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Heading South

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  1. Heading South

    Rich To Lose Their 'subsidised' Council Homes

    As I said, if legislation was introduced to force down rents in the private sector, then many landlords would simply pull out of the market all together. There is already a scarcity of rental properies in many parts of the SE now and this would further constrain supply. I agree rents are far too high in relation to typical salaries, but the laws of unintended consequencies would kick in (ie severe shrtage of rental properties).
  2. Heading South

    Rich To Lose Their 'subsidised' Council Homes

    Sounds tempting, but the likely consequence is that many BTL landlords will pull out of the rental market all together and sell up. So increased supply (and falling prices) of properties to buy and reduced supply of rented property. On a positive note, this would reverse the trend over the last 10 years, whereby FTBs were priced out of the house purchase market by BTLers - a major factor in the property price bubble. Going back to the original topic, if 6000 council house tenants are on incomes above £100k pa, just how many more are on say, £50K or above? Must be in the tens or even hundreds of thousands. It can't be right for people on these incomes to have subsidised rents when lots of young singles and couple are struggling in the private rental market. This subsidy has to come from the rest of the population as the government / LAs don't any have money of their own except that which they extort in taxes. If the high earners wnat to stay in their council house, then their rents should be increased to at least, or even above, full open market value.
  3. Heading South

    French Property

    Yes - my thanks as well for your informative post. It's good to hear other people's experiences and views.
  4. Heading South

    French Property

    Wow, that's a bit harsh. The OP was only giving a rational explanation - a personal cost/benefit analysis as it were - as to why they were planning to sell up their French property. I found it an interesting perspective on the subject. But for some reason you felt it was ok to vent your spleen at them. Got out of the wrong side of bed ....or has it touched a raw nerve somewhere?
  5. Heading South

    French Property

    So just how big is the proposed new tax? I understand that the new tax is 20% of the valeur locative cadastrale. Tax fonciere is also based on the valeur locative cadastrale but anyone any idea what % rate is levied for that - 10%, 20% or 50% or what? If 20% then the new tax will be the same as, but in addition to, the tax fonciere. Looking at this another way, if the French government hope to raise €167m from 360K owners, that's around €463/ average per property - not a huge amount. But maybe in subsequent years the tax will be raised to 50% or more.
  6. This could well spell the death knell of the Place in the Sun mentality, at least as far as France is concerned. A number of factors have caused things to go sour in recent years: The £/Euro exchange rate, which at one time was better than €1.65 is now trading in the €1.10 to €1.15 band. This impacts not just the purchase price (£150K that used to buy €250K’s worth of house now only stretches to €170K) and day-to-day living costs (a real problem for expats reliant on a fixed UK income stream such as a pension). The withdrawal of French health benefits from “non-activ” early retirees. The collapse of easy mortgage facilities which previously allowed many Brits to release cash to buy abroad by MEWing on their home in the UK. Those Brits who bought years ago may have been fairly sanguine up to now and prepared to hold on to their 2nd home in the Dordogne or wherever. However this new tax will be an additional substantial ongoing financial penalty, and I can see many owners keen to bail out. This can only depress prices in those areas previously popular with 2nd home owners. And it won’t just affect the Brits; the Dutch and other Europeans who have been insulated from exchange rate fluctuations may decide this is an expense too far. Even if there is not a large exodus, I can’t see many potential buyers, so prices can only go one way – and that is down!
  7. Good point. Higher taxes on scarce resources has the benefit of reducing demand on those items. When governments are struggling for tax income, then it seems reasonable to skew taxes towards non-essential items, such as second homes (and BTL vultures), and away from essentials such as food and shelter (ie primary residence). In the days before VAT, purchase tax was levied at a much higher rate on luxury items. Time we went back to this given the parlous state of public finances in Europe. The UK should do the same as France and slap hefty property taxes on non-doms and other foreign investors. But it won't.
  8. The question is just how big a bill will this be for the typical second home in, say, the Dordogne. Are we talking about a few hundred Euros or several thousands per annum? If this tax is only a few hundred then not a big deal, but if it's in the thousands, it could have a major impact on this sector of the market. According to the press reports, the tax will be levied at 20% of the "valeur locative cadastrale", which as I understand it, is a notional rental and not necessarily the same as the true market rental value. The Tax fonciere is also based on the valeur locative cadastrale, so does anyone on this site know what the percentage rate is for a typical tax fonciere? Obviously that varies from one commune to another but if, for arguments sake, the tax fonciere is 10%, then the new tax will be double that of the tax fonciere.
  9. Heading South

    French Property

    Thanks, Redwine, for that snippet of news. If this tax is actually introduced, it would have, in my view, a profound impact on the market for holiday homes that attract the Brits and other non-French residents. Depending on the level of the tax, this could decimate that sector of the market. Perhaps HMG should look at introducing a similar tax in the UK and curb the purchase of properities in London and the home counties by non-UK residents. Or would the figleaf of EU legislation (which the French conveniently ignore) be exploited to prevent this? I am against any disproportinate increase of property taxes on primary residences, but second homes are a luxury and should be fair game for significant tax hikes when government coffers are bare.
  10. Little in the way of new property coming on to the market in the £500K+ price range in this area (West Sussex). Most people seem to be hunkering down and staying put. I believe the cost of moving these days (particularly stamp duty) is a major factor in the collapse in the number of transactions in recent years. Clearly that erstwhile chancellor and prime minister (McBroon) either never heard of the Laffer Curve or deliberately choose to ignore it when raising stamp duty from 1% to 3% (4% for £500K+). Such a high tax penalty just grid locks the market and is a barrier to skilled labour mobility. When prices were rising rapidly, most people seem prepared to absorb these transaction costs. But with prices static or falling, it's a different matter. If Ozzy wants to loosen the log jam and bring more houses onto the market, he would halve stamp duty for all prime residence purchases..... and triple it for 2nd home and BTL purchases!
  11. Heading South

    What % Of Properties Have A Mortgage On Them?

    Ah.... the old downsizing chestnut! I see very little evidence of empty nesters downsizing. Sure, some do, but in my experience, they are very much in the minority. For most of that generation, downsizing is just not a serious consideration. They are generally happy living where they are and don't relish the upheaval of moving away from the home they have lived in for many years, and leaving behind their network of neighbours. And despite the prejudices on this site, most have paid off their mortgage and manage within their means. Besides, it makes little financial sense. For example, consider someone downsizing from a £600K house to a £350K property. The costs of moving will include: - 1.5% estate agent fees +VAT = £10,800 - Solicitiors fees for selling & buying = £1,500 (say) - Stamp duty @ 3% on their new house = £10,500 - Removal costs = £2000 (say) ie a total of £24,800 - and that excludes the costs of getting their new house fitted out to their needs + furinishings, etc, which could easily add another £5 to £10K bringing the total cost of moving to £30K to £35K Sure, they have released £250K of capital but at current interest rates, they might only get £4K / year after tax. Even alowing for reduced heating costs and council tax, that's still only a benefit of £5K /year. From a business case perspective that represents a payback period of 6 to 7 years, a timescale many commercial businesses would turn down. I'm afraid most oldies stay in their existing house until ill health or the grim reaper forces them to leave.
  12. Heading South

    The Good Life....

    I agree with you that house prices have far outstripped wages & salaries since this programme was made in the 70s. However I think you are totally wrong to assume that most boomers don't want prices to fall. All the boomers I know (and I include myself) would be only too happy to see prices slashed. Most of us have been looking on for years at how cheap money and lack lending policies have allowed prices to soar to unsustainable levels. In my view at least a 50% fall is required to bring affordability back to sensible levels. So are we all pretending to be altruistic but secretly hoping prices stay high? I don't think so - it's more to do with enlightened self interest. Reduced prices would lower the cost of moving home (through less stamp duty, etc) and more importantly allow the boomers' own offspring to buy a home to live without having to raid the bank of mum and dad. Also, I see very little evidence of older people trading down to take advantage of high prices, so amongst the public it's really only the BTL brigade who don't want to let the bubble burst. But we only have to look across the Irish Sea to see why the UK establishment is so desparate to keep the bubble going. If prices did fall by half, you just wonder what any government could do to prevent our banking system collapsing.
  13. Precisely. I read this article twice, and could find no hard figures which supported her statement that " pensioners are .......more likely to let their spending accrue interest". The article does indeed quote figures for the increase in credit card spending by pensioners, but where is her evidence that they are letting their debt build up rather than paying off their credit card bill in full every month? It could well be that pensioners see inflation as a serious threat and are just spending their savings while they still have some value. After all they've seen this all before in the 1970s when inflation hit 25% and think "what the heck" and bring forward the purchase of goods and services before their savings are next to worthless. As to why this expenditure flows though their credit card, its pretty obvious. Convenience, ability to buy online (which older people are doing more than ever) and better consumer protection. Without more hard numbers from 'Emily' we simply don't know if they are building up debt.
  14. Heading South

    250 People For One Job

    Of course you should select the best person to do the job. However from your earlier post it appears you are prepared to reject candidates just because they tick the box that says "not young". Did the over 50s candidates have the experience and skills to do the accountant job, or had you already made up your mind from the outset that the because of their age their face did not fit? And by your own admission you chose the 18 year old for the receptionist post because she was "cute", a characteristic not normally attached to someone in their 40s (or a male for the matter). When I've recruited people in the real world, I've assessed them on their skills, experience, aptitude for the job and attitude - never on age (or sex or ethnicity or whatever). Indeed, many of the older recruits have brought hard-learnt experiences and wisdom which have helped us deliver some really tough programmes on time and on budget. And I have not found older workers to be any more or less flexible or adaptable than their younger colleagues. As well as exposing yourself to potential legal action, you really are missing out on a trick if you narrow your selection criteria to those of a certain age range.
  15. Heading South

    250 People For One Job

    And what, precisely, has age got to do with your selection process? Are you suggesting you discriminate on the grounds of age? I'm sure you know that legislation to prevent this was put on the statute book in 2006 andleaves you exposed to legal action.
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