Patient London FTB

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About Patient London FTB

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  1. New peak for London FTB prices at £429,666 in Land Reg figures. Former peak was £427,685 in Aug 2016.
  2. Further confirmation of that in a survey published by HomeLet today: 52% of all the landlords we spoke to are looking to raise rents - that's down from 57% in 2015
  3. Some Croydon news hot of the press from Property Week. What's the Chinese for 'patsy'? Chinese developer R&F Properties has bought the iconic Nestlé Tower in Croydon and surrounding development sites for a price believed to be just under £60m, marking its debut buy in European real estate, Property Weekcan reveal.
  4. More musings on selling up from the Evening Standard's Accidental Landlord this week. Looks like she has reached the bargaining phase. To recap, she lets four properties in south London and has been aware of Section 24 for a long time but has been putting off a decision on what to do about it. A few weeks ago she went through her options and figured out that raising the rents was going to be pretty difficult. This week she has got to the position of I could sell, but oh my the capital gains tax is so big and I don't know where to invest the money. We're told that one of her tenants has "out of the blue asked if I will sell him my flat" and this is well-timed as she had been thinking of getting rid of it due to Section 24 and her and her husband need to spend at least £20k on it to keep it in good condition over the next two years. Ah, but selling a flat that has doubled in value and reinvesting the profit in something else is apparently not a no-brainer (well I guess not if you can't invest in anything else with IO leverage). She writes they will "lose" a large chunk of their profit in CGT and legal fees (did they not realise that when they invested in property in the first place?), then goes on to outline the drawbacks with alternative investments. Pension returns aren't as exciting as profit on property, while ways of avoiding CGT such as the Enterprise Investment Scheme or the Seed Enterprise Investment Scheme are risky. So she gets on to the idea of selling the flat and buying another BTL property in a city with higher yields but says the CGT, legal fees and stamp duty surcharge put her off, so she is going to hold on to the flat. We aren't told anything about the rental income but the implication is she can withstand the Section 24 wedge. I think the column is pretty illustrative of where the average landlord - not the Property 118 super-leveraged crew - is at the moment, but also shows the effect of the government deciding to keep property CGT at 28%. The govt does want to squeeze out BTL gradually, but it doesn't want to provoke a crash with a rush for the exits, and the 28% CGT is a good way of disincentivising existing landlords from selling.
  5. Thanks Lavalas, I wasn't wrong after all then. I've actually tracked down the article now and it quotes Tincknell (Battersea Power Station chief) as saying: "We have 3,500 workers on site but we have inducted four times that because people keep leaving. I know one housebuilder who had 15,000 workers on site before Christmas and after Christmas only 11,000 came back."
  6. Now think I've misquoted the article, sorry. Workers leaving but not sure a number was given. It's behind a paywall and I can't get to it to check right now: http://www.thetimes.co.uk/article/builders-quit-britain-over-brexit-uncertainty-and-weak-sterling-xpf5xf76l This tweet by the journalist offers a bit more:
  7. Like your thinking. I would throw in the rent strike movement rippling around a few universities at the moment. Too early to tell if it will build into anything that has real impact, but interesting to think that having punished the Lib Dems for tuition fees students might be looking for a new issue to bash politicians on.
  8. I agree. I think the current bubble's vulnerability has less to do with bank balance sheets than other factors such as: Politics - renters get big enough as a group that politicians have to bow to reform of the PRS, reducing the appeal of buy-to-let Supply shock - after years of complacency about us not building enough houses people suddenly realise there are more coming on than they bargained for Demand shock on the renting side - the number of renters comes up short, whether from people opting out and living at home, or people actually leaving the country (has anyone seen the report that the chief exec of Battersea Power Station has claimed that another unnamed developer has seen 4,000 foreign staff just not come back to work after the Christmas break?) Demand shock on the buying side - poor press for the quality of newbuilds puts people off buying Sterling slump - foreign buyers (and the banks who lend to them) get scared off
  9. Take-up of London HTB is much lower than non-London HTB though: Help to Buy loans were used to purchase 76,559 homes outside of London between April 2013 and April 2016. This is equivalent to 30% of the 255,960 privately built new properties completed in that period. In London, there were 4,483 completions using equity loans, equivalent to 11% of the 41,480 privately built homes over the same time. Source
  10. Demographics for BTL is interesting. BTL property ownership clustered in the hands of 50+ year olds, so in about two decades maybe a lot will come back on the market at once.
  11. Yep - but afaic let them go over the top. It's their sacrifice in buying first that will deprive landlords of good tenants and thus undermine prices in the longer term.
  12. "recent statistics, such as the downturn in rents in London and the South East are not helping our arguments"
  13. Am I right in thinking that CGT applies both when the property was originally sold to this company and when the company is sold?
  14. A repayment BTL mortgage? What's that?
  15. Nothing goes down in a straight line. We've just hit a pocket where sellers have been softened up and a few buyers see an opportunity. EAs and developers will want to talk up a recovery, and the media will want to cover it because it's surprising.