TheMitchells Posted February 8, 2017 Share Posted February 8, 2017 Is anyone else watching the programme - Climbing The Property Ladder on Channel 5? Its really funny to watch. Tonights two examples include one in yorkshire, renovating a small cottage. the other is a completely novice who seems to think because she has set a budget of £2,000 for the kitchen, thats what it should cost. She seemed shocked that a complany quoted nearly £3k for the units and it didnt even include tiles, appliances etc!! Which planet is she from? And she wants a profit of nearly 100k - she needs to get real and understand that spending 20k on a house does not add £120k to the value. But I guess thats why they are filmed - it makes interesting tv. I wonder what they'd make of our renovation? Hopefully I wouldnt be making too many mistakes that cost dearly. Link to comment Share on other sites More sharing options...
ProDave Posted February 8, 2017 Share Posted February 8, 2017 I can't say I have watched anything on channel 5 for a long time, it all seems "dumbed down" tv to me. I have fitted two sub £1K kitchens in our rental properties. howdens cheapest flat pack range but the results were surprisingly good (with the doors shut) Link to comment Share on other sites More sharing options...
TheMitchells Posted February 8, 2017 Author Share Posted February 8, 2017 yes, we have been to Howdens for our kitchen and the quote came back almost the same as the Wickes price with lots of sale reductions (£2000 for only the units). it wasnt for the basic kitchen but an average value one which will hopefully still look great. But part of the learning experience is getting a good idea how much to budget for things - I guess we all have to learn. Link to comment Share on other sites More sharing options...
TheMitchells Posted February 8, 2017 Author Share Posted February 8, 2017 well the small cottage made a profit of 19k and she is planning to buy a second property soon and the novice eventually spent 40k, twice her origonal budget and far more realistic. It went up for sale at 325k , which would make a profit of 87k but it didnt sell so she rented it out and plans to sell it later. Maybe trying to get too much - I'd be happy with 75k for 6 months work. I'll be very happy if we can make that on our job. And we are doing most of the work to maximise the profit. And the novice isnt planning on doing another renovation - she didnt enjoy the experience at all. Next weeks looks interesting - I like this programme! Link to comment Share on other sites More sharing options...
AliG Posted February 8, 2017 Share Posted February 8, 2017 This sounds suspiciously like my old favourite Property Ladder, but without Sarah Beeny Link to comment Share on other sites More sharing options...
Ferdinand Posted February 9, 2017 Share Posted February 9, 2017 (edited) Just watching it. Car crash TV . OK - the unvarnished verdict. The programme is being massively dodgy by not including loss of income in their "returns" and ignoring transaction costs, then not mentioning it. HUTH at least always says "before taxes and expenses". The 325k one now has a rental which is losing her money. Rental £895 pcm minus 13% if managed. Will have spent 500-1k finding a tenant. Gross rental return = about 3%. Monthly costs are quoted as £800. Given that it is her second house and seems to be mortgaged she will likely have paid 16k stamp duty (definitely next time) plus perhaps another 4k costs on the way in. Identified by the programme? And she will have to refresh it before she sells - 3k? Plus sales legal and EA costs of 3-8k. Possible small profit due to inexperience, unless the buying price or rising prices saves her. Risk of tenant wrecking it. IMO the best decision she made was to buy a wreck in a good street. The 49k one has spent months of time for a 17k profit. But may have dodged the 3% 2nd property Stamp Duty if she is in rental (unless before 31/3/2016 which is moot now), and saved expenses by funding with cash. If it is a separate development property she will have paid 1.5k stamp duty on the way in. Plus perhaps 1k other costs. Plus 1-2k sales costs. If the programme did not identify transactional costs her profit is actually about 11k, which fits nicely with the CGT allowance. The second one shows promise after a rough start. The first one is "angels rush in..". "Dada rail" indeed, when it was a picture rail anyway :-) . I'd say the "don't own your own house and be a serial developer with one property" may be a viable model if you can flip quickly, especially if in a couple and buying alternately (6 a year would be possible) or perhaps one owning your home and the other the development properties one at a time, or larger scale where the costs can be mitigated. But it has been crippled by transaction taxes. I wonder if either of them insulated to Building Regs requirements for those elements they renovated? Will be fun TV. Edited February 9, 2017 by Ferdinand Link to comment Share on other sites More sharing options...
TheMitchells Posted February 12, 2017 Author Share Posted February 12, 2017 we got hit by the extra stamp duty charge when we bought our place to renovate but we do claim it back when we sell. Hopefully in the not too distance future. I shall enjoy watching the next programme - seeing what not to do, mostly. And did you see the electric socket hanging down from the ceiling in the middle of the kitchen at head height - wires sticking out, with an extention lead running to somewhere - not exactly safe practice. But pay peanuts ....... Link to comment Share on other sites More sharing options...
Ferdinand Posted February 13, 2017 Share Posted February 13, 2017 (edited) 3 hours ago, TheMitchells said: we got hit by the extra stamp duty charge when we bought our place to renovate but we do claim it back when we sell. Hopefully in the not too distance future. I shall enjoy watching the next programme - seeing what not to do, mostly. And did you see the electric socket hanging down from the ceiling in the middle of the kitchen at head height - wires sticking out, with an extention lead running to somewhere - not exactly safe practice. But pay peanuts ....... I am not clear whether I get all the Stamp Duty back, or whether I take it off the amount liable for cat and get a fraction of it back. iirc you are darn sarth so I would probably need to buy about 5 houses to pay the same amount of Stamp Duty. There was a fascinating piece in The Times yesterday about how the rich are now renting their £5m pads in London because the transaction costs of buying cover about 5-7 years of rent. Stamp Duty on a £5m house bought through a company which is your second house is 15% = £750k and then there is an annual Enveloped Dwellings Tax of £55k on top. How to kill the Golden Goose :-) Ferdinand Edited February 13, 2017 by Ferdinand Link to comment Share on other sites More sharing options...
TheMitchells Posted February 13, 2017 Author Share Posted February 13, 2017 7 hours ago, Ferdinand said: There was a fascinating piece in The Times yesterday about how the rich are now renting their £5m pads in London because the transaction costs of buying cover about 5-7 years of rent. Stamp Duty on a £5m house bought through a company which is your second house is 15% = £750k and then there is an annual Enveloped Dwellings Tax of £55k on top. How to kill the Golden Goose :-) Ferdinand Its so ridiculous - the other thing I learnt about stamp duty is that if you buy two properties that can be linked by HMRC they charge you are charged stamp duty on the whole amount. when we looked at the last plot, which was 150k, we agreed a deal to buy the bungalow for 300k 6 months later when the vendor had found a property. however the solicitir pointed out that we would pay stamp duty on the whole 450k which is over 12k rather than 4.5k on the two separate transactions. That was one of the reasons we decided against it - the additional 8k just added to the extra amounts which were taking us over our limited budget. even family members buying proerties next door are included in the linking for stamp duty - not something I had ever heard of! Link to comment Share on other sites More sharing options...
Ferdinand Posted February 13, 2017 Share Posted February 13, 2017 There is also a piece in the Guardian: https://www.theguardian.com/business/2017/feb/12/foreign-billionaires-london-choosing-rent-avoid-stamp-duty Link to comment Share on other sites More sharing options...
ProDave Posted February 13, 2017 Share Posted February 13, 2017 I thought getting the extra two property stamp duty back only worked over a short timescale, to effectively exempt someone buying their new main house before they sold the old main house. Link to comment Share on other sites More sharing options...
Ferdinand Posted February 13, 2017 Share Posted February 13, 2017 (edited) 6 hours ago, ProDave said: I thought getting the extra two property stamp duty back only worked over a short timescale, to effectively exempt someone buying their new main house before they sold the old main house. You get some leeway / allowances .. but I don't know what without really checking. And at present I am buying not selling :-). Edited February 13, 2017 by Ferdinand Link to comment Share on other sites More sharing options...
TheMitchells Posted February 13, 2017 Author Share Posted February 13, 2017 they initially said 18 months but it went up to 3 years. here's the relevant bit from the HMRC site. You won’t pay the higher SDLT rates if the property you’re buying is replacing your main residence and that main residence has already been sold. If you buy a new main residence but the sale for your previous main residence is delayed you’ll pay the higher rates as you own 2 properties. But you can get a refund for the amount above the normal SDLT rates if you sell your previous main residence within 3 years. A refund must be claimed within 3 months of the sale of the previous main residence or within 12 months of the filing date of the return, whichever comes later. Link to comment Share on other sites More sharing options...
jayroc2k Posted May 5, 2017 Share Posted May 5, 2017 Old post but just wanted to point out that plots tend to fall under 'commercial" property unless it's already a dwelling or was one before it was demolished and hence should not normally attract the extra 3% tax. But it I am not an expert so don't take my word for it, double check HMRC, that was my interpretation Link to comment Share on other sites More sharing options...
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