Capital Gains Tax overhaul
It is a disaster
Property boom ahead for North East and East London
Up until now, nothing existed between the Picadilly and Central Lines. However, with TFL taking over commuter lines from Liverpool Street this Sunday, it is all change. London is so large, that most investors and newbies know it by the tube map. Expect places north of Hackney to act as a pressure valve now. For example, a two bed home will set you back Â£850k in Stoke Newington, but you can get the same size property, possibly with need for updating, at just over Â£250k in Edmonton. For less than a 1 bed flat in Hackney. With Hackney'ies aware of what London Overground did to their patch, folk will not hold back from investing in these new hinterlands, particularly those now priced out of Hackney. Areas towards Chingford will also soar, whilst there should be steady rises along Crossrail.
Shelter trying to frame a longstanding issue in a new light
'âTo discriminate against landlords and remove these reliefs, which are offered to other businesses, would cut a swath through their profitability calculations and prompt many to sell up and invest elsewhere. That would mean even higher rents for those forced to chase after a shrinking pool of rented housing,â he warned.' Who does this idiot think the houses would be sold to, if not the wealthiest tenants, whose removal from the pool of people looking for flats to rent would surely push demand down by as much as supply, in quantity terms, and more so in price terms, since wealthy people are prepared to spend more on rent? I'm really sick of this nonsense going unchallenged in the press.
Expected spike after election
A family or a house - your choice
It is sensible for banks to look at mortgagees costs but under the UK's tax system whereby single income households are taxed at a much higher rate than dual income ones, more and more couples have to choose between having children or ever owning a home. The only way to escape single income punitive rates is to become a contractor under a limited company and distribute dividends to the non-working spouse, but this just about rules you out for a mortgage anyway. Quite a few people who I worked with have done this, but they all have lots of home equity and/or long fixed rates so can sit and chomp down the mortgage. After a few years of contracting banks will look at you again, but with caution as they don't have a permanent pay cheque to trouser.
Positive Duration Dependence
It's pretty clear that this blog has attracted doomers (myself included) who have been too negative in their outlook but some financial commentators are a bit worried: "Stephen King from HSCB warns that the global authorities have alarmingly few tools to combat the next crunch, given that interest rates are already zero across most of the developed world, debts levels are at or near record highs, and there is little scope for fiscal stimulus. 'The world economy is sailing across the ocean without any lifeboats to use in case of emergency,' he said." Perhaps we'll be fine but further financial stimulus could be tricky.
Bbubbles are social-psychological phenomena, so are naturally difficult to control.
A speculative bubble is a situation in which news of price increases spurs investor enthusiasm, which spreads by psychological contagion from person to person, in the process amplifying stories that might justify the price increase." This attracts "a larger and larger class of investors, who, despite doubts about the real value of the investment, are drawn to it partly through envy of others' successes and partly through a gambler's excitement."
Just a shortage of affordable houses
That there is a chronic shortage of housing in this country has become a sacred shibboleth. Politicians make solemn pledges to build 200,000 more homes by some vague future date to offset this supposed shortage. But the market is still way off the volumes of previous decades. Is there really a shortage of property in this country, and is this the main factor in ever increasing prices? Merryn doesnt seem to think so.