@JasonN: Yup, came in last night at midnight. You're fine on being exempt from 15% SDLT and an annual levy of £3500 IF you are going to be letting your property out for three years. If you sell or live in it before the end of three years the revenue will come after you for balance of 15% SDLT. You need to talk to accountant though as some Trust structures as I understand are exempt anyway, but I'm not an accountant!!
@JasonN: As far as the pension changes are concerned there has been some discussion on the fact that being able to use your whole pension rather than just 25% of the fund will make it easier for those with an interest only mortgage. Together with the ISA changes this can help a fund to be built up to a higher level. However, whilst this will assist many who already have interest only mortgages and were concerned about how they were going to pay it back at the end of the term, it remains to be seen whether these changes are enough to convince lenders that interest only is less of a risk than it was before. I suspect we will see a gradual relaxation of interest only policy over the coming years although for the most part it will continue to be the preserve of higher net worth borrowers and more of a specialist product rather than a return to the mass market.
@SeemaShah: Can you give me some idea of value please?
@SeemaShah: In terms of the mortgage, if you remortgage now you should be fine with most lenders as they want at least 70 years on the lease at application. If it drops below this then your choice narrows, for example Lloyds Banking Group including Halifax will have an issue. There are other lenders who will do shorter leases as long as there is at least 35 years unexpired at the END of the mortgage term. If you can extend it now, however, it may make sense to do so as the cost may not be as great and it will help if you wanted to re-sell it.
@SeemaShah: OK well I would say at that level it's worth doing. Costs will be c. £30-£50k on the capital sum (slightly wide variation as not sure of other variables) and you will be paying for your freeholders solicitor and surveyor as well as your own. You also have to pay Stamp Duty on the cost of the extension but as your figure will be less than £125k it won't apply. Budget on about £5k for all legal and surveying costs. It can take up to 6 months IF the freeholder gets difficult.
@MrWilliams: I shall leave that one for Ed!
@MrWilliams: It depends when your tenancy was agreed and what you signed. Up until two years ago it was standard to charge for renewals, although usually a tapering sum. So if your tenant was signed up >2 years ago then most likely you will have to pay as you signed the contract. Given lack of voids and continuity if you like the tenant then pay up and feel secure. However, if the tenancy is <2yrs old I'd be tempted to negotiate with the agent. Of course you don't want them to persuade the tenant to move out so a compromise is a good idea. It is a free market so remember, read before you sign.
@MrWilliams: Well as I said it depends whether you like the tenant and what you signed. To be honest when you first sign a tenancy you can request that they take out a renewal fee but of course you then run the risk that less scrupulous agents will try and persuade the tenant to leave and then they can earn putting them somewhere else. This is rare though. At D&G our average tenancy length is c. 2 years and we don't charge renewal fees.
OK, well seems like a quieter session and can see that the day after Budget day is a busy one. Thanks to all who joined in.
@JasonN: Yup, came in last night at midnight. You're fine on being exempt from 15% SDLT and an annual levy of £3500 IF you are going to be letting your property out for three years. If you sell or live in it before the end of three years the revenue will come after you for balance of 15% SDLT. You need to talk to accountant though as some Trust structures as I understand are exempt anyway, but I'm not an accountant!!
@JasonN: As far as the pension changes are concerned there has been some discussion on the fact that being able to use your whole pension rather than just 25% of the fund will make it easier for those with an interest only mortgage. Together with the ISA changes this can help a fund to be built up to a higher level. However, whilst this will assist many who already have interest only mortgages and were concerned about how they were going to pay it back at the end of the term, it remains to be seen whether these changes are enough to convince lenders that interest only is less of a risk than it was before. I suspect we will see a gradual relaxation of interest only policy over the coming years although for the most part it will continue to be the preserve of higher net worth borrowers and more of a specialist product rather than a return to the mass market.
My lease is now down to 71 years, should I extend it before I apply for a remortgage as I want to do that soon and what are the costs please?
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