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Hi All,I'm just after a bit of advice really. My partner and I had reserved a new build prior to COVID using the HTB scheme and had a mortgage offer ready to go for exchange but the pandemic struck. The build was then stopped and completion window moved from initially Aug-Sep 20 to Jan-Feb 21. Unfortunately my partner has been furloughed and this mortgage offer has since expired. We therefore haven't exchanged and will be unable to do so without a mortgage offer. We are trying to arrange for another mortgage offer but despite being way under the possible affordability threshold of our mortgage (even taking into account my partner's furlough salary) our lender is insisting on a letter from their company to explicitly state that they will be returning to work after the furlough scheme ends in October. Apparently they are viewing the furlough scheme as a 'temporary employment' and therefore need evidence of that they will be bringing people back to work when the scheme finishes. The company is in events which has been very badly hit by the virus and have given very little indication as to whether they will bring back staff in October or start making redundancies. Apparently even if we were to reapply with another lender, they would also require this letter of confirmation. This is despite one salary able to cover the mortgage payments and even the possibility of putting down more than a 5% deposit. I am doubtful that my partner will be able to get this letter because the company doesn't appear to have made many decisions r.e. their staff and the furlough scheme as of yet and therefore without this we are currently unable to get a mortgage offer. Without this we are unable to exchange contracts. So the new build we have been waiting for over a year to be ready and which was delayed because of the virus, is now apparently in danger of falling through completely? Are there any lenders who are offering mortgages without requirement for this return to work letter?I wondered if anyone might be in a similar position and had any advice on how to proceed? Thanks for your help!
Hi guys, just a quick few questions on tax that come up less often. BTL insurance claim, if you claim on your insurance for damage to a BTL property, do you claim the insurance payout as income and claim any contractor repair costs as expenses or do you claim neither as its an insurance payout rather than earned income? If you withhold some or all of the deposit due to losses of time, work, rent, damage or whatever, either for actual contractor costs or for your own time and hard work to clean and repair etc, does this need to be claimed as income or not as the deposit is actually to counter act your losses? Many Thanks Scott Child
Hello All... newbie here so please be forgiving! ( apologies if my post is a bit long ... hopefully some will read until the end ) I am looking at some BTL opportunities and found a 3bed house all refurbished to high standards that looks interesting in an area that I think will gain in value. After doing some research I believe that the developers bought the property last year for about £90k. There were a few sales last year at that level actually in the same area. The highest sale achieved in this street was £105k back in 2005 ... so I would guess pre-crisis... admittedly I could be comparing apples and pears . Now that they have refurbished completely the property they are asking for £210k. This is definitely higher than what this area is worth in my opinion ... for example there is a non-refurbished similar house for sale at around £105k I think (I need to call the agent to investigate... but the are closed now) I am doing the following math... which probably make not much sense... please let me know : (a) Fair Value of the house: They bought the house of £90k They have probably spent £15k on refurbishment.... but let's say £25k to be on the safe side Let's assume the area has gone up in value by 10% since they bought, again to be safe so I think a fair value for the house is 110% x 90 + 25 = £124k (b) Looking on internet, I believe that if they rent the bedrooms separately (and manage to have 100% occupancy) a toppish yearly gross rent would be around £14k to £15k As I don't know any builders/architect etc. so I am looking for a ready made investment... hence I was thinking about offering £150k as a cash buyer. That gives them a 21% bonus to what I think the fair value of the house is and a 30% return on their £115k investment. But this is a 30% discount on the value they are asking for with the agent... which sounds massive. So here are my questions: 1/ Is my reasoning flawed and/or too simplistic ? 2/ Their 210k asking price is an 82% return. Are they really hoping to make that type of money ? Is that the sort of return people are looking to make when refurbishing/flipping properties? 3/ Does my 150k offer sound reasonable? Any remarks welcome Thanks to anyone that will be willing to help. Have a good evening.