Can I put a covenant on when I sell my house?

Richard_Webster

Also the buyer pays SDLT on the reasonable extra amount that might be obtained for the overage even though it has not be sought or obtained - as a contingent liability - HMRC want you to pay first and claim back later when you can prove the actual liability (or lack of it). This can put buyers off big time!

You can reword the documents to remove a specific monetary requirement and then you have to go in for ransom strips or restrictions on registration without a fresh deed of covenant by a later buyer, which gets complicated.

Liz23

Thank you all for your very helpful advice. I guess I must have come across as a money grabbing so-and-so, but I was only asking the question. I'm actually quite a nice person, but was advised by a real estate guy here to look in to it, maybe it's not such a problem here.
Thanks for your comment Davesnave, glad to see the keyboard bullies are still alive and kicking on the forum, although I'm not a newbie just not been on here since moving to Oz, and username was no longer active so had to register again.

HAMISH_MCTAVISH

1. Yes, it can be done, the term you're looking for is an 'uplift clause', where your buyer has to pay you a percentage of any uplift in value if they resell during a specified length of term.

2. The other option is to separate off one or more small patches of the garden and retain ownership, these are known as 'ransom strips', as they can make redevelopment difficult without the developer having to buy them from you. There is no fundamental reason a buyer would have difficulties with their mortgage if this was done, it's not uncommon for people to retain parts of garden for all sorts of reasons.

3. I know you didn't ask this question, but I'm not sure of the wisdom of selling in the UK to buy in Aus at the moment....

-UK property is just past the bottom of the cycle and about to head up rapidly over the next few years.

-Aus property is looking a lot shakier being near the top of the cycle and vulnerable to falls, particularly with the mining boom and China slowing and unemployment rising.

-I'm not saying Aus will necessarily crash hard, but I'd rather suspect the Aussie economy will struggle and the RBA will continue a low (and falling) rate policy for several years. The Aussie dollar is already falling, and will very probably continue to do so.

-Whilst the UK economy looks likely to continue recovering more strongly than previously expected, and the pound strengthen against the AUS$ as a result.

So between the combination of prices rising here, while stagnating or perhaps even falling slightly in Aus, and the pound strengthening against the dollar at the same time, you could end up being as much as 25% better off in Aussie dollar terms if you delay selling for another couple of years than you would be today.

It's a punt, I know, but it looks like a fairly likely result to me..... Sufficiently so that I've recently taken a rather large financial position on precisely that outcome.

G_M

Seems a perfectly sensible question to ask - not greedy or the like at all.

You should be able to weed out the useful replies from the chaff OP.....

duchy

Liz23 wrote: »

Thank you all for your very helpful advice. I guess I must have come across as a money grabbing so-and-so, but I was only asking the question. I'm actually quite a nice person, but was advised by a real estate guy here to look in to it, maybe it's not such a problem here.
.

Mmmm

This is a guy who hopes you'll buy from him ?

Unless he has a lot of experience in the UK market he may not realise all the implications as no doubt both legal and tax issues will vary between countries ....not to mention the extra costs a solicitor may bung on due to the international nature of the transaction.

I'm trying to think who would be your target market if the house is actually right on the M25 ...buy to let presumeably ? I'm from that part of the world myself and the combination of road noise and extra costs/issues with buyers getting mortgages if I wanted to sell in the event a developer never made an attractive enough offer (or even with all the talk of increasing the lanes possibly compulsory purchase) would be too many variables for me to consider it a good investment.

As the market is on the up now -I think in your shoes I'd wait a couple of years and sell outright- especially if the intention is to buy in Australia which seems to be topping out at present.

I'd think about ...who is my market and what barriers would they perceive to making a good offer and go from there if you really feel now is the time to sell (acknowledging that the best possible return isn't the only aspect when "managing" a property from a distance)

Mallotum_X

The London property market does seem to be hotting up again. How feasible would it be to hold on a while longer and see what happens or do you need to get your investment in Australia asap?

Personally I would hold on and review in the Spring.