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Harold Bishop

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Everything posted by Harold Bishop

  1. + 1. Inflation is on the increase and once it feeds into wages, cost of services etc , then it will really take off. At this point cash savers will be destroyed. We're not quite at this point yet but the signals are all around. Eg FFL now targeting second steppers. I would also say buying good quality equities that pay dividends as well as hard assets. Historically, Property and land tends to survive infaltionary periods pretty well and attached debt shrinks. It's not a popular view on HPC to suggest buying property but with the Gov inbetween a hard place and a hard place and printing, it could work out ok.
  2. In both those negative equity examples from Lloyds, there needs to be a margin call by the bank on the mortgage holder. But the bank have just made the margin call on the Government and hence it's people.
  3. Because the tax take wouldn't have been that high ( see my post above). Most either paid it, rolled it over or had legitimate reasons for it not to be applied. It would have been a lot of work for not much return. By contrast, the tax losses from "undeclared" rent ( or unearned income as HMRC call it) on BTL is probably massive and I suspect dwarfs any CGT liabilities. I doubt most accidental landlords even fill in a Self Assessment Tax Return. That really is a lost opportunity for the tax man and pretty easy to chase up, since, it is an easy check to see who is registered for council tax and who is the owner. Different names would strongly point to rental income.
  4. Don't know now but before the changes to the fixed percentage ( I think ?) you got a 75% relief on the gain if you held the asset more than, I think, ten years. Then the CGT was charged at your tax rate. So, a £200K capital gain split over two owners who held for ten years and were lower rate tax payers with a CGT annual allowance of say £8500 (at the time before the change) would each face a CGT bill of around less than £2000. So, not too much. Take off a few" improvements", legal costs for the sale, EA fees and the figure drops. I think fairly recent changes to the CGT law was to end all of the complications listed above and I think the tax take will be higher. If I were the HMRC I would dig into those that sold after the CGT changes came into play and who had privately owned the property for around 7 - 10 years. Probably quite good pickings there.
  5. A lot of second homes will be embedded in company accounts as many are businesses. Then you have to consider legal and estate agent fees, taper relief, improvements, dividing the gain between owners, as well as roll over relief, principal residence etc. It's not just a 5 minute look of Land Reg, it's abit more involved than that. The CGT yield is probably far less than the obvious headline figures. Most will have paid the tax or dealt with it as a roll over.
  6. It's generally higher than that. Many businesses require significant sums and more than can be saved up. Every time I look at finance for a new project we have been working on the rate is around 9% plus directors guarantees plus charges over private property. It's a complete waste of time using high street banks for SME lending. Far better to go to equity investors, angels etc. People who understand business. I'm not surprised this FFL to SMEs is down. The UK high street banking sector only really knows one business and that is property. Almost every other business sector is beyond their grasp and "computer says no".
  7. Same old, same old messages. Property is very affordable because of low interest rates etc. And the studio expert stating a fall in house prices would be a disaster for banks, economy, negative equity etc. It's all about getting lending going again. Load of tosh. HPC will be postponed indefinitely with expert views like this.
  8. Good post. Yes, agree the UK, EU and US economies are eerily quiet. I would add, stock markets have also bounced up with no obvious signs that companies are booming. All the new money creation should have shown up in the bond makets but yields are still incredibly low on 10 year bonds. how long we have to wait for the bond markets to react or unshackle themselves from the QE programmes is anyones guess. The bond markets act as the counter balance but right now they are neutered allowing cheap money to maintain hpi.
  9. Gigantic Purple Slug has pretty much hit the nail on the head in every post in this thread. I would add, high street banks are not the place for business funding for meaningful business lending. They are far too short term & have near zero business knowledge. They only (think) they understand property which is why any finance discussion with a high street bank immediately reverts to putting one's house on the line. Other viable sources of finance are friends, family, angels, the odd government schemes that lend against business assets etc. Venture capital is hopeless for start ups but they may be useful for going concerns wanting to grow aggressively. Just use the high street bank to manage your cash and make sure you keep switching banks to keep the 'promotional' free business banking deals. No loyalty required and received. The US and a lot of Europe seem to manage to fund new and expanding businesses. It's seems to be the UK has an inability to do this and the banks are the worst offenders, always retreating to the entrapment of their comfort zone of property.
  10. Two of my kids have left the UK, probably for good. Both with very good degrees and employable. It simply isn't on their radar to even consider buying house in the UK. My pal and his family have just upped sticks and gone to Australia. He and his missus both in much better jobs. I've been offered two great jobs in Aus as well but for various reasons can't consider moving. The numbers leaving and the quality of those leaving, for good, doesn't surprise me.
  11. Not in my experience. I was a 100% cash buyer in rental and had a 90% LTV mortgage buyer in a chain put forward as the best buyer. The agent's mortgage broker was arranging the mortgage. When I found out, I told the agent I wasn't interested any more. Edit: Our offers were within a fag paper of each other
  12. Laura Ashley, Staples, Argos and as a longer shot, another DIY chain, maybe, Homebase or Wicks.
  13. Jessops are another shop that I'm amazed is still open. What cameras and lenses stock ( and we mustn't forget they are a camera shop) they have in their shops is very limited and expensive. I don't even bother looking at their web site any more. Both their high street shops and web site are rubbish.
  14. As far as I know, the only debts that cannot be discharged in a bankruptcy court are criminal fines, student loans and I think child support debt. Either partner of the divorce cannot be wreckless or deliberately destroy their wealth/business just to eliminate assets and then plead poverty. But if, say, a husband's or wife's business genuinely failed before the settlement, then the wife/husband would have to accept that the joint matrimonial assets have reduced in value.
  15. Someone at Oxford took their eye off the ball. 8.5% in the last ten years. And that includes a few pre-crunch years.
  16. I think this is a key observation. Your parents bought a three bed house. That was big enough to raise a family in. The room sizes would have been ok and it would have had a garden where you could grow some fruit and veg and maybe a shed for bikes etc. Pre-kids, they probably rented a cheap as chips flat and were able to save for a deposit. The £3000 house may even have been a first house and certainly would have been perfectly adequate. By contrast, a starter home today is completely inadequate for a family of, say 4. My folks first house was a bungalow in Norwich. Well, the bought the plot on an estate and had a builder construct a two bed bungalow. It has a bl**dy huge garden and garage. I think that was around 1956 and it cost less than £2000 ( £41,000 in today's £) I know the comparison with cars is poor since modern cars are far better equipped, reliable and longer living. It's just an observation really and a bit of a reality checker.
  17. A few back of a fag packet sums for you. On a programme last night about the popular British sports cars of the 1950s & 60s put the very popular MGB GT at a shade under the magical £1000 price tag ( including purchase tax) in 1964. From my research, that is about £17,000 inflation adjusted for today's money. That pretty much gets you a Mazda MX5 base model. So, similar cars for similar money. Which surprised me. I thought the modern car would be much cheaper. Anyway, old cars were very basic and new cars are very advanced, so, the comparison is a bit rubbish but bear with me. Nationwide figures put the average house price at a shade over £3000 in 1964. So, the three MGs = one house in 1964. Three Mazda MX5s = £51,000 = not even a squalid flat today. It's no wonder that once you had bought your house in the early sixties, you could afford a nice little MG Midget of Austin Healy Sprite for your wife to run around in. By the way, the average wage was £832 = £14,000 today but I guessing little income tax was paid at that level. Maybe a poor example but still I think it shows how ridiculously high house prices still are.
  18. Something like this http://www.carandclassic.co.uk/car/C329461 It's been converted to LPG. The ad says it does 25 mpg but LPG is around 72p/litre. If you are handy with the spanners, that old Merc will see most of us out. Not a cam belt in sight and spares are available and cheap. But rusty body work would kill the the running costs.
  19. It didn't pannier out for them. A spanner in the spokes of recovery. Couldn't handle the high bar of the competition. I'll go now.,
  20. You need about 12 - 15% moisture content in the feedstock. Fresh grass is probably 80%. You could dry it, make hay and run a horse. edit spelling
  21. The Brick Lane area will be a popular destination for visitors.
  22. Thanks for highlighting this. It's more than just builder's skips. A while back, WRG, a very large Spanish corp who build and operate waste incinerators won an a appeal during the Brown government. They were then allowed to dump the bottom ash from the incinerator into landfill at the 'inerts' rate of £2.50 per tonne instead of the full rate which is now £64/tonne. HMRC are still smarting from losing this appeal. WRG' argument was that the bottom as was inert and stable. This of course may be the case if the incineration was correctly burnt reaching the right temperatures. The reality is that some 30 - 40% of what goes into an incinerator comes out as bottom ash and being allowed to dump it at the £2.50 rate was in fact a massive government subsidy for the incinerator industry. I'm pleased that HMRC have done this as hopefully, this along with the Waste Hierarchy rules will finally put the hateful waste incinerator industry out of business.
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