Autumn Statement 2015
Discussion
JagLover said:
This
In principle there isn't anything particularly wrong about the government subsidising the wages of low earners. The problem is the system used to do so and the way it both subsidises lifestyle choices and discourages working more than a set number of hours in a job with few opportunities for progression.
And it's very, very hard to square this circle.In principle there isn't anything particularly wrong about the government subsidising the wages of low earners. The problem is the system used to do so and the way it both subsidises lifestyle choices and discourages working more than a set number of hours in a job with few opportunities for progression.
Some people will use the low paying job as a "leg up" to establishing a productive and better rewarded career.
Others will be happy to subsist on a low wage and make up the balance from government hand outs.
Trying to create tax and benefit policies that encourage the former whilst at the same time discouraging the latter is not at all easy.
Employers will, of course, exploit the situation, whatever it is, to their advantage.
The new stamp duty tax is great news for landlords.
1. Fewer people could enter the sector so rents will go up
2. The government are taxing it because they feel they can as house prices always rise and a small extra amount of stamp duty may cost 6 months rent but so what
3. Stamp duty will only go up to roughly where it was last year - don't forget stamp duty was cut recently.
4. It's clear the government knows housing is only ever going up
5. People will push through purchases before April pushing prices up further
6. Also chaps, in northern England you can buy nice terraces in nice villages with free parking, gardens and no security worries for £60-90k and rent them for £400-600pm. This is where I feel the market will increase because there is little stamp duty and some people can buy for cash.
It's kind of making property more in demand because he is putting restrictions in place.
1. Fewer people could enter the sector so rents will go up
2. The government are taxing it because they feel they can as house prices always rise and a small extra amount of stamp duty may cost 6 months rent but so what
3. Stamp duty will only go up to roughly where it was last year - don't forget stamp duty was cut recently.
4. It's clear the government knows housing is only ever going up
5. People will push through purchases before April pushing prices up further
6. Also chaps, in northern England you can buy nice terraces in nice villages with free parking, gardens and no security worries for £60-90k and rent them for £400-600pm. This is where I feel the market will increase because there is little stamp duty and some people can buy for cash.
It's kind of making property more in demand because he is putting restrictions in place.
Surely will just push everyone across to incorporating everything ... £8k of extra SDLT avoided pays for a lot of years of basic accountancy to do annual limited company returns.
Great news for owners of garages, small storage units or small shops that want to sell, as I can see people wanting 14 of those to pad out their portfolio and appear all "commercial".
Difficult to get mortgages as a small company at the moment, but that could change if the will is there, and it keeps the specialist BTL lenders in business.
As always the devil will be in the detail, so will need to wait for that to appear and be debated. Is it really going to be as "simple" as any second property attracting this additional SDLT? Because that properly screws people who are getting married and want to buy their big family "forever home" but retain their smaller pre-relationship flats on for a bit. How will it apply to couples who jointly own their home, or who don't? What about people that inherit their parents' home, do they get to own a second home without suffering this additional SDLT burden? What about people doing a "Grand Designs" who retain their old home for a year while they do a major refurb on their new place? What happens if you're in the process of selling and the chain falls apart but through good fortune you're still able to proceed with your new purchase. Do you now have to may massively more SDLT on that purchase merely because the chain breaking forced you into retaining the old property for an unexpected couple of months?
Presume it doesn't apply in Scotland since they have replaced SDLT so maybe all the BTL money will just go up there?
Is there any other field where for one couple or person to buy the exact same thing from the exact same seller and via the exact same agent at the exact same time, could potentially cost them far more than another couple or person, purely because of who they are and what else they own? Seems fundamentally unfair. If I want to buy a car, negotiating skills and special offer timing aside, it costs the same whoever buys it.
Seems to me there are far greater problems in the housing market that he ought to be tackling first. For example overseas investment / "buy to leave" / overseas investment in UK property for money laundering purposes. Scum landlords cramming 20 people into one unsafe house under the radar. Unscrupulous landlords with hundreds or thousands of properties that they don't properly maintain. Subletting of council/association/affordable housing. Wish they would take some thorough and useful action against any or all of those abuses before blanket-s
tting on relatively ordinary folk that just want one or two extra properties for their pension or whatever, and do look after them and their tenants properly.
Great news for owners of garages, small storage units or small shops that want to sell, as I can see people wanting 14 of those to pad out their portfolio and appear all "commercial".
Difficult to get mortgages as a small company at the moment, but that could change if the will is there, and it keeps the specialist BTL lenders in business.
As always the devil will be in the detail, so will need to wait for that to appear and be debated. Is it really going to be as "simple" as any second property attracting this additional SDLT? Because that properly screws people who are getting married and want to buy their big family "forever home" but retain their smaller pre-relationship flats on for a bit. How will it apply to couples who jointly own their home, or who don't? What about people that inherit their parents' home, do they get to own a second home without suffering this additional SDLT burden? What about people doing a "Grand Designs" who retain their old home for a year while they do a major refurb on their new place? What happens if you're in the process of selling and the chain falls apart but through good fortune you're still able to proceed with your new purchase. Do you now have to may massively more SDLT on that purchase merely because the chain breaking forced you into retaining the old property for an unexpected couple of months?
Presume it doesn't apply in Scotland since they have replaced SDLT so maybe all the BTL money will just go up there?
Is there any other field where for one couple or person to buy the exact same thing from the exact same seller and via the exact same agent at the exact same time, could potentially cost them far more than another couple or person, purely because of who they are and what else they own? Seems fundamentally unfair. If I want to buy a car, negotiating skills and special offer timing aside, it costs the same whoever buys it.
Seems to me there are far greater problems in the housing market that he ought to be tackling first. For example overseas investment / "buy to leave" / overseas investment in UK property for money laundering purposes. Scum landlords cramming 20 people into one unsafe house under the radar. Unscrupulous landlords with hundreds or thousands of properties that they don't properly maintain. Subletting of council/association/affordable housing. Wish they would take some thorough and useful action against any or all of those abuses before blanket-s
tting on relatively ordinary folk that just want one or two extra properties for their pension or whatever, and do look after them and their tenants properly.kev1974 said:
Wish they would take some thorough and useful action against any or all of those abuses before blanket-stting on relatively ordinary folk that just want one or two extra properties for their pension or whatever, and do look after them and their tenants properly.
That isn't acceptable to the politics of envy. Someone has more, it's only 'fair' that the product of their effort is taken off them & redistributed to the rest.tting on relatively ordinary folk that just want one or two extra properties for their pension or whatever, and do look after them and their tenants properly.Eric Mc said:
Do you think that it is good for the country and economy that so much time, effort and money gets sucked into privately owned residential properties?
Perhaps more effort should be directed towards more productive economic activity.
A point already made but ignored. Perhaps more effort should be directed towards more productive economic activity.
It is not about envy but about reducing this obsession with property as an investment.
JagLover said:
A point already made but ignored.
It is not about envy but about reducing this obsession with property as an investment.
It's not really an obsession though is it? It's a rational investment decision following tax changes that make investment in pensions less attractive. That's the problem with short-term financial decisions by govts (they are all guilty of it); as soon as any investment becomes popular and remunerative, it gets taxed. We wouldn't have had the BTL boom if planning laws had been amended to allow sufficient houses to be built and some sensible vehicle had been established to allow ordinary punters to invest in pension funds that don't get raided every few years by avaricious govts. It is not about envy but about reducing this obsession with property as an investment.
Eric Mc said:
Do you think that it is good for the country and economy that so much time, effort and money gets sucked into privately owned residential properties?
Perhaps more effort should be directed towards more productive economic activity.
The privately owned residential properties will need carpet fitters, kitchen fitters, electricians, plumbers, decorators, builders etc. etc.Perhaps more effort should be directed towards more productive economic activity.
I'm a landlord and have employed all of the above to do work. I'm guessing the people I pay would have a different opinion than you on whether they were considered "productive economic activity". Apart from that, I also employ an accountant to work out how much tax I have to pay - another beneficiary of my economic activity.
Never mind the amount of "time, effort and money getting sucked into" this market, have you considered how much it puts back?
The simple reason Osborne has gone after landlords is f
k all to do with helping FTB get onto the housing ladder. It's to do with them being an easy target. Same as councils introducing landlord licenses at £500 per property - easy target.If it was me, I'd introduce tax breaks for companies willing to invest in new sites in areas of the country that need jobs. These companies will need employees & the house builders need to build to satisfy demand. It's no good saying we need another million homes as there's f
k all point building them in Middlesbrough if there's nobody there to buy them and there certainly doesn't seem to be the room or the infrastructure to build them in the South East.northwest monkey said:
loafer123 said:
The really big investors build. They aren't interested in 2bed houses scattered around towns or pepperpotted units in larger developments.
Rubbish. You go to any good sized property auction & this is exactly what they are buying.The emerging Private Rented Sector is focused around institutional investors building to rent and gaining efficiencies in their gross:net by controlling whole blocks.
I am sure that the North London crowd will continue to aggregate portfolios of messy stock, but that is not where the future action in this sector will be.
northwest monkey said:
The privately owned residential properties will need carpet fitters, kitchen fitters, electricians, plumbers, decorators, builders etc. etc.
I'm a landlord and have employed all of the above to do work. I'm guessing the people I pay would have a different opinion than you on whether they were considered "productive economic activity". Apart from that, I also employ an accountant to work out how much tax I have to pay - another beneficiary of my economic activity.
Never mind the amount of "time, effort and money getting sucked into" this market, have you considered how much it puts back?
The simple reason Osborne has gone after landlords is fk all to do with helping FTB get onto the housing ladder. It's to do with them being an easy target. Same as councils introducing landlord licenses at £500 per property - easy target.
If it was me, I'd introduce tax breaks for companies willing to invest in new sites in areas of the country that need jobs. These companies will need employees & the house builders need to build to satisfy demand. It's no good saying we need another million homes as there's fk all point building them in Middlesbrough if there's nobody there to buy them and there certainly doesn't seem to be the room or the infrastructure to build them in the South East.
Of course it generates some activity. But it doesn't reward innovation, technical breakthroughs or create success internationally. I actually think part of the UK's decline as a "doing" nation is linked to the obsession with property.I'm a landlord and have employed all of the above to do work. I'm guessing the people I pay would have a different opinion than you on whether they were considered "productive economic activity". Apart from that, I also employ an accountant to work out how much tax I have to pay - another beneficiary of my economic activity.
Never mind the amount of "time, effort and money getting sucked into" this market, have you considered how much it puts back?
The simple reason Osborne has gone after landlords is f
k all to do with helping FTB get onto the housing ladder. It's to do with them being an easy target. Same as councils introducing landlord licenses at £500 per property - easy target.If it was me, I'd introduce tax breaks for companies willing to invest in new sites in areas of the country that need jobs. These companies will need employees & the house builders need to build to satisfy demand. It's no good saying we need another million homes as there's f
k all point building them in Middlesbrough if there's nobody there to buy them and there certainly doesn't seem to be the room or the infrastructure to build them in the South East.And too much of the financial sector relies on property as its backbone.
Eric Mc said:
Absolutely. The UK has been on a property based "junkie fest" for decades and we need to break out of this cycle and get back to investing in technology, science, manufacturing etc.
Decades? Property and land has been a sound investment for hundreds of years and will continue to be so![On the 4th of May 1834 at the age of 71.] Could I begin life again, knowing what I now know, and had money to invest, I would buy every foot of land on the Island of Manhattan.
John Jacob Astor
I'd also be interested to know how the average person should go about investing in 'technology, science and manufacturing' other than via capital markets? Via some crazy start-up on CrowdCube?
poocherama said:
Decades? Property and land has been a sound investment for hundreds of years and will continue to be so!
[On the 4th of May 1834 at the age of 71.] Could I begin life again, knowing what I now know, and had money to invest, I would buy every foot of land on the Island of Manhattan.
John Jacob Astor
I'd also be interested to know how the average person should go about investing in 'technology, science and manufacturing' other than via capital markets? Via some crazy start-up on CrowdCube?
It's been up and down over time. There have been particular property related bubbles (and crashes) post World War 2 - that mirror Britain's industrial decline. I do not think these are unconnected factors.[On the 4th of May 1834 at the age of 71.] Could I begin life again, knowing what I now know, and had money to invest, I would buy every foot of land on the Island of Manhattan.
John Jacob Astor
I'd also be interested to know how the average person should go about investing in 'technology, science and manufacturing' other than via capital markets? Via some crazy start-up on CrowdCube?
Eric Mc said:
It's been up and down over time. There have been particular property related bubbles (and crashes) post World War 2 - that mirror Britain's industrial decline. I do not think these are unconnected factors.
Of course the value of investments fluctuate over time. Its why Warren Buffet is one of the richest men on the planet. Though as per my previous post I'd be interested in how you'd encourage private individuals, with little or no experience of investing in businesses, to park their money into 'productive' areas of the economy.
Britain was once claimed to be "a nation of shopkeepers". Although intended as an insult, it actually reflected quite well its entrepreneurial spirit and reputation for technical innovation. Most of that came from individuals who put their heart and soul (and savings) into new ideas, technologies, industrial processes etc (think Frank Whittle and people like him).
How much of that energy, drive and innovation is lost when people decide to take the easy way out, buy a property, and watch its value grow through property inflation?
That is not entrepreneurship -it's speculation.
How much of that energy, drive and innovation is lost when people decide to take the easy way out, buy a property, and watch its value grow through property inflation?
That is not entrepreneurship -it's speculation.
Eric Mc said:
That is not entrepreneurship -it's speculation.
No speculation = no economic activity.
If we want people to invest in other sectors, we need incentives. Slapping extra tax on any investment that starts to look successful is not an incentive to any investment.
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