Do you think someone could get 4x their (joint) salary to buy shares at 1-3%?
Rant - London rent prices...
- Thread starter wire-screw
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Do you think someone could get 4x their (joint) salary to buy shares at 1-3%?
No you cant. Of course if you are somebody like Prince Charles banks will loan you £10m at zero interest!
Always annoyed me that. If bank loaned me £10m at zero interest Im pretty sure I could make a decent return out of it.
the housing example given was someone buying a 500k house with a 250k deposit
so what you want to ask is can someone with 250k buy 500k worth of shares
the answer is yes they can essentially, quite easily
though the answer to your question is also yes assuming they had a big enough deposit (margin)
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You don't actually need to buy shares like that to get leverage.
Derivatives let you increase the volatility you get with leverage.
Not so sure. People then don't sell, and building on houses stops.
Without moving onto the wider impacts on the economy...
Deleted member 66701
Deleted member 66701
We need to stop using property as a way to make money and start treating them as homes instead.
The only people that should make money from houses are the builders.
The only people that should make money from houses are the builders.
What about the people who renovate property?
What about the people catering for demand for short term accommodation? Every fresh grad moving to London has to either buy a place or be allocated some council owned accommodation because only 'the builders' can make money from property?
What about the people catering for demand for short term accommodation? Every fresh grad moving to London has to either buy a place or be allocated some council owned accommodation because only 'the builders' can make money from property?
A crash will never happen when demand outstrips supply. Any new development gets snapped up before they even make it on to the market.
http://www.theguardian.com/money/2015/jul/13/canary-wharf-flats-maine-tower-overseas-buyers
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I nearly own my place outright, bought back in 1997. If the market crashed back to the level I purchased at I would be very happy as a 4 bed detached back then was only £25-30k more than my 3 bed semi iirc. As it stands the price difference is over £100k at the present time.
Obviously there are points in the scale that would benefit. Like you. But if the market crashes those who were first time buyers wouldn't sell. I.e. Those in their first house. As it would be probably less then what they bought it for. So where do the next wave of first time buyers get in at? Possibly the next level of houses up that are bigger and now at the same price the houses previous FTB bought? Well that all depends if those people are selling... Because there definitely won't be any new houses built during a crash. Well.. Far and few between.
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I purchased a far nicer place than people a few years older than me in a similar career etc, they got stuck in negative equity on flats, one bed places etc. Didn't stop 1st time buyers from buying the smaller places as lots of places got repo'ed from the over extended and bought by people who wouldn't have otherwise bought i.e. those who might have rented due to being priced out in the boom period.
I can't say I have much sympathy for people who panicked and paid silly prices for inappropriate property in the late 80s boom, no one forces people to get a mortgage. Caveat emptor
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We don't need a big crash, we just need an extended period (10+ years) of flat prices so people get it out of their head that homes exist to make a quick buck on.
A stable market is best for investment. When builders can be confident that 2-3 years down the line the market will be broadly the same they can make safe decisions about investment. When the market swings from 10%+ PA to crash all the time it makes if very hard to have a sustainable home building programme.
Kill off property market speculation, just regulate the **** out of BTL. Rental controls, more tenant protections. Make life as a tenant easier for people as it's increasingly something people do long-term. Do something about the big money foreign speculators, big capital gains tax or the like.
Oh and sort out planning. **** the NIMBYS, we need to build more. Fast track affordable housing sites, especially away from London.
A stable market is best for investment. When builders can be confident that 2-3 years down the line the market will be broadly the same they can make safe decisions about investment. When the market swings from 10%+ PA to crash all the time it makes if very hard to have a sustainable home building programme.
Kill off property market speculation, just regulate the **** out of BTL. Rental controls, more tenant protections. Make life as a tenant easier for people as it's increasingly something people do long-term. Do something about the big money foreign speculators, big capital gains tax or the like.
Oh and sort out planning. **** the NIMBYS, we need to build more. Fast track affordable housing sites, especially away from London.
That's actually very clever, never thought of that!
There's a lovely three bedroom penthouse flat above me that sold for I think around 400k in 2010. I've never seen a single person in the lift go up to it in all the years I've lived there. Now see it on the market for 850k!
With returns like that would have to be a big tax hit to slow it down. They didn't even let it in the mean time!
Slight side note but do wonder what % of the foreign money being used to buy property is a little bit dodge? Laundering money criminals often accept a % loss but here they could be doubling up!
Pure hypothetical conjecture on my part. Have no idea if it's common or not.
after seeing the documentary on channel 4 with the guy pretending to be buying a flat with Government russian money in cash and obviously wanted for nobody to know, the estate agents didnt bat an eyelid and was still desperate for him to buy one.
So yes I would expect there is a booming market is money laundering and property in London.
So yes I would expect there is a booming market is money laundering and property in London.
well there was one loophole that has been tightened up on slightly - you could own a company through an offshore company then just sell the company on... the Tories have whacked up the stamp duty quite a bit for buying a house through a company
still there is not much people can do re: the money laundering aspect - Russian A can still sell his company in [carribean island] to Russian B thereby transferring ownership of his mayfair mansion without the ownership actually transferring from the UK's perspective since it is still owned by the same overseas company
still there is not much people can do re: the money laundering aspect - Russian A can still sell his company in [carribean island] to Russian B thereby transferring ownership of his mayfair mansion without the ownership actually transferring from the UK's perspective since it is still owned by the same overseas company
Pretty sure the cost of building houses has not risen in line with house selling prices...
Builders profit big time at the moment with the inflated demand, new 1 bed flats in Tooting (of all places) going for £325k!
