Deleted User 298457
Deleted User 298457
Yeah, he knows the owner and he said he'll do him a deal.
Budget 2021: Mortgage guarantee to help buyers with 5% deposit
- Thread starter dowie
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Soldato
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CGT is already aplicable when selling a second home or a BTL isn't it?
Yup it is. Can be avoided on individual sales by using a ltd company to hold your properties though, ditto to still being able to deduct mortgage interest.
Ha yeh you have to include luck, but as for scam saying no work done we have put in months, years of work, the garden was just a jungle, granny type decor ect, but if the house had looked like it is now it would have been sold, it was reduced a hell of a lot due to lack of interest, we spent 24 hours a day living in a car searching for something, (sold up in Yorkshire) did Wales Devon, thought we couldn't afford here but saw quite Afew before dropping on thisAye we’ve all seen your hammock
, seriously tho...looks a great place but it’s a bit of a one off situation for the figures you’ve mentioned
No. If landlords could have added £200 to the rent, they'd already be doing that. Landlords always charge the maximum rent that the market is willing to pay. When they took away some of the landlord tax allowances, everyone said it will just be passed to the renter (like you do now), and that rents will suddenly jump by 20%, it didn't, because landlords were already charging tenants the maximum possible anyway.
You can also regulate the rental market to make sure it doesn't happen, like many other countries do.
It's a residence tax, not a property tax. They're different things. You can have one or the other, neither, or both at the same time.
If me wanting a £500k house as a FTP caused that much controversy last time, I think some minds will be blown by the idea of a £1mn+ first house
They can process it through an LTD company and get a reduced CGT rate.
Soldato
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Just on this point as you covered quite a bit in that post
Surely there are plenty of sane reasons to downsize - even assuming you stayed in the same area?
- You might be able to go mortgage free if you still had some outstanding balance.
- You could release a lot of money if you'd cleared your mortgage.
- You could reduce your bills / council tax.
Deleted User 298457
Deleted User 298457
Maybe we tackle the even more sickening market which is equity release?Just on this point as you covered quite a bit in that post
Surely there are plenty of sane reasons to downsize - even assuming you stayed in the same area?
- You might be able to go mortgage free if you still had some outstanding balance.
- You could release a lot of money if you'd cleared your mortgage.
- You could reduce your bills / council tax.
It's a good concept, but right now it's a predatory industry which needs to be massively regulated and overhauled.
Soldato
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This isn't as trivial as it sounds unless you had the properties in a company from the get go I don't think as legally property must be sold at the market value from the individual to the company, so you could end up paying:
- SDLT at the higher rate (company doesn't get a discount for its first purchase).
- CGT for you when you sell the property to the company at the market rate.
- Cost of exiting your personal mortgage early
- Companies normally pay a higher rate for mortgages than individuals.
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Of course it will. Your ignoring the fact that by removing the council tax burden from the tenant they suddenly have the ability to pay more rent.
Those tax changes has transitional arrangements over a number of years and are only just kicking in fully now. Any impacts on rent prices (if there were any) would have been gradual and spread over a number of years. They also only really impacted landlords who were highly leveraged on their portfolio. In reality a few impacted landlords will have left the market and left it to more wealthy landlords to crack on and make even more money than they did before.
What that tax change really does is create a new barrier for entry for people who already don’t have a large amount of wealth and are relying on finance to do it. But existing, established landlords don’t have to contend with it as they’ll not be heavily financed.
Thats just semantics, badge it what you like. At the end of the day and the point I was making is that there is already a tax on U.K. property based on its value. It works differently but ultimately taxes bigger/more valuable properties more than smaller cheaper ones less. Someone pays it regardless of if the property is occupied or not.
Expecting house prices to drop is a bit optimistic, at think at best we can just slow down growth.
Now could be a good time to do it though as it could tie in with the current need of growing the economy to reduce the impact of our national debt, like we did after WW2. Add on to that a massive building program of both private and social housing which could boost the economy / provide new jobs and slow down rising house prices by increasing supply.
I'm simplifying it way too much but essentially we slow down house price growth by building more homes while focusing on increasing peoples wages and at some point it should start to become more accessible again. Home owners wouldn't have the ridiculous increases in value but it shouldn't drop below the mortgage value.
Now could be a good time to do it though as it could tie in with the current need of growing the economy to reduce the impact of our national debt, like we did after WW2. Add on to that a massive building program of both private and social housing which could boost the economy / provide new jobs and slow down rising house prices by increasing supply.
I'm simplifying it way too much but essentially we slow down house price growth by building more homes while focusing on increasing peoples wages and at some point it should start to become more accessible again. Home owners wouldn't have the ridiculous increases in value but it shouldn't drop below the mortgage value.
I agree with you and the same things were said after the 2008 crash - allow prices to stagnate and allow inflation to erode their value. Unfortunately the politicians are too embroiled in the property markets to make the changes that are needed and ever-increasing prices benefits their voter base.
If you want to stay away from semantics, look at this. The annual tax revenue that the US raises from properties is about 2% of their total property wealth. This is similar in other major European countries, UK sits among the lowest, at about 0.5%. We could raise £100bn a year if we brought our levels of property/residence taxation on par with other European countries, or the US. That £100bn can then be invested in council and affordable housing, building hundreds of thousands of houses every year.
In some areas of the UK, second homes get a massive 50% discount on council tax for example. In that way, it's regressive. People with more property wealth, pay less. People with no property wealth at all, still pay more.
Yeah, expecting any decline is too optimistic, and expecting even slow growth is optimistic. The government does everything in their power to inflate the prices as much as possible, as fast as possible.
If we continue the trend of the last 10 years, median property will be £500k in 15 years, and £1mn in 30 years. Scary? yes. Unrealistic? No.
Wages have not grown at all in the last 10 years, they're still down in real terms. The reality is, this country has preferred to increase its property values over long-term infrastructure investments, education and innovation, which is where wage growth comes from. Wages will never grow again without a massive, massive attitude adjustment and political realignment.
The economic theory of the UK is: we ask younger families to work more hours, pay a higher percentage of their income for housing, live a worse life, so that we can artificially inflate the property prices, and therefore older people can spend more and we pretend like we're having economic growth.
I wonder if property wasn't such a must have what people would do with all that cash?
Imagine if property wasn't seen as a wealth store. It might even make people enjoy life a bit more rather than piling it all I to property locked away out of the economy.
Sure people might put it into S&S, but I doubt it to the degree it's in property
Properry is easy for anyone to understand.. Everyone says 'it'll go up over time' even after dips. If this wasn't the general view life would be quite different. Fomo would be less too.
I bet people would enjoy life a bit more.
Although that would probably mean buying crap.
But imagine not having to leave an inheritance of large proportion because the property market was accessible?
For many people property, be it mortgage, or leaving something to the kids.. Dictates far.too much of our lives.
Imagine if property wasn't seen as a wealth store. It might even make people enjoy life a bit more rather than piling it all I to property locked away out of the economy.
Sure people might put it into S&S, but I doubt it to the degree it's in property
Properry is easy for anyone to understand.. Everyone says 'it'll go up over time' even after dips. If this wasn't the general view life would be quite different. Fomo would be less too.
I bet people would enjoy life a bit more.
Although that would probably mean buying crap.
But imagine not having to leave an inheritance of large proportion because the property market was accessible?
For many people property, be it mortgage, or leaving something to the kids.. Dictates far.too much of our lives.
That wouldn't really be a vote winner for anyone tho.
Some of us want house prices to fall (relative to wages), the others are looking for the largest appreciation they can get.
I'm not sure who is looking for growth, just a bit slower than today (but still probably outpacing wage growth).
And frankly I don't think the UK govt will do anything meaningful like banning foreign/corporate ownership. Just don't see any of them being motivated to do it.
Whatever action they do take is always designed to keep the bubble inflating. If it slows it won't be due to govt action.
As much as I’m not exactly into a direct value tax, I’d absolutely agree that property prices need to stagnate. A sharp drop would be very detrimental to a lot of people, far more than it benefits. But a sustained period of little or no growth would be fine for most people. It only really hurts those invested in property solely to make a return. There wouldn’t really be anything stopping them divesting and taking they money elsewhere.
I’d much sooner be spending my money in the actual economy rather than paying back the bank for the money they lent me for what will be most of my working adult life.
The real issue is that the horse bolted 30 years ago and no one thought to catch it and instead they gave it some energy drink. But taking it out with a guided missile as some people are suggesting isn’t the answer either.
I’d much sooner be spending my money in the actual economy rather than paying back the bank for the money they lent me for what will be most of my working adult life.
The real issue is that the horse bolted 30 years ago and no one thought to catch it and instead they gave it some energy drink. But taking it out with a guided missile as some people are suggesting isn’t the answer either.
Soldato
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All you need if you want house prices to go down is to raise interest rates.
https://www.economicshelp.org/wp-content/uploads/2015/09/mortgage-payments-as-percent.png
If you can find data going back more years you will see that while house prices are higher, the only thing that matters is how much do you pay as a % of your income to a mortgage.
If you find yourself in the position of not being able to save up for a deposit. You are **** either way.
If interest rates skyrocket, and house prices crash, you wont be able to afford the mortgage repayments because the interest will be too much, and your only option is a very high LTV.
If however you are able to save up a deposit of 25% now. and then interest rates spike, that might be a 40 or 50% deposit, meaning much less interest. And working out much much better for you.
Soldato
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Agree house prices are too high - but equally wages are too low for many. Even with slower growth in house prices or even no growth - wages need to increase significantly to make property more affordable.
I'm enjoying Steph's packed lunch every day (kill me now...)You need to get yourself a good dose of daytime TV
I'd love to know his answer to this.
I think you're in the minority. Surely most people add/do anything to their home primarily because they think it needs it. Adding value is a secondary benefit, unles you live in daytime telly world and are obsessed with Kirsty and Phil type nonsense?
You raise a fair point, happy to admit that. But that's why I think a tax on a proportion of the 'profit' (once said profit is over XX%) would alleviate this. And you also need to think long term, that if homeowners are taxed on the sale price then prices simply wouldn't bubble up as much as they do now.
Yeah, you're right. I just don't see many older homeowners downsizing. They're all rich enough anyway without needing to bother. Unless you count my aforementioned neighbours that made £900k on their place, they bought a flat in South Kensington apparently which I guess counts as downsizing?
(*They also have a house in Cornwall so it probably doesn't count )I'm enjoying Steph's packed lunch every day (kill me now...)
I'd love to know his answer to this.
I think you're in the minority. Surely most people add/do anything to their home primarily because they think it needs it. Adding value is a secondary benefit, unles you live in daytime telly world and are obsessed with Kirsty and Phil type nonsense?
You raise a fair point, happy to admit that. But that's why I think a tax on a proportion of the 'profit' (once said profit is over XX%) would alleviate this. And you also need to think long term, that if homeowners are taxed on the sale price then prices simply wouldn't bubble up as much as they do now.
Yeah, you're right. I just don't see many older homeowners downsizing. They're all rich enough anyway without needing to bother. Unless you count my aforementioned neighbours that made £900k on their place, they bought a flat in South Kensington apparently which I guess counts as downsizing?
I very much doubt people who are new buyers on the housing market would spend 10k to 20k on an extension if it added no value.