Question 5 Anne Murray is planning to buy a property, in addition to the family home she and Henry own, for rental purposes She is considering a property in Swansea costing 215,000 She has savings of 75,000, which she will use as a deposit, but will need to borrow the remaining amount for the purchase She requests that you research and find a suitable buy to let mortgage for her She also wants to know what income she might expect to get as a return on her investment Local agents have estimated that the monthly rent may be 1,750 per month, with agents fees for managing the property being charged at 5 of the rent Work out for Anne an estimation of the relevant costs of renting the property and the net rental income that she might expect to get Anne has estimates for some of the other costs she will incur as follows Repairs and maintenance per year 800 Property insurance per year 275 Surveyors fees 650 Solicitors conveyancing fees 4,300 Gardener 780 Required Find a real buy to let mortgage for Anne and outline the details to her 3 marks What tax relief is there on the mortgage payments that Anne will be making 2 marks Calculate the net annual income that Anne can expect from her rental property (ignoring capital costs) Marks are awarded for using the recommended layout 4 marks Calculate the return on the income from her investment (ROI) 1 mark Calculate the SDLT that Anne can expect to pay on this purchase 2 marks Total 12 marks Question 6 Rachel and Mike are married They are both retired and Mikes sister Donna is living with them as she is not well Mike dies, but Donna now needs 24 hour care, so Rachel continues to care for her Although Donna never married herself, she has a daughter Gina Gina resents the fact that she did not know her father and is not in contact with her mother Donna dies without leaving a will Who will inherit Why 2 marks Harveys father recently died in a car accident and Harvey inherited his fathers estate His parents had separated when he was small and, when his mother remarried, he was brought up by his paternal grandparents because his father travelled a lot for work His grandparents have been like parents to him If Harvey does not write a will, who will inherit his estate 2 marks Louis and Edith both had unhappy marriages and are divorced They are now living together, but do not want to marry for some time yet Louis has three children, a boy and two girls, and Edith has two younger boys Louis has discovered that he has terminal cancer, and he has not made a will Who will inherit his estate under intestacy rules Give your reasons 2 marks In (c) above, all five children live together in the family home, and Louis is the main breadwinner If he dies without making a will, what remedies does Edith have for her and her children Explain the remedy and the possible outcomes

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Question 5 Anne Murray is planning to buy a property, in addition to the family home she and Henry own, for rental purposes. She is

Question 5

Anne Murray is planning to buy a property, in addition to the family home she and Henry own, for rental purposes. She is considering a property in Swansea costing 215,000. She has savings of 75,000, which she will use as a deposit, but will need to borrow the remaining amount for the purchase. She requests that you research and find a suitable buy-to-let mortgage for her.

She also wants to know what income she might expect to get as a return on her investment. Local agents have estimated that the monthly rent may be 1,750 per month, with agents fees for managing the property being charged at 5% of the rent.

Work out for Anne an estimation of the relevant costs of renting the property and the net rental income that she might expect to get. Anne has estimates for some of the other costs she will incur as follows:

Repairs and maintenance per year	800
Property insurance per year	275
Surveyors fees	650
Solicitors conveyancing fees	4,300
Gardener	780

Required:

Find a real buy-to-let mortgage for Anne and outline the details to her.

3 marks

What tax relief is there on the mortgage payments that Anne will be making?

2 marks

Calculate the net annual income that Anne can expect from her rental property (ignoring capital costs). Marks are awarded for using the recommended layout. 4 marks

Calculate the return on the income from her investment (ROI). 1 mark

Calculate the SDLT that Anne can expect to pay on this purchase. 2 marks

Total 12 marks

Question 6

Rachel and Mike are married. They are both retired and Mikes sister Donna is living with them as she is not well. Mike dies, but Donna now needs 24-hour care, so Rachel continues to care for her. Although Donna never married herself, she has a daughter Gina. Gina resents the fact that she did not know her father and is not in contact with her mother. Donna dies without leaving a will. Who will inherit? Why? 2 marks
Harveys father recently died in a car accident and Harvey inherited his fathers estate. His parents had separated when he was small and, when his mother remarried, he was brought up by his paternal grandparents because his father travelled a lot for work. His grandparents have been like parents to him. If Harvey does not write a will, who will inherit his estate? 2 marks
Louis and Edith both had unhappy marriages and are divorced. They are now living together, but do not want to marry for some time yet. Louis has three children, a boy and two girls, and Edith has two younger boys. Louis has discovered that he has terminal cancer, and he has not made a will. Who will inherit his estate under intestacy rules? Give your reasons. 2 marks

In (c) above, all five children live together in the family home, and Louis is the main breadwinner. If he dies without making a will, what remedies does Edith have for her and her children? Explain the remedy and the possible outcomes.