Thursday, Mar 01, 2007
Could the US crash happen here?
Citywire.co.uk: Property: Could it happen here?
Rising interest rates, bad debts and falling house prices have started to hit the US sub-prime market hard, usually the first sector to suffer in a downturn. As interest rates start to rise here could such a trend begin to affect the UK market, heralding a return to the bad old days of the 1980s, asks Lorna Bourke.
Posted by cash_buyer @ 07:21 PM (204 views) Add Comment
2 Comments
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1. cyril said...
Interesting bit about the dilemma facing BTLs - if the landlord sells the property because the rental yield is too low to cover the mortgage, he or she will still have to pay capital gains tax on the property if it has gone up over the years. I hadn't thought about that but presumably they don't pay CGT if they re-invest the money in another property?
2. Sam said...
I'm not a tax expert but i think you have to pay CGT on a BTL/Second property when you sell it no matter where the money is gonna go after that.
I've seen a lot friends pull a fast one by selling the place they've 'lived' in and move into the property they've been renting then sell that after the minimum amount of time to avoid paying tax on it. it's a easy scam, almost as easy as people getting the best mortgage deals by pretending to plan to live in that overpriced two bedroom flat.
I think landlords will do their best to see it through, perhaps using their salary prop up their BTL 'business'. but some will be forced to sell if/when they lose jobs/income.
I can imagine the Landlord/Tenent relationship being similar to Rising Damp. -- bitter old miser Rigsbys with mentally balanced happy tenants.