Best initial listing price for my ex-rental property to sell before the budget?

Landlord Discussion
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Hi again

I am a landlord with a single property in London that is literally just about to be go on the market.

I know that this is a very tight deadline, but I would like to sell the house before the Autumn Budget at the end of October because of the potential capital gains tax changes on the ~180k increase over its purchase price of £205k.

The valuations from several estate agents were pretty consistent around the £380-390k mark. However, given the need for a very quick sale a couple of agents suggested that I should likely expect to only receive ~£365k.

Selling at a discount of £20k will effectively be a wash if the government IMMEDIATELY raises capital gains tax on property in the budget by 10% (to 28% basic, 34% higher & additional). However, it avoids the worst case scenario of the government immediately setting the CGT rates to the same level as income (20% basic, 40% higher, 45% additional) which would be an additional £10k in CGT.

Assuming the £365k estimate for a quick sale is correct, I was wondering what initial listing price would be best? The two options that the estate agent has suggested are

(i) Offers in excess of £350k. (This is the listing my estate agent is keener on.)

(ii) £375k.

As I would like to get £365k I am worried that an initial listing of “Offers in excess of £350k” might not work as it could be psychologically harder for potential buyers to go up by £15k to £365k from a base of £350k. However, I thought that a listing price of £375k might get people offering 10K less to get a bargain, that I could happily accept.

I was also thinking about the price points of

(iii) £375k or best offer. (If this even be done on property websites?)

(iv) £365k or £370k

so any feedback or advice would be be greatly appreciated.

Finally do people think it is even worth trying to sell so quickly given the discount I will have to give and the uncertainty as to how much and when CGT might go up?

Thanks all!

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Youd be very lucky to exchange contracts before November from a standing start now. You’d then face a double whammy of a reduced price and and increased CGT liability. In your situation I’d hang on. £10k extra is manageable. Im looking at a much bigger hit on mine if I cant get them through by then, but Im further down the road.

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David

That was one of the factors I was considering but didn’t want to make my initial post too long.
Namely, that if you set at “£350k or higher” and don’t manage to sell before the budget, it might look very odd to increase price to nearer the average valuation price of £380-390k.

In view of this, do you have any suggestions about what to do or what might be a good starting price?

Thanks!

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