How far will house prices fall [volume 4]

How far will house prices fall [volume 4]

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Rovinghawk

13,300 posts

157 months

Tuesday 8th May 2018
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NickCQ said:
Rovinghawk said:
If house prices had crashed would anyone be so keen to compensate me for my losses as they are to claim a share of any gains? I don't think so.
You must have missed out on the huge amounts of cash pumped into the system to sustain asset prices after the financial crisis then (i.e. QE) wink
I ask again: if house prices had crashed would anyone be so keen to compensate me for my losses? It was a simple question capable of a simple yes/no answer, which I actually provided thinking that it would help you reply.

If I'd lost money that would have been purely my issue so I don't have a great urge to be preyed upon when making a profit.

hyphen

26,262 posts

89 months

Tuesday 8th May 2018
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Rovinghawk said:
I ask again: if house prices had crashed would anyone be so keen to compensate me for my losses? It was a simple question capable of a simple yes/no answer, which I actually provided thinking that it would help you reply.
Can you not carry forward/offset your losses for CGT/other tax purposes?

kingston12

5,473 posts

156 months

Tuesday 8th May 2018
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chunder27 said:
Aren't you all ignoring the basic fact that no-one is doing anything whatsoever about the house price increases in the UK, and sooner or later it has to implode.

It simply has to, as eventually no-one whatsoever unless you are a couple earning well over 150k a year will be able to buy a house South of Birmingham.

That CANNOT be sustainable or keep rising.

Somebody somewhere just simply has to do something about it eventually.
What are they going to actually do about it? There are very few politicians who would actively look to crash the housing market whilst they are in power, especially with the London/SE bubble so big that it would probably take a lot more with it.

The only answer that might be palatable now is managed stability/stagnation, which is what we are seeing now in the more expensive parts of London/SE. It should be pretty easy to achieve that just by standing still (no or slow interest rate rises and no expansion of schemes like Help to Buy)

It certainly won't satisfy everyone, but it might be the best way to take the heat out of the problem without seriously harming too many people.

edh

3,498 posts

268 months

Tuesday 8th May 2018
quotequote all
Rovinghawk said:
NickCQ said:
Rovinghawk said:
If house prices had crashed would anyone be so keen to compensate me for my losses as they are to claim a share of any gains? I don't think so.
You must have missed out on the huge amounts of cash pumped into the system to sustain asset prices after the financial crisis then (i.e. QE) wink
I ask again: if house prices had crashed would anyone be so keen to compensate me for my losses? It was a simple question capable of a simple yes/no answer, which I actually provided thinking that it would help you reply.

If I'd lost money that would have been purely my issue so I don't have a great urge to be preyed upon when making a profit.
Your LVT would go down if land prices went down, so yes. HTH

Justayellowbadge

37,057 posts

241 months

Tuesday 8th May 2018
quotequote all
edh said:
Your LVT would go down if land prices went down, so yes. HTH
A tax that by its very existence causes returns to diminish. That does sound like the way to go.

NickCQ

5,392 posts

95 months

Tuesday 8th May 2018
quotequote all
Rovinghawk said:
I ask again: if house prices had crashed would anyone be so keen to compensate me for my losses? It was a simple question capable of a simple yes/no answer, which I actually provided thinking that it would help you reply.
I did try and answer. Let me rephrase.

When it looked like house prices were about to fall, reducing your profits, the powers that be (i.e. the Bank of England) decided to inflate the money supply through QE, creating new money to buy bonds, reducing interest rates and propping up the value of all assets, including property.

QE creates inflation, which is a tax on labour that reduces real wages (as nominal wages are sticky and don't adjust to the new price level). Therefore, wage slaves all over the country experienced a moderation in real wage growth, and this benefitted asset owners such as ourselves.

So in short, yes, people all over the country dipped into their pockets without realising it so that we didn't make a loss.
Hope I explained myself properly this time beer

mike74

3,687 posts

131 months

Tuesday 8th May 2018
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Rovinghawk said:
I paid tax on my earned income to invest.
I paid tax on the materials & tools I bought to use.
I paid tax when buying the properties (SDLT).
I pay tax on the rental income- not only on the profit but on the turnover.
I pay tax on any CG when I sell the properties.

I'd say that society has had a decent share already.

I'd suggest that certain parts of this society go out & earn some wealth rather than have some of mine distributed to them. If that makes me a bad person IYO then so be it.
You're honestly trying to say that being a leveraged landlord having someone pay off your BTL mortgage is ''earning wealth''...

wow, just wow.

Francois de La Rochefoucauld

460 posts

77 months

Tuesday 8th May 2018
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Any chance you lot can 'get a room'. This thread is about house prices not the ethics of BTL.

If you're that concerned about intergenerational fairness stop waisting your time 'wow just wowing' on here and go and start re- distributing your own I'll gotten booty sharpish.


mike74

3,687 posts

131 months

Tuesday 8th May 2018
quotequote all
Francois de La Rochefoucauld said:
Any chance you lot can 'get a room'. This thread is about house prices not the ethics of BTL.

If you're that concerned about intergenerational fairness stop waisting your time 'wow just wowing' on here and go and start re- distributing your own I'll gotten booty sharpish.
Oooh the thread police have turned up now.

Because, of course, leveraged BTL has had no impact at all on house prices has it.

edh

3,498 posts

268 months

Tuesday 8th May 2018
quotequote all
Justayellowbadge said:
edh said:
Your LVT would go down if land prices went down, so yes. HTH
A tax that by its very existence causes returns to diminish. That does sound like the way to go.
"if" ..... Anyway it may not reduce land prices, just reduce the profits available to landlords as the tax is borne by the landowner not the tenant.

Anyway Friedman's "least bad tax" has plenty to recommend it, including the ability to stimulate activity at the margins where land values are very low, instead of penalising it as our current tax system does.

Rovinghawk

13,300 posts

157 months

Tuesday 8th May 2018
quotequote all
mike74 said:
You're honestly trying to say that being a leveraged landlord having someone pay off your BTL mortgage is ''earning wealth''...
Read the bit where I mention tools, materials & work. (You can't read the bit about paying off BTL mortgages as I didn't write it.)

Refurbishment of wrecks into habitable properties is earning wealth, as is running a business supplying homes to those who can't/won't get their own.

Please don't attempt to put words into my mouth.

edh

3,498 posts

268 months

Tuesday 8th May 2018
quotequote all
Rovinghawk said:
mike74 said:
You're honestly trying to say that being a leveraged landlord having someone pay off your BTL mortgage is ''earning wealth''...
Read the bit where I mention tools, materials & work. (You can't read the bit about paying off BTL mortgages as I didn't write it.)

Refurbishment of wrecks into habitable properties is earning wealth, as is running a business supplying homes to those who can't/won't get their own.

Please don't attempt to put words into my mouth.
a. "Refurbishment of wrecks into habitable properties is earning wealth" - Agreed

b. "..as is running a business supplying homes to those who can't/won't get their own" - Not unless you are only describing the duties you could farm out to a letting agent/property management company.

Rovinghawk

13,300 posts

157 months

Tuesday 8th May 2018
quotequote all
edh said:
the tax is borne by the landowner not the tenant.
You're really keen on tax paid by someone else, aren't you?

Increasing costs to LLs increases costs to tenants. It's that bloody simple.

Personal opinion: if we want to remobilise the housing market then a reduction in SDLT is the way forward. It could be financed either by increased sales volumes or by reducing benefits given to those who won't work.

NickCQ

5,392 posts

95 months

Tuesday 8th May 2018
quotequote all
Rovinghawk said:
reducing benefits given to those who won't work
Like the rentier classes, you mean??

edh

3,498 posts

268 months

Tuesday 8th May 2018
quotequote all
Rovinghawk said:
edh said:
the tax is borne by the landowner not the tenant.
You're really keen on tax paid by someone else, aren't you?

Increasing costs to LLs increases costs to tenants. It's that bloody simple.

Personal opinion: if we want to remobilise the housing market then a reduction in SDLT is the way forward. It could be financed either by increased sales volumes or by reducing benefits given to those who won't work.
I'm a landowner not a tenant, what is your point? I'm keen on tax on land ownership.

As you are so keen to tell me what i think about who should pay tax, I cant help thinking; you really don't understand markets do you? Rents are set by what tenants are prepared to pay, not landlord's costs.

SDLT would be abolished under an LVT based system.

Rovinghawk

13,300 posts

157 months

Tuesday 8th May 2018
quotequote all
NickCQ said:
Like the rentier classes, you mean??
No- they pay tax & contribute rather than receive benefits.

I also give you my earlier comments about house refurbishment which you seem determined to misunderstand.

When I say 'won't work' I mean won't get off their idle arses to provide for themselves.

Rovinghawk

13,300 posts

157 months

Tuesday 8th May 2018
quotequote all
edh said:
I cant help thinking; you really don't understand markets do you? Rents are set by what tenants are prepared to pay, not landlord's costs.
I really do understand my local rental market; it's one of the ways I earn my living. If costs everywhere rise, so do rents.

edh said:
SDLT would be abolished under an LVT based system.
I cant help thinking- you really don't understand government appetite for taxation, do you?

edh

3,498 posts

268 months

Tuesday 8th May 2018
quotequote all
NickCQ said:
Rovinghawk said:
reducing benefits given to those who won't work
Like the rentier classes, you mean??
clap

edh

3,498 posts

268 months

Tuesday 8th May 2018
quotequote all
Rovinghawk said:
edh said:
I cant help thinking; you really don't understand markets do you? Rents are set by what tenants are prepared to pay, not landlord's costs.
I really do understand my local rental market; it's one of the ways I earn my living. If costs everywhere rise, so do rents.
Ok so a quick thought experiment. Let's say the govt imposes a tax of £500 per month, per property for landlords.

You go to your tenants and say "I need you to pay me £500/month more rent"

They say "we have no extra money to pay a higher rent" (like most renters, they aren't stashing ££'s in their ISA's every month)

What happens then?

Rovinghawk said:
edh said:
SDLT would be abolished under an LVT based system.
I cant help thinking- you really don't understand government appetite for taxation, do you?
LVT is a transformational tax and will only work as a replacement for existing taxes. If imposed at a low rate as an additional tax it would fail. Some proponents call it the "single tax"

JeremyH5

1,569 posts

134 months

Tuesday 8th May 2018
quotequote all
The answer to the housing cost and availability problem is as simple as basic economics. More demand than supply. Increase the number of houses built. I’ve been saying it for decades nobody listens.

Build. More. Houses.
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