Compulsory purchase pending - any tips? Any DOs and DON'ts? Legal firms to recommend?

E22

Hi,

We own a leasehold tenanted property which has now been included into a Council's regeneration programme and is due for demolition. While I may strongly disagree with the cabinet decision to do so and I really do no wish to loose my very well located flat, I understand that I will need to deal with this somehow.
As a non-resident leaseholder, neither me, nor my tenants seem to have many rights or guarantees. Has anyone been though this process? Can anyone share some tips of DO's and DON'Ts?
I am also looking for a legal firm to help me navigate the process. Can anyone recommend one?

Thank you!

Guest101

Have you been offered a reasonable sum of compensation?

E22

Not yet. We have not started negotiations yet. The current standard offer stands at 7.5% compensation based on evaluation. I am sure there will later be amount inserted such as: 'up to the value of £53000'.
We have received letters 'expression of interest' for the council to buy back the properties. I would prefer to have a new one in the new development - but the council says they will be 60% more expensive.

E22

PS The flat is in a very popular and central London location.

Guest101

I'd suggest this:


You are a LL, you aren't going to get an income from the new development for a few years, even if they offered you the property.


7.5% over valuation, given the market in London will probably (after any mortgage) still leave you enough to buy outright in the north.


The rent may be lower but with no repayment your overall income would be higher (even after tax I suspect)


There are several medium sized towns (mine included) where LLs letting to students get a 8-10% yield.

daveyjp

You don't need a legal firm, you need a surveyor well versed in CPO procedures. Its a valid cost which you can claim from the acquiring authority.

Its not that complicated as it is governed by well established rules. However do not accept a valuation plus X%, its lazy and may not recompense you fully.

E22

Thank you!
We have minuscule repayment on this one at the moment too. While I would prefer to stay in the area, I can see what this compulsory purchase will price me out of the local market.
Any locations in the north to recommend? All our properties are in close proximity next to each other. We have not considered other parts of the country yet. It might be an option, though.

E22

I assume, I have to agree to the purchase first. Then receive councils evaluation and only then look for a surveyor.
Or should I seek one now to see me though the process?

gingercordial

When considering the compensation you're being offered, make sure you factor in that if you want to replace this rental property with the proceeds of the CPO you will be paying the additional 3% stamp duty, since following the transaction you will own more than one property and you are not replacing your main residence. The compensation offer "should" therefore be higher than it would have been before the SDLT changes.

(I'm assuming you also own the property you live in, but correct me if I'm wrong.)

Guest101

E22 wrote: »

Thank you!
We have minuscule repayment on this one at the moment too. While I would prefer to stay in the area, I can see what this compulsory purchase will price me out of the local market.
Any locations in the north to recommend? All our properties are in close proximity next to each other. We have not considered other parts of the country yet. It might be an option, though.

I live in Lancaster, which has:


2 Universities (1 in the top 10 UK)
Hospital
Nearby power station
Decent business portfolio
Low crime
Good education levels
Entertainment is limited,
M6 on 2 junctions, and on the westcoast mainline so easy commute to Manchester - many of my friends do this


House prices aren't extortionate either.


What you get is a lot of young professionals straight out of university or students, alternatively you have NHS locum staff looking to rent, as well as families setting up home.


It's a very diverse market and typically:


Families are paying £550-700 on average
Students pay £300-400 PM (each) but has the usual pitfalls and you need a 5bed+ property
or professionals happy to pay £700+, but tend to move on so there's some turnover.


If you are on rightmove look south of the Lune river.

E22

I think I can claim the stamp duty arising from buying a replacement property.