Second Home Purchase in Pembrokeshire-150% council tax

[Royale1]

Hello,
Long term poster here-but asking this using this user name just in case any council snoopers.

We are looking at buying a property in Pembrokeshire-currently live in Wales. Do not want to move for three years due to family commitments etc. Would like to buy now as prices are on the up-and it's better than leaving the cash in the bank.

Problem is second homes in Wales pay 9% stamp duty and in Pembrokeshire 150% council tax.

Anyone had any experience of getting around this?

Any help greatly appreciated.

I will be vilified by some on here-but I don't like wasting money- much the same as the next person.

Many thanks

Royale1

[Mammasaid]

Rent it out for 3 years?

At the end of the day it's a 2nd home and removing it from the local housing stock.

[anonymous-user]

If there’s bigger stamp duty and 150% council tax perhaps it’s not better than money in the bank?

[Mack11]

If you are selling your current home and plan to move within three years, you can claim back the extra stamp duty.
I think if you buy something deemed "inhabitable" you can possibly avoid it too.

No idea on Council tax, seems that is something you should pay as goes to the local council.

[Benbay001]

House prices to average income are well above historical averages.

So if you believe at all in reversion to the mean then id wager they wont be significantly higher in 3 years.

Are you sure youre not suffering a very expensive case of FOMO?

[aparna]

Benbay001 said:

House prices to average income are well above historical averages.

This has arguably never been a stable indicator of house prices though. I can't see houses falling, but people do seem to be pricing in 3 years of growth to their offers. But if they can afford it now, why not then too?

[Trophy Husband]

Royale1 said:

Hello,
Long term poster here-but asking this using this user name just in case any council snoopers.

We are looking at buying a property in Pembrokeshire-currently live in Wales. Do not want to move for three years due to family commitments etc. Would like to buy now as prices are on the up-and it's better than leaving the cash in the bank.

Problem is second homes in Wales pay 9% stamp duty and in Pembrokeshire 150% council tax.

Anyone had any experience of getting around this?

Any help greatly appreciated.

I will be vilified by some on here-but I don't like wasting money- much the same as the next person.

Many thanks

Royale1

Rules are there for a reason in my experience.
How much per month extra? 80 quid? £2.70 a day? Don't have the daily Costa and you'll be fine.

[timberman]

aparna said:

Benbay001 said:

House prices to average income are well above historical averages.

This has arguably never been a stable indicator of house prices though. I can't see houses falling, but people do seem to be pricing in 3 years of growth to their offers. But if they can afford it now, why not then too?

Personally I'd be very interested to know how people manage to keep affording these ever increasing prices,

House prices have shot up in some areas by over 10% in the last year yet wages have barely moved so where do they keep finding the extra money from?

[Rh14n]

I think moves are afoot in Wales to make the owning of second homes a lot more expensive in the future. It's very topical at the moment and was on the Welsh news this evening. There's a lot of protesting going on re the lack of properties affordable for local people, with some villages having a very high percentage of second homes. My husband and I were commenting tonight that we can foresee the potential for the re-emergence of Meibion Glyndwr type action raising its ugly head once more before too long.

[MitchT]

timberman said:

Personally I'd be very interested to know how people manage to keep affording these ever increasing prices.

Me too. I'd love to know where all the jobs are that pay so much that people can afford these prices! I have the equivalent of a 20% deposit saved up, based on the price of a basic home in my neck of the woods, but based on what I've been told I can borrow I'd need my salary to double to afford the 80% mortgage that I'd need. I can only surmise that a minority of exceptionally cash rich people and high earners are sinking all their money into property because returns on cash are so poor and that prices are reflecting their buying power, not that of those who just want to buy one house to live in.

[red_slr]

timberman said:

aparna said:

Benbay001 said:

House prices to average income are well above historical averages.

This has arguably never been a stable indicator of house prices though. I can't see houses falling, but people do seem to be pricing in 3 years of growth to their offers. But if they can afford it now, why not then too?

Personally I'd be very interested to know how people manage to keep affording these ever increasing prices,

House prices have shot up in some areas by over 10% in the last year yet wages have barely moved so where do they keep finding the extra money from?

I think not going on holiday or any days out, nights out etc for 18 months has added up to quite a sum of cash for some people.
Plus WFH means way less travel costs.

I certainly have friends who have commented they have never had so much money in the bank and a new massive chunk of equity in their house.

I think for some its just been too tempting not to move and they have seen it as "now or never" and that has driven the market wild in most of the UK. This results in no stock on the market which makes people even more desperate and the cycle continues. The bubble will eventually burst but might be next week might be 10 years, who knows. Then things will calm down for a while and eventually start to rise again.

[Trophy Husband]

Inflation is being hidden in property prices.
Too many people are leveraging their homes for a PCP on a car they really should not have on the never never because of the 'perceived' value of their home.
The tory government are happy about this.
Spend, Spend, spend!
It really is a Ponzi.
Sub-prime is here.
The house of cards will fold.
The question is when.
The obvious answer is when interest rates become realistic.
I'm guessing north of 5% within 3 years.

[timberman]

red_slr said:

timberman said:

aparna said:

Benbay001 said:

House prices to average income are well above historical averages.

This has arguably never been a stable indicator of house prices though. I can't see houses falling, but people do seem to be pricing in 3 years of growth to their offers. But if they can afford it now, why not then too?

Personally I'd be very interested to know how people manage to keep affording these ever increasing prices,

House prices have shot up in some areas by over 10% in the last year yet wages have barely moved so where do they keep finding the extra money from?

I think not going on holiday or any days out, nights out etc for 18 months has added up to quite a sum of cash for some people.
Plus WFH means way less travel costs.

I certainly have friends who have commented they have never had so much money in the bank and a new massive chunk of equity in their house.

I think for some its just been too tempting not to move and they have seen it as "now or never" and that has driven the market wild in most of the UK. This results in no stock on the market which makes people even more desperate and the cycle continues. The bubble will eventually burst but might be next week might be 10 years, who knows. Then things will calm down for a while and eventually start to rise again.

I can believe that a lot of people have decided to move due to feeling that they'd sooner work from home somewhere other than the middle of a busy city, and that a number of people are now sitting on large sums of cash they wouldn't otherwise have had if not for the pandemic,

but a lot of the forecasts seem to suggest the prices are going to continue ever upwards with perhaps a slight slow down of the rate of increase, which would also suggest that there is still an infinite number of people in the same position,

this to me doesn't add up, there can''t be that many people who are either willing or able to keep paying these ever increasing prices, so at some point the well of potential home buyers is going to start drying up then what's going to keep pushing prices up.

the average uk household income seems to be listed as about £30k after stoppages which isn't going to get very far when trying to get a mortgage or buy a house at the moment,

and for all the people who already own homes and are trying to sell in order to move up, if not enough people can afford to buy at the bottom of the market then the houses at that end won't sell which will surely have a knock on effect further up,

if something most of us need reaches a point where only a few can afford it then the price either needs to adjust accordingly or the market will collapse and with houses it seems to going in that direction quite quickly,

I just can't see how this is sustainable even for the near future,

prices have no doubt increased largely because of the historically low interest rates and more recently the stamp duty holiday which sellers basically just added onto the asking price,
but the interest rates can't realistically go any lower and there's only so much that can be done to make things more affordable, plus if it just keeps pushing the prices even higher what's the point.

[red_slr]

timberman said:

which would also suggest that there is still an infinite number of people in the same position,

this to me doesn't add up, there can''t be that many people who are either willing or able to keep paying these ever increasing prices

I dont think its quite that simple. We have been looking to buy in an area of Cornwall for the last 3 years.
Back in 2019 there were usually between 50 and 70 properties on the market.

At the time of posting this there are 7. It was 6 at the start of the week.

There is just not stock on the market, that IMHO is whats driving this now.

Yes back in April 2020 the boom was started by the SDLT reduction but now 15 months later the lack of stock is what is driving it.

And thats a chicken and egg situation and like you say it looks like this could continue for a while.

I think it will take 2-3 years to get back to anything like "normal" on the housing market as the traditional April/May and Sep/Oct busy time in the listings market is just not going to be there because stock is not building back up.

I think the only exception to the rule is if you want to buy a flat in a city. That seems to be a fully stocked market at the moment - for obvious reasons.

Just my 2ps worth.

[aparna]

red_slr said:

I dont think its quite that simple. We have been looking to buy in an area of Cornwall for the last 3 years.
Back in 2019 there were usually between 50 and 70 properties on the market.

At the time of posting this there are 7. It was 6 at the start of the week.

There is just not stock on the market, that IMHO is whats driving this now.

Yes back in April 2020 the boom was started by the SDLT reduction but now 15 months later the lack of stock is what is driving it.

And thats a chicken and egg situation and like you say it looks like this could continue for a while.

I think it will take 2-3 years to get back to anything like "normal" on the housing market as the traditional April/May and Sep/Oct busy time in the listings market is just not going to be there because stock is not building back up.

I think the only exception to the rule is if you want to buy a flat in a city. That seems to be a fully stocked market at the moment - for obvious reasons.

Just my 2ps worth.

Doesn’t add up though. No stock but busiest month for sales ever? Suggests there is stock but it is selling very quickly?

[CubanPete]

I would look at a holiday home or pension wrapper, but I am not sure on what it will actually avoid, and you would need an exit strategy.

If you are that desparate to avoid the tax make sure you have it wrapped up squeekily as if it isn't it will be HMRC you will be defrauding

Or just wait 3 years.

[rampageturke]

Trophy Husband said:

Rules are there for a reason in my experience.
How much per month extra? 80 quid? £2.70 a day? Don't have the daily Costa and you'll be fine.

it sounds like someone is trying to live beyond their means

[Cheib]

aparna said:

red_slr said:

I dont think its quite that simple. We have been looking to buy in an area of Cornwall for the last 3 years.
Back in 2019 there were usually between 50 and 70 properties on the market.

At the time of posting this there are 7. It was 6 at the start of the week.

There is just not stock on the market, that IMHO is whats driving this now.

Yes back in April 2020 the boom was started by the SDLT reduction but now 15 months later the lack of stock is what is driving it.

And thats a chicken and egg situation and like you say it looks like this could continue for a while.

I think it will take 2-3 years to get back to anything like "normal" on the housing market as the traditional April/May and Sep/Oct busy time in the listings market is just not going to be there because stock is not building back up.

I think the only exception to the rule is if you want to buy a flat in a city. That seems to be a fully stocked market at the moment - for obvious reasons.

Just my 2ps worth.

Doesn’t add up though. No stock but busiest month for sales ever? Suggests there is stock but it is selling very quickly?

A lot of properties are selling very quickly (personal experience as have just bought somewhere which didn’t even make the web) but I think a lot of the sales are new homes so may not be listed on Rightmove etc. The demand isn’t just related to SDLT….the place we bought was in a price bracket where SDLT wasn’t a big factor in cost. There were still ten viewing in three days and three people offered asking in the first week.

[sideways sid]

Re:150% Coucil Tax, if you're renting it out for the three years, the tenant pays Council Tax, but if you'renot renting it out and one person lives there, they will get a single person's 25% discount, so you'll be paying 75% Council Tax.

If (assuming you are half of a couple) the other person continues to live at the current residence, they would get the same discount too, so 75% at each home instead of 100% plus 150%.

[timberman]

red_slr said:

timberman said:

which would also suggest that there is still an infinite number of people in the same position,

this to me doesn't add up, there can''t be that many people who are either willing or able to keep paying these ever increasing prices

I dont think its quite that simple. We have been looking to buy in an area of Cornwall for the last 3 years.
Back in 2019 there were usually between 50 and 70 properties on the market.

At the time of posting this there are 7. It was 6 at the start of the week.

There is just not stock on the market, that IMHO is whats driving this now.

Yes back in April 2020 the boom was started by the SDLT reduction but now 15 months later the lack of stock is what is driving it.

And thats a chicken and egg situation and like you say it looks like this could continue for a while.

I think it will take 2-3 years to get back to anything like "normal" on the housing market as the traditional April/May and Sep/Oct busy time in the listings market is just not going to be there because stock is not building back up.

I think the only exception to the rule is if you want to buy a flat in a city. That seems to be a fully stocked market at the moment - for obvious reasons.

Just my 2ps worth.

Yeah I've noticed good properties seem to be a bit thin on the ground lately,

we're also looking at moving to the south west and started doing research about 18 months ago,

we started by looking at Devon and then Cornwall as second choice, we've now added somerset and even Norfolk to the search in the hope that we might find something suitable withing budget,

early last year there were quite a few properties we liked the look of all within budget, unfortunately at the time our money was tied up and no way to access it so we had to wait,

now we're in a position to buy, everything has gone up in price, so much so that the kind of houses we were looking at last year are pretty much out of our reach, and what we can afford is either too much of a compromise or looks massively over priced,

we were hoping to be cash buyers, but that looks unlikely now without seriously lowering our expectations, and if we have to go down the mortgage route I think we might struggle qualify with us being retired,

My wife is now of the opinion that we hang on for a while and see what the market does,

I'm just quite disillusioned with it all,
and I'm sort of hoping that the whole market crashes quite badly as a kind of kick in the teeth for all the people who've been happily paying over the odds and squeezing everyone else out of the market.

I'm trying to be optimistic that the number of people who are able or willing to keep paying these ever increasing prices will start to dry up soon and then the market should slow down,

hopefully then the Estate agents and anyone selling will have to be a bit more realistic with their asking prices and actually bring them into line with what most buyers can actually afford,

but that's probably just wishful thinking.