How far will house prices fall [volume 4]

[TheLordJohn]

Rovinghawk said:

Name calling? How childish.

Classic Ad Hominum. It's what most arguments on PH end up in.

[Timberwolf]

I was saving about £500/month as a graduate on that kind of salary, but it was a pretty miserable experience as it involved stripping away nearly every non-essential expenditure. Renting a badly-maintained house on a main road in a crap area followed by a 1960s flat with zero sound insulation, spending holidays in the UK bumming a spare room off any relative who happened to live somewhere nice, running old barges into the ground, having a diet based almost entirely on cheap carbohydrates and keeping the same old battle-scarred Nokia for about a decade.

If I'm honest, I'd have been better off getting a liar loan the moment I graduated and smashing the living daylights out of it the moment SVRs went to nearly zero post-crash. But you can't predict the future, and at my age the only reference point for what happens after a boom was 1989-1991 so there you go. I've ended up where I wanted to be even if it wasn't the most efficient route to take there.

Anyway, point is that level of saving was bloody hard to get to, and only really worked because all of the essentials back then were dirt cheap. Food's gone up, rent's gone up, travel costs have gone up, council tax and energy bills are up, and what I was doing was only really possible for someone without children - it's fine being parsimonious as an adult couple or singleton but you wouldn't want your kids growing up in a house that's falling apart and never having anything nice.

[mike74]

Rovinghawk said:

Name calling? How childish.

I'm a guy who runs a business & who doesn't like movement of goalposts to suit political whims.

Oh do stop whinging Stop deluding yourself that you're a businessman, you're just another amateur wannabee property ''entrepreneur'' who's had heir pants pulled down.

I suppose the one thing going in your favour is at least you seem to recognise the fact that you've been stitched up good and proper... there are plenty of other over leveraged idiot LL's out there who are blissfully ignorant of the changes that have already been made and equally unaware of the further changes still yet to be fully implemented.

[tannhauser]

scenario8 said:

PH never ceases to amuse me with its perceptions of income and wealth. I’m just inside that previously quoted salary bracket and have none of the expected/assumed wealth to draw upon. Nor even any fraction.

I do, however, have an outstanding mortgage liability about equal to that assumed cash hoard.

Yes, I work and live within the M25 and frankly my long term (and immediate) finances are fecked.

Thanks for the real-world insight into what is not an atypical situation. Illustrates quite clearly how fooked we are.

[tannhauser]

Timberwolf said:

I was saving about £500/month as a graduate on that kind of salary, but it was a pretty miserable experience as it involved stripping away nearly every non-essential expenditure. Renting a badly-maintained house on a main road in a crap area followed by a 1960s flat with zero sound insulation, spending holidays in the UK bumming a spare room off any relative who happened to live somewhere nice, running old barges into the ground, having a diet based almost entirely on cheap carbohydrates and keeping the same old battle-scarred Nokia for about a decade.

If I'm honest, I'd have been better off getting a liar loan the moment I graduated and smashing the living daylights out of it the moment SVRs went to nearly zero post-crash. But you can't predict the future, and at my age the only reference point for what happens after a boom was 1989-1991 so there you go. I've ended up where I wanted to be even if it wasn't the most efficient route to take there.

Anyway, point is that level of saving was bloody hard to get to, and only really worked because all of the essentials back then were dirt cheap. Food's gone up, rent's gone up, travel costs have gone up, council tax and energy bills are up, and what I was doing was only really possible for someone without children - it's fine being parsimonious as an adult couple or singleton but you wouldn't want your kids growing up in a house that's falling apart and never having anything nice.

My sentiments entirely. The prudent and careful have been shafted. I'm fking livid with the whole situation.

[Rovinghawk]

mike74 said:

Stop deluding yourself that you're a businessman, you're just another amateur wannabee property ''entrepreneur'' who's had heir pants pulled down.

You've said more about yourself than about me with your ad homs. I won't respond in kind at this time.
I note that your comments about pants being pulled down don't quite align with your earlier comment about LLs just getting what they deserve.

mike74 said:

I suppose the one thing going in your favour is at least you seem to recognise the fact that you've been stitched up good and proper...

As I said, it doesn't match your earlier comments regarding LLs and how they are allegedly now being treated fairly.

mike74 said:

there are plenty of other over leveraged idiot LL's out there

Implying that I am one such? As previously stated, you know little.

mike74 said:

blissfully ignorant of the changes that have already been made and equally unaware of the further changes still yet to be fully implemented.

I'm fully aware of the changes made, hence my displeasure at them.

I go back to my original statement that these attacks on LLs do not equate with your earlier statements that the government do everything possible to shore up house prices- your later comments basically confirm that this is not the case.

You contradict yourself. A different slant on this could be that you are a spiteful lying little toad, sir.

Edited by Rovinghawk on Tuesday 21st November 17:22

[kingston12]

mike74 said:

I suppose the one thing going in your favour is at least you seem to recognise the fact that you've been stitched up good and proper.

Have they been 'stitched up' though? They have a higher tax burden then other businesses, but still less than the owner occupiers they are competing against to buy properties.

A lot of people will think that it level the playing field to a certain extent and that is one of the reasons the government have got away with introducing it.

Edited by kingston12 on Tuesday 21st November 17:32

[Rovinghawk]

kingston12 said:

They have a higher tax burden then other businesses, but still less than the owner occupiers they are competing against to buy properties.

1 Could you please back up the assertion that LLs have lower tax burdens than owner occupiers?

2) Could you please explain why a LL would compete against (ie outbid) OOs? The whole point of a business is to buy cheaper, not dearer. Most LLs I know buy & renovate rather than just wave huge wads of cash around.

[kingston12]

Rovinghawk said:

kingston12 said:

They have a higher tax burden then other businesses, but still less than the owner occupiers they are competing against to buy properties.

1 Could you please back up the assertion that LLs have lower tax burdens than owner occupiers?

2) Could you please explain why a LL would compete against (ie outbid) OOs? The whole point of a business is to buy cheaper, not dearer. Most LLs I know buy & renovate rather than just wave huge wads of cash around.

1. When I last looked at it, LLs were allowed to offset part of their mortgage interest even though less than before, OOs obviously nothing at all. Edit to add: looks like the whole benefit goes in 2020, but LLs still have a tax advantage until then.

2. This was more about perception than individual transactions. The perception of the public is that LLs are driving up demand (and therefore prices), putting purchasing beyond the reach of first time buyers.

The reality is a bit more complex, but it makes it easier for the government to raise LL taxes.

Edited by kingston12 on Tuesday 21st November 19:00

Edited by kingston12 on Tuesday 21st November 19:13

Edited by kingston12 on Tuesday 21st November 20:28

[98elise]

kingston12 said:

Rovinghawk said:

kingston12 said:

They have a higher tax burden then other businesses, but still less than the owner occupiers they are competing against to buy properties.

1 Could you please back up the assertion that LLs have lower tax burdens than owner occupiers?

2) Could you please explain why a LL would compete against (ie outbid) OOs? The whole point of a business is to buy cheaper, not dearer. Most LLs I know buy & renovate rather than just wave huge wads of cash around.

1. When I last looked at it, LLs were allowed to offset part of their mortgage interest even though less than before, OOs obviously nothing at all. Edit to add: looks like the whole benefit goes in 2020.

2. This was more about perception than individual transactions. The perception of the public is that LLs are driving up demand (and therefore prices), putting purchasing beyond the reach of first time buyers.

The reality is a bit more complex, but it makes it easier for the government to raise LL taxes.

Edited by kingston12 on Tuesday 21st November 19:00

Edited by kingston12 on Tuesday 21st November 19:13

If an OO rents out a room in their property its pretty much tax free (unless you have a very large room rate).

LL's are not outbidding OO's. Have you ever been into an estate agent and found they have no properies available? LL's mortgage surveys include both the value of the property and the possible rent. It's not an endless pot of free money, if you over bid you will not get finance any more than an OO.

As has been said, all mine were bought as cheap run down properties and renovated. I have never paid more than the asking price, in fact I've normally paid less. They have all been bought on the open market.

All business can offset finance, other than landlords. Adding extra cost to the rental market will not push prices down. There are no more properties available, and no less people needing housing. The way you finance getting someone in a house does not affect the supply or the demand.

[edh]

98elise said:

mike74 said:

Rovinghawk said:

Taxing turnover rather than profit?

Massive increases in paperwork?

You know little.

BooHoo.

Ending of their tax breaks is the least they should be subject to and as for the ''massive increases in paperwork'' don't make me laugh!

Why are all other businesses entitled to this tax break, but not personally owned rental property? Even rental property in a Ltd company gets to keep the break.

Its simply an easy target for a tax raid because the general public won't kick up a fuss.

Because it isn't a "business".

[kingston12]

98elise said:

If an OO rents out a room in their property its pretty much tax free (unless you have a very large room rate).

LL's are not outbidding OO's. Have you ever been into an estate agent and found they have no properies available? LL's mortgage surveys include both the value of the property and the possible rent. It's not an endless pot of free money, if you over bid you will not get finance any more than an OO.

As has been said, all mine were bought as cheap run down properties and renovated. I have never paid more than the asking price, in fact I've normally paid less. They have all been bought on the open market.

All business can offset finance, other than landlords. Adding extra cost to the rental market will not push prices down. There are no more properties available, and no less people needing housing. The way you finance getting someone in a house does not affect the supply or the demand.

Indeed, but the perception I pick up is that those who want to buy at the bottom of the market feel that they are being priced out of doing so because LLs are buying the all of the properties.

I definitely don't think it is as simple as that and I agree with some of your reasons as to why it isn't always the case. In my area, the asking price of flats is definitely aimed at what landlords can afford to pay and a large proportion of the FTBs just could never raise the finance.

Taking an extreme and theoretical example, if Hammond took further measures in the budget against landlords that were so punitive that they all decided not to add to their portfolios, don't you think that would have a downward impact on asking/selling prices at some point? There would be the same demand from people wanting to live in any given area, but the money available to buy would be far less.

[trowelhead]

mike74 said:

Utter rubbish. There is NOWHERE in the UK where you could buy a decent property requiring little/no renovation or maintenance work in a reasonable area where you'll attract decent, respectful tenants, all for £60k

As others have already said at that kind of price point you'll be doing constant repairs and maintenance and only attracting the less reliable type of tenants

Edited by mike74 on Tuesday 21st November 09:58

Absolute nonsense.

[Rovinghawk]

mike74 said:

Utter rubbish. There is NOWHERE in the UK where you could buy a decent property requiring little/no renovation or maintenance work in a reasonable area where you'll attract decent, respectful tenants, all for £60k.

Here's a couple of thousand- pick one.

http://www.rightmove.co.uk/property-for-sale/find....

Edited by Rovinghawk on Tuesday 21st November 20:48

[Blue Oval84]

98elise said:

If an OO rents out a room in their property its pretty much tax free (unless you have a very large room rate).

LL's are not outbidding OO's. Have you ever been into an estate agent and found they have no properies available? LL's mortgage surveys include both the value of the property and the possible rent. It's not an endless pot of free money, if you over bid you will not get finance any more than an OO.

Potential BTL Landlords pushed my flat price up above asking when I bought in 2014. Two of them ended up dropping out before I got it on the third go but I did end up paying over asking price, specifically because some BTLLL's were trying to get it.

I know that's just one example amongst thousands of property sales, but it reinforces my view that LL's definitely drive up the asking prices. A friend of mine has several properties and does compete with FTB's and young families for them, he claims that he sometimes outbids them to get the properties that he wants.

[kingston12]

edh said:

98elise said:

mike74 said:

Rovinghawk said:

Taxing turnover rather than profit?

Massive increases in paperwork?

You know little.

BooHoo.

Ending of their tax breaks is the least they should be subject to and as for the ''massive increases in paperwork'' don't make me laugh!

Why are all other businesses entitled to this tax break, but not personally owned rental property? Even rental property in a Ltd company gets to keep the break.

Its simply an easy target for a tax raid because the general public won't kick up a fuss.

Because it isn't a "business".

I think the real reason is the opposite - it has become too much of a business. There are many times the number of landlords there were twenty years ago, but they still represent a minority in the overall electorate so eases the government's hand to act against them.

If they hadn't acted against them, the landlords would probably form a much large minority of the electorate than they do now.

It seemed like virtually everyone I knew was considering buying a second property to let out a few years ago. I definitely don't hear that so much now.

[Rovinghawk]

kingston12 said:

edh said:

98elise said:

Why are all other businesses entitled to this tax break, but not personally owned rental property?

Because it isn't a "business".

I think the real reason is the opposite - it has become too much of a business.

Try answering what he actually said/meant.

[kingston12]

Rovinghawk said:

kingston12 said:

edh said:

98elise said:

Why are all other businesses entitled to this tax break, but not personally owned rental property?

Because it isn't a "business".

I think the real reason is the opposite - it has become too much of a business.

Try answering what he actually said/meant.

Don’t the above two answers combined really sum it up? The government builds up the attractiveness of renting property and then wants a bigger slice of LL income. They know they can get away with it because the majority of the public either don’t consider it a real business or they do but they dislike it.

Whether it is right or not is a completely different matter. I remember similar arguments when MIRAS was abolished.

Edited by kingston12 on Tuesday 21st November 23:19

[jonah35]

tannhauser said:

p1stonhead said:

jonah35 said:

gibbon said:

jonah35 said:

I think some people are still missing a trick

You can still buy perfectly acceptable 2 bed terraced homes or apartments in the north for £60k and rent them out for £450 per month

Buy 2 or 3 of those and ok you won’t be a millionaire but it always gives you a regular income

I don’t know why more people don’t do it

Because i dont want to be a professional part time handy man part time debt collector.

So many people earn £20-35k per year which is say roughly £1200-2100 pm net and they could put their savings to far better use than have £200k sat in cash isas, kids savings, a £30k car and so on.

How many people have any of this let alone people earning £20-35k?

Absolutely! Shows how disconnected this smug, self-congratulating poster is from reality. Most people earning average wages barely struggle to run a single household FFS!

Not everyone has £200k in savings I’m aware of that but many 50 plus year olds have paid off their mortgages and have had children leave home, received an inheritance and have saved some money each month of their working lives.

I would disagree that most people struggle and feel that if you have a modest job and so does your partner then if you’re careful with money then you can save each month.

But yes of course the poorest people in society won’t be able to save or invest anything, of course they wouldn’t.

[jonah35]

anonymous said:

[redacted]

Well yes but they could save and invest £300 per month over 30 years which would be £108k and let’s assume that one of them inherits a modest house from a deceased parent of say £100k then that would be £200k. Let alone any modest inheritance from grand parents

They could also get £10k back from ppi claim

Access £60k tax free cash from their combined pensions

Get a £27k redundancy payment too

Or let’s say they bought a car like a Sierra cosworth for £8k years ago and sell it for £40k

Of course I’m not saying everyone has £200k but a fair few people do but I fully accept most don’t

I’m just saying the people with savings could put them to better use