A couple of weeks ago I mentioned a deal that we had agreed, which was a freehold pub in central London, Shepherd’s Bush in fact. Prior to this I wrote an article titled The Indians Are Coming, which was regarding the rising interest in UK property by Indians based in India, driven by the current geopolitical and economic landscape between the two countries.
The two articles have now been connected. The pub was presented to a group from India one afternoon last week, and the matter was placed in the lawyer’s hands there and then. The property was exchanged on the same day, at about 9pm. Kudos to the lawyers who worked hard to get this done on the same day. It demonstrates where there’s a will, there’s a way. Deals can be done very quickly when there is a focus. If you give lawyers too much string they will use it. The threat of other buyers at higher prices, ready to execute the deal, always helps to fine tune the will.
The planning team have been appointed and are in full flow to get this deal over the line in terms of planning.
We successfully completed a similar pub deal around the corner from this site. That pub was called The Underbrook, and was bought as a ‘going concern’ as it was a functioning pub when we purchased it. This means it did not attract VAT.
That deal was done at £1.25m and sold in just under nine months later for £1.75m. It went cheap looking back, but it allowed our client to move on to other deals.
This property we have just exchanged on, consists of 4,300 sq. ft., and it is not listed, which means it can be knocked down and rebuilt.
With a development site the square footage is less important than the listing of the building and the floor plate.
With a knock down and rebuild there are tax advantages, and you will get a better proportioned product to resell or rent.
Currently, we are exploring whether it is worth spending some money to do a quick internal refurb, so the property can be rented on a room by room basis whilst the planning is coming through. This should be allowed under the current planning the building has. This will turn the project into two phases, with both running in parallel from the start.
When you have an income coming in, you can afford to be a little more relaxed if the planning takes longer than expected, or requires further tweaks. An empty building not only doesn't bring in income, it actually costs money, from insurance, security and council taxes etc. This is a drain, and the longer it takes the deeper the hole you’re digging.
The building was purchased for £1.75m which represents a purchase price of £405 per sq. ft., in an area where the square foot price floats around the £1,000 per sq. ft. mark. Shepherd’s Bush is a strong area, where property prices have increased by over 13% over the last year.
We are confident this project will yield a strong return for our investors.
AGONY AGENT IS HERE TO HELP!
On the run up to Halloween I thought I would share a landlord horror story with you, so you can either learn from this, or relax with the knowledge that your tenants are not that bad!
A landlord lets a flat to a young lady who only pays the first month's rent. She then starts behaving badly, she has loud parties and the neighbours complain. Her boyfriend causes a disturbance at the property on several occasions and kicks one of the apartment doors in. The police are called in several times and visit frequently. The landlord visits several times to ask for the rent. He then follows standard procedure and he tells her that unless she pays the rent and behaves properly she will have to go. On at least one occasion he loses his temper and shouts at her (this should never be done; always, no matter what, keep your cool).
One week he finds that she is not at the property. He continues to visit the property every few days but she is never there. After about three weeks he suspects that she has left and uses his keys to gain entry. He finds the flat is in a filthy condition and it is obvious that no-one has been there for some time. It is full of rubbish, and there is mouldy food in the kitchen. He also finds some of her personal things, such as a purse with £12 in it, clothes in the wardrobe and in the chest of drawers in the bedroom, and some videos in the lounge. Despite this, he decides that she has left. So, he bags up all the items left in the property, and changes the locks. None of the items left in the property are saleable, so, he dumps them, (apart from the money in the purse which he takes against the rent arrears). He redecorates the flat, and then re-lets it to another tenant. He is relieved that he didn’t have to go through the hassle of court action to get the previous tenant out.
Two months later the landlord learns of a scene at the flat when the previous tenant tries to gain entry and is refused by the new tenant! The landlord is then served with a county court summons for damages for harassment and unlawful eviction together with a claim for compensation for her property, and a notice stating that she has been awarded legal aid. He loses the case and is ordered to pay compensation to the tenant, although the sum is reduced to take into account her unpaid rent and damage to the flat. He also has to pay her legal costs, which run into several thousand pounds, as well as his own solicitor’s bill.
It is very risky to repossess a property without getting a court order first, even if you think the tenant has deserted the property.
Cambridge Square, London W2 Purchase Price: £799,000
l This sought after development stands moments from Hyde Park.
l Bright and spacious two double bedrooms, two bathrooms, modern fitted kitchen and ample storage space.
l Offered with long lease, 24-hour concierge and communal gardens.
l Expected resale is £1,000,000.
Call us now for more information!