HSBC undervalued home by £50-60k!

bexterswell

opinions4u wrote: »

1. Short term lending is often loss making.

2. Property developers have been known to take residential mortgages on properties that they intend to let.

3. Interest only would maximise tax relief on a let property.

There isn't anything that would make it an automatic decline. But an underwriter would be likely to be cautious and carry out a few extra checks.

Thank you, that is helpful advice. Although in my opinion it's madness to keep paying a mortgage for 25years if you can avoid it and are willing to live on a building site, it's probably good advice to refrain from telling mortgage advisors that we don't intend on having a mortgage for long!

Reguarding HRMC... we hadn't properly looked into declaring anything (we haven't sold it yet) but it is our home and we'll have lived there approx 2years, any profit won't be considerable and it'd be difficult to prove we did it for profit. I happen to enjoy renovating immensely, i'm starting to get itchy feet already much to the partners dismay!

We had it on good authority (off the record) from a financial advisor friend, that as long as we stay at least a year we won't get any questions on the first and second move, but possibly on a third if it looks like we've made considerable money each time...do you agree or is it not really your area? If we made considerable amount of money, i'd be 'happy' to pay tax on it.

holly_hobby

bexterswell wrote: »

Reguarding HRMC... we hadn't properly looked into declaring anything (we haven't sold it yet) but it is our home and we'll have lived there approx 2years, any profit won't be considerable and it'd be difficult to prove we did it for profit. I happen to enjoy renovating immensely, i'm starting to get itchy feet already much to the partners dismay!

We had it on good authority (off the record) from a financial advisor friend, that as long as we stay at least a year we won't get any questions on the first and second move, but possibly on a third if it looks like we've made considerable money each time...do you agree or is it not really your area? If we made considerable amount of money, i'd be 'happy' to pay tax on it.

If you are purchasing property (which will not act as your primary residence) to renovate and refurb, with the sole intention to then sell on to generate a profit from the sale - then strictly you are classed as a property developer (as oppossed to an investor), and as such your net profits are liable to income tax at your highest rate not CGT (which is charged at 18% if total annual income is basic rate tax, orr 28% it total annual income is higher rate tax, which incs the net gain from disposal of the property).

If you hold more than one personal property (either as an investment or for private use), you are liable to CGT to any net gain on disposal, on that which is not your primary residence ( of which you can only nominate one). If the 2nd property has previously acted as your primary residence at any point during ownership pre sale, then the level of CGT exposure and permitted reliefs and allowances will alter significantly.

If the property sold is your primary residence, then this is fully exempt from CGT under full primary residence relief - (HMRC may ask for verification via POR/utility bills if you own more than 1 property at the point of sale and haven't nominated this as your primary), so as such there isn't a stipulated minimum term of ownership pre sale of your own home, before which it would be scrutinised - of course HMRC may delve regardless into anything they see fit, so far reaching are their powers.

Of course all tax advice must be independently verified by your own qualified tax practioner or HMRC directly, before you act upon it.

Hope this helps

Holly

Thrugelmir

bexterswell wrote: »

We had it on good authority (off the record) from a financial advisor friend, that as long as we stay at least a year we won't get any questions on the first and second move, but possibly on a third if it looks like we've made considerable money each time...do you agree or is it not really your area? If we made considerable amount of money, i'd be 'happy' to pay tax on it.

Factoring in legal fees to buy and sell, estate agents fees to sell and stamp duty to purchase. Then costs mount up. Your current property will cost you in excess of £20k. That's a sizable amount of profit to make in a stagnant market just to cover costs.

bexterswell

You might be interested to know that HSBC got back to me on the dossier we sent and revalued the property to 420k, that's 70k over what their 'professional valuer' came back with! The women did say it was the best dossier she'd ever seen, so thank you Rightmove for keeping 5years worth of sales data including photos and floorplans! :-)

Thrugelmir

bexterswell wrote: »

You might be interested to know that HSBC got back to me on the dossier we sent and revalued the property to 420k, that's 70k over what their 'professional valuer' came back with! The women did say it was the best dossier she'd ever seen, so thank you Rightmove for keeping 5years worth of sales data including photos and floorplans! :-)

Pleased to hear you obtained a good outcome. With a gesture of goodwill from the HSBC.

:beer:

opinions4u

bexterswell wrote: »

You might be interested to know that HSBC got back to me on the dossier we sent and revalued the property to 420k, that's 70k over what their 'professional valuer' came back with! The women did say it was the best dossier she'd ever seen, so thank you Rightmove for keeping 5years worth of sales data including photos and floorplans! :-)

It's always appreciated when somebody posts the outcome.

Thanks.

Morgage_Confused

well done its amazing what a few new pine doors does...the good times are back.;)

matt1234

bexterswell wrote: »

You might be interested to know that HSBC got back to me on the dossier we sent and revalued the property to 420k, that's 70k over what their 'professional valuer' came back with! The women did say it was the best dossier she'd ever seen, so thank you Rightmove for keeping 5years worth of sales data including photos and floorplans! :-)

I have just read this thread in its entirety, and the replies here are astonishing. Any hint of someone potentially making a profit on the sale of their property and the knives are out.

Oh do you even know anything about property, don't you know we are in a recession and house prices are going down, don't bother threatening legal action as it's meaningless, don't even try and change the valuation as there is very little chance it will change, do you know surveyors give a value for mortgage purposes rather than an expected sell price as an EA would (it was already mentioned in the OP duh!!)....oh and finally....make sure you ring up HMRC as if you DO manage to get your higher valuation and eventually sell the property...you must declare all profits to the tax man. OP had already mentioned this was their primary residence and therefore no tax implication arises!

Give it a rest!

Gentoo365

Banks will want to base their valuations on the previous sale price. This is because they know for a fact that it achieved that price on the open market. Any increase in value due to renovations is purely hypothetical unless an actual sale goes though.

If you want to make money from buying houses, renovating and selling then you cannot expect the bank to enable you to realise that hypothetical profit.

In the past you possibly could, but not now.

EDIT - It seems that it is possible to convince a bank to lend. I await the mis-selling claim in a few years time.

Bluemeanie_2

Thrugelmir wrote: »

Common misconception is that the value of improvements adds the same value to a property. Such as changing the doors.

Don't forget the lit up twigs in a vase!:rotfl: