned.

Mandy Thomson

18:43 PM, 20th July 2015
About 3 years ago

I am the landlord of some property in South London that is soon likely to be subject to "selective" landlord licensing. While it's true that in England there is no national licensing or registration in place, local authorities have the discretion to do pretty much whatever they please - charge what they like (£500 - £750 or more per PROPERTY, & they don't have to offer discount for multiple properties), impose whatever rules they like, and harass whatever landlords and tenants they like.
Furthermore, these local English schemes deliver NO training and have yet to demonstrate any effectiveness at dealing with miscreant landlords, other than those who fail to register, who then get a criminal record. Moreover, this is almost always introduced by councils with an anti landlord agenda to raise revenue.
While the Welsh scheme will not stamp out rogue landlords, it will enable well meaning but inept or lazy landlords to improve or force them to use a proper agent - something I'm very much in favour of as much of the reason the industry gets a bad name is because of amateur landlords.
I've yet to see the full details of the Welsh scheme, and we've yet to see it in action, but assuming it will be fairly drafted and applied, it's got to much better than the English system and better than just leaving bungling new landlords to just get on with it.

On the other hand, theire

David Price

19:21 PM, 20th July 2015
About 3 years ago

Don't bother unless it is to be near your property. Licensing is coming to a county near you wherever you live, both of landlords and property.

After CGT and selling costs you will be lucky to have £150k in your hand from all three properties. Just enough to buy a few garages in the south east?

Charlie Williams

9:07 AM, 21st July 2015
About 3 years ago

Reply to the comment left by "Neil Patterson" at "20/07/2015 - 11:08":

Hi I am getting a good yield however no capital growth while I appreciate the South east is more expensive I can place a reasonable deposit down.WHat concerns me is the CGT I have not used any allowances up and I am a 40% tax payer.Do I sell one a year ?
Regards

Anon

12:56 PM, 21st July 2015
About 3 years ago

Charlie,

" I am getting a good yield however no capital growth while I appreciate the South east is more expensive I can place a reasonable deposit down."

The grass is always greener on the other side. On property #1, you have done very well.

In the South East, the numbers just don't stack up. Average wages are about £18k, but a house costs around £400,000. We are in a bubble. Yields are poor.

If houses prices in Wales have not gone up by much, then then they are not likely to fall too significantly either. Your capital is protected. Imagine buying a £400,000 property in the South East, the prices crashes to say £320,000. Lets suppose you need to sell urgently due to economic climate, then you a going to take a big hit. You can't offset capital gains loss against your income tax.

Your Welsh units are cheaper, so as you say you can sell one per year and take advantage of capital gains tax allowance of £11,000 per year. If you bought something for say £300,000 and sell for £400,000, then you will have a 28% capital tax liability.


Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

Is Shelter a charity?

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More