When a seller inherited a substantial portfolio, he turned to auction as a speedy solution to his Inheritance Tax challenge.
A large property portfolio can be a great way to generate a profitable income, but when inherited, a generous portfolio can also become difficult to manage.
With Inheritance Tax charged at 40% over the £325,000 threshold and daily interest of 7.75% applying after the first six months, speed and certainty are crucial. This was definitely the case for our seller, who turned to auction after becoming frustrated with the lengthy process of private treaty sales.
The limits of private treaty
The seller’s portfolio was made up of a mix tenanted properties, some of which were listed. Most were also in need of some renovation in order to reach their full potential, which made them a tricky proposition for private treaty sales. “We sold several properties via the conventional route, but they took a long time,” commented the seller.
Other sales failed to even reach the finish line. After 10 months of back-and-forth, a buyer dropped out of the sale of Knotty Kott cottage, a Grade II listed property. “In my opinion, the private treaty approach is a problematic on many levels and is extremely slow,” commented the seller.
As the Inheritance Tax’s interest began to accrue, another solution was clearly needed.
A faster way to sell
The seller then began working with Auction House East Anglia through their chosen agents, Musker McIntyre and Temple Wicks. Speed, certainty and set timescales gave the process immediate appeal: “In the auction we have a defined completion date and a certain sale – or a 10% deposit if the buyer drops out,” the seller said. “You can also have the money in your account in around a month.”
The ability to sell properties with tenants in situ was another major advantage, removing the need for eviction and further delays.
Successful sales
Over the following 18 months, multiple properties have been sold in Auction House East Anglia events.
Knotty Kott cottage, which was left unsold by private treaty, now has a new owner. Hobbers Cottage in Pulham Market achieved a total of £111,000 under the hammer, while 1, 2 & 3 White Horse Common Cottages in North Walsham were sold as a combined lot before the auction even began.
“The Auction House East Anglia team have been straightforward, friendly, professional and fast,” commented the seller. “They provided good input on sales strategy and did some excellent marketing of the properties.”
The team also went above and beyond to provide extra support with a difficult situation. “We had one particular property with challenging tenants, but Jenny Austen dealt with them very professionally and sold the property at a price beyond my expectations,” said the seller.
Got a complex portfolio to sell?
For this seller, auction provided a dependable and quick route to sale, helping him to manage his inheritance. “I would recommend them to others, and I have some future projects that almost certainly will be sold via Auction House East Anglia,” he concluded.
To find out if Auction House East Anglia could support you with your property portfolio, get in touch with our helpful team by calling 01603 505100.
