BTL as a pension fund - why not?
Discussion
LucreLout said:
Well, I've demonstrated it with publicly available facts. You've disagreed based on .... nothing.
If flats are affordable, and I've shown that they are, then it cannot be prices holding the young back. If they are unwilling to buy a cheaper one bed and commute, then it is the excess of their aspirations over their ability which restrains them, no?
Why isn't it prices?If flats are affordable, and I've shown that they are, then it cannot be prices holding the young back. If they are unwilling to buy a cheaper one bed and commute, then it is the excess of their aspirations over their ability which restrains them, no?
What makes you think that it is UNWILLINGNESS that is stopping them buying the "cheaper" properties?
Have you done a "motivation" survey or is your assertion that "unwillingness" is the issue down to some personal gut feeling?
The fact that relatively cheaper properties exist does not explain WHY those properties are not being bought.
LucreLout said:
It wasn't a stupid question, but it sure was a stupid answer....
Unimproved value of land is subjective. Stuffing barrat boxes on greenbelt isn't an improvement.
Things you can point at... So no income taxes or ni. Just property taxes... If you don't see how that won't work, I can't help you. It would be an unmitigated economic disaster from which the country would not recover.
At present we tax productive activity heavily(employment income heaviest of all) and still offer limited tax breaks on BTL investment.Unimproved value of land is subjective. Stuffing barrat boxes on greenbelt isn't an improvement.
Things you can point at... So no income taxes or ni. Just property taxes... If you don't see how that won't work, I can't help you. It would be an unmitigated economic disaster from which the country would not recover.
Some sort of rebalancing is well overdue. I would start by removing any PP residence relief on a sale of a BTL. You rent it out all of the capital gain is taxable.
Edited by JagLover on Wednesday 26th November 16:37
LucreLout said:
Eric Mc said:
What type of downward expectation should those seeking a place to live make?
They should be looking at what they can afford, not what their baby boomer parents could afford. Those days are gone and they aren't coming back.If you can afford a one bed flat needing work, buy that and do the work. In a few years you'll have enough equity to buy something bigger.
The trouble with most of those howling about property is that due to their age, they're gen y or gen me me me, and they really do think they're worth it.
Unable to afford a 4 bed detached like mammy and daddy bought does not equate to a lack of access. It equates to unrealistic ambitions.
My dad was a factory worker. I work in the City. I managed to buy the same sort of house I grew up in because I studied hard, worked hard, and saved hard for a decade, and have a significantly higher income than my parents. I was lucky. If, however, you had middle class parents and you're middle class yourself, well, you'll have to aspire to the sort of property factory workers bought in your folks generation. That's life.
jdw1234 said:
I am not convinced that landlords have the ability to increase the rent to cover additional costs. Surely they are charging the max the market will stand now?
All current signs are that one the main driver of rents, demand, is due to fall-back or level off as immigration rules are tightened.Eric Mc said:
Why isn't it prices?
What makes you think that it is UNWILLINGNESS that is stopping them buying the "cheaper" properties?
Have you done a "motivation" survey or is your assertion that "unwillingness" is the issue down to some personal gut feeling?
The fact that relatively cheaper properties exist does not explain WHY those properties are not being bought.
It isn't prices because there are thousands of affordable properties near everywhere.What makes you think that it is UNWILLINGNESS that is stopping them buying the "cheaper" properties?
Have you done a "motivation" survey or is your assertion that "unwillingness" is the issue down to some personal gut feeling?
The fact that relatively cheaper properties exist does not explain WHY those properties are not being bought.
It isn't lending as mortgages are readily available to 20 somethings for a ppr.
So they can get a mortgage and they can afford repayments on somewhere. Pretty much that just leaves unwillingness.
The explanation for why the young don't buy one bed flats preferring to rent nicer places IS because they aspire to more. To more than they can afford to buy. I'd quite like a five bed detached but can't afford it so I bought what I could afford instead.
Price cannot be a deterrent if something is affordable. If the young want to prioritise iTat or catching Chlamydia in Faliraki, so be it, but you can only spend the cash once, then you go back to the hone you could afford.
JagLover said:
At present we tax productivity activity heavily(employment income heaviest of all) and still offer limited tax breaks on BTL investment.
Some sort of rebalancing is well overdue. I would start by removing any PP residence relief on a sale of a BTL. You rent it out all of the capital gain is taxable.
If you view BTL as an investment, yes I agree. If you view it as a business, and many people hold rentals in a company, then its a business, and it should be taxed as any other business.Some sort of rebalancing is well overdue. I would start by removing any PP residence relief on a sale of a BTL. You rent it out all of the capital gain is taxable.
How would you tax someone that lived in a house for ten years, rented it out while working abroad for two, then lived in it for ten more? No cgt relief on any of it? Ok, but they'll never sell, instead they'll just rent it out and buy another. It won't achieve what I think you're trying to achieve.
LucreLout said:
Eric Mc said:
Why isn't it prices?
What makes you think that it is UNWILLINGNESS that is stopping them buying the "cheaper" properties?
Have you done a "motivation" survey or is your assertion that "unwillingness" is the issue down to some personal gut feeling?
The fact that relatively cheaper properties exist does not explain WHY those properties are not being bought.
It isn't prices because there are thousands of affordable properties near everywhere.What makes you think that it is UNWILLINGNESS that is stopping them buying the "cheaper" properties?
Have you done a "motivation" survey or is your assertion that "unwillingness" is the issue down to some personal gut feeling?
The fact that relatively cheaper properties exist does not explain WHY those properties are not being bought.
It isn't lending as mortgages are readily available to 20 somethings for a ppr.
So they can get a mortgage and they can afford repayments on somewhere. Pretty much that just leaves unwillingness.
The explanation for why the young don't buy one bed flats preferring to rent nicer places IS because they aspire to more. To more than they can afford to buy. I'd quite like a five bed detached but can't afford it so I bought what I could afford instead.
Price cannot be a deterrent if something is affordable. If the young want to prioritise iTat or catching Chlamydia in Faliraki, so be it, but you can only spend the cash once, then you go back to the hone you could afford.
jdw1234 said:
Just as long as boomers have the same opinion as to the public healthcare they will have access to. The generation funding it will be all tapped out on houses!
They'll just rely on the young and the public sector & unemployed client state voting in labour. Labour will just hock what's left of the country to splurge on the NHS, and you'll still foot the bill as national debt repayments.Crafty b
ds, those boomers 
BL Fanboy said:
What I'd like to see is a rule that says, "If you want to rent a property as an investment, please build it first yourself"
At least it'd provide builders with work for say 6-8 weeks and materials sales. Plus, there'd be +1 on the supply side.
I think its a little bit distasteful investing(read cornering a market)in a basic human need - shelter. A lifetimes of graft to line the pockets of Billy Bunters.
Just think it typifies where we as a nation have gone wrong.
Raise the rents to cover rising costs? Good luck with that.
Oh, and when you want out, just hope there's an orderly queue of young people willing and able to buy.
As a landlord I would happily build the houses I let. Its preferable to buying IMO. The problem is a lack of building land (believe me I'm looking)At least it'd provide builders with work for say 6-8 weeks and materials sales. Plus, there'd be +1 on the supply side.
I think its a little bit distasteful investing(read cornering a market)in a basic human need - shelter. A lifetimes of graft to line the pockets of Billy Bunters.
Just think it typifies where we as a nation have gone wrong.
Raise the rents to cover rising costs? Good luck with that.
Oh, and when you want out, just hope there's an orderly queue of young people willing and able to buy.
Why is it distasteful investing in a basic human need? What are your feelings on food, energy, clothing, water, sanitation etc. what about banks who loan mortgages? Your feelings are being swayed by the lack of cheap housing for those that want to buy. I've rented when I've wanted to rent, and I was glad someone was providing that service. If it was a choice then would you be unhappy? The issue is a lack of choice for some renters, not that people are providing a service.
As you can see from some of the posts on this and other threads, its not a huge cash cow for the owner, and it comes with some risk.
Edited by 98elise on Wednesday 26th November 17:33
jdw1234 said:
Are you sure it not that by the time they can save the required deposit (even adjusting for the odd £400 IPad or weeks holiday) they are 30 odd and might be thinking about kids and so a 1 bed flat isnt really suitable.
A 10% deposit would be about 12k so lets say they save £200 per month, they'll be done in 5 years. Yep, I'm pretty sure its not their soon to be kids that are the problem.I'm not saying buying somewhere doesn't require sacrifices. It always did and it always will, BTL or no.
LucreLout said:
Eric Mc said:
In actual fact, even the smaller, cheaper properties are beyond a lot of first timers - especially in the southern half of the country.
I think you are being far too callous and disingenuous in asserting that they want too much. From what I can see, an awful lot of them just want to be able to afford SOMETHING.
Nope.I think you are being far too callous and disingenuous in asserting that they want too much. From what I can see, an awful lot of them just want to be able to afford SOMETHING.
There are literally thousands of flats for sale within a commutable distance of London for £125k or less. Eminently doable for someone in their 20s.
They can have something, it just won't be what mammy and daddy have.
For 3 of those houses the local station is 3 miles away, and HS1 is 35 minutes to london, and normal services from 45 minutes.
Edited by 98elise on Wednesday 26th November 15:57
crankedup said:
I almost hardly dare suggest this! but wasn't it a certain P.M. named Thatcher that was such a strong advocate of buy your own home and sold Council housing stock. Expectations were truly stoked by such policies, our kids were indoctrinated through us to buy their own homes.
That was the start of it, but compared to what happened under Newlab was a walk in the park. Parking capital in assets is surely the sign of a dysfunctional system. This is the end point of all that credit, and a country that can't afford a standard of living it thinks it's entitled to. Even this week we committed to sending money abroad to help fight climate change, has the political elite got a death wish? 
We seem to have drifted off a bit since I asked the question, but all interesting stuff.
As a datapoint, I bought my first house in 1997 for £53k on a £14k graduate engineer salary, same house today is £160k, we're taking on engineering graduates at work at £22k. They can't do what I did by a long way.
Anyhoo, nothing in this thread screams don't do BTL. For sure, there's risks, but as as long term plan to bring in come income?
15 years ago the FTSE 100 was over 6k, but less than 7k, this year, its been over 6k, but less than 7k with a couple of massive dips along the way, suppose I invest my cash in the markets and plan to retire when a massive dip happens? I have to wait? Does look like other forms of investment are much better than BTL?
As a datapoint, I bought my first house in 1997 for £53k on a £14k graduate engineer salary, same house today is £160k, we're taking on engineering graduates at work at £22k. They can't do what I did by a long way.
Anyhoo, nothing in this thread screams don't do BTL. For sure, there's risks, but as as long term plan to bring in come income?
15 years ago the FTSE 100 was over 6k, but less than 7k, this year, its been over 6k, but less than 7k with a couple of massive dips along the way, suppose I invest my cash in the markets and plan to retire when a massive dip happens? I have to wait? Does look like other forms of investment are much better than BTL?
markcoznottz said:
crankedup said:
I almost hardly dare suggest this! but wasn't it a certain P.M. named Thatcher that was such a strong advocate of buy your own home and sold Council housing stock. Expectations were truly stoked by such policies, our kids were indoctrinated through us to buy their own homes.
That was the start of it, but compared to what happened under Newlab was a walk in the park. Parking capital in assets is surely the sign of a dysfunctional system. This is the end point of all that credit, and a country that can't afford a standard of living it thinks it's entitled to. Even this week we committed to sending money abroad to help fight climate change, has the political elite got a death wish? 
) and all manner of collectibles. For me its the Russian, Chinese money that has driven house prices in London which has seen the ripple out to the suburbs and beyond. Heck, we have some crazy prices in East Anglia now, but they don't sell now for crazy money.As for sending our money abroad, hope the next lot in power stop that malarkey.
LucreLout said:
edh said:
What a stupid question - I'll only tax things I can point at, OK?
I believe that we should be taxing the unimproved value of land and that it should be a significant part of the government's revenue, replacing existing transaction taxes on property, and reducing some taxes on income and consumption.
Grosvenor Estate would certainly be a big loser under LVT. Banks fuel property investment & it's time that UK investment was more productive.
It wasn't a stupid question, but it sure was a stupid answer....I believe that we should be taxing the unimproved value of land and that it should be a significant part of the government's revenue, replacing existing transaction taxes on property, and reducing some taxes on income and consumption.
Grosvenor Estate would certainly be a big loser under LVT. Banks fuel property investment & it's time that UK investment was more productive.
Unimproved value of land is subjective. Stuffing barrat boxes on greenbelt isn't an improvement.
Things you can point at... So no income taxes or ni. Just property taxes... If you don't see how that won't work, I can't help you. It would be an unmitigated economic disaster from which the country would not recover.
It's clear you don't understand LVT. Come back when you do and we can discuss it on another thread. Until then I can't help you. btw it has nothing to do with "stuffing barrat(sic) boxes on greenbelt".
"BTL as a pension fund - why not?"
It was clear to me in my 20's that Brown and his cronies saw the private sector pension pot as an irresistible piggy bank so BTL certainly my pension plan. I'd welcome a substantial drop in house prices to buy more. IMO biggest risk is a Labour envy tax on multiple home ownership or similar.
It was clear to me in my 20's that Brown and his cronies saw the private sector pension pot as an irresistible piggy bank so BTL certainly my pension plan. I'd welcome a substantial drop in house prices to buy more. IMO biggest risk is a Labour envy tax on multiple home ownership or similar.
Willy Nilly said:
OP, go see a financial adviser and get your retirement fund sorted out properly. It is madness to have all of your pot in one sector, you need to spread the risk around.
Personally I think people talk a lot of bks about how many billions of pounds they have made on property, conveniently forgetting interest (the price of the house has just about got to double to cover this), legal fees, stamp duty and any repairs and improvements they have made. They just say "I bought this house for £100,000 and now it's worth £200,000. Bully for you, what did it really cost? Most of the housing bubble is a self full filling prophecy and it is as though "home owners" (the banks normally really own them) have this divine right to make a pile off cash on a house purchase.
We have a property in the SE very near where EricMC is from. It's a 3 bed end of terrace that we lived in previously but my job relocated to the SW so did we. If we still lived there my wife would be on 15k a year more but our living costs would be significantly more than what they are now. When I compared the price of labour (such as gas engineer, tyre fitting at £20 per wheel!!! etc) to my native Wales I was told "it costs more to live here, hence everything costs more". I'd love to know what would happen if house prices in the area fell!
Anyway before I go off on a tangent!
In 3 years we have paid off £12k of the capital through the regular mortgage payments alone and similar properties are being sold at £30-40k more than they were at the time. Our expenses, tax, maintenance etc probably total around £3k maximum. We could never afford to buy bigger in the area as they increase by larger amounts again. To be honest I wouldn't want to live in the SE again but once we dispose of it and pay CGT we could afford an awesome place in the SW.
I wouldn't hesitate to recommend a BTL but it wouldn't be my only investment. There is an element of luck that you have some control over with tenants and the sums must add up to make it worth while.
OP, go see a financial adviser and get your retirement fund sorted out properly. It is madness to have all of your pot in one sector, you need to spread the risk around.
Personally I think people talk a lot of bks about how many billions of pounds they have made on property, conveniently forgetting interest (the price of the house has just about got to double to cover this), legal fees, stamp duty and any repairs and improvements they have made. They just say "I bought this house for £100,000 and now it's worth £200,000. Bully for you, what did it really cost? Most of the housing bubble is a self full filling prophecy and it is as though "home owners" (the banks normally really own them) have this divine right to make a pile off cash on a house purchase.
We have a property in the SE very near where EricMC is from. It's a 3 bed end of terrace that we lived in previously but my job relocated to the SW so did we. If we still lived there my wife would be on 15k a year more but our living costs would be significantly more than what they are now. When I compared the price of labour (such as gas engineer, tyre fitting at £20 per wheel!!! etc) to my native Wales I was told "it costs more to live here, hence everything costs more". I'd love to know what would happen if house prices in the area fell!
Anyway before I go off on a tangent!
In 3 years we have paid off £12k of the capital through the regular mortgage payments alone and similar properties are being sold at £30-40k more than they were at the time. Our expenses, tax, maintenance etc probably total around £3k maximum. We could never afford to buy bigger in the area as they increase by larger amounts again. To be honest I wouldn't want to live in the SE again but once we dispose of it and pay CGT we could afford an awesome place in the SW.
I wouldn't hesitate to recommend a BTL but it wouldn't be my only investment. There is an element of luck that you have some control over with tenants and the sums must add up to make it worth while.
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