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Everything posted by thom123

  1. Yeah, that's how I understand it too. There's an actual, cashflow loss but, in terms of HMRC, there's a paper profit i.e. 20k income, 12.5k interest (actual is £25k but HMRC only recognises half of it), so £7.5k profit @ 40% = 3k. Same result as you though you probably expressed it better. Another aspect of this is that in the above scenario, the actual loss and the tax bill would presumably have to be paid for from the landlord's post-tax employee (or other source of) income. It couldn't be offest against their employee tax bill.
  2. Of course, there will be various ways to mitigate the effect, the most obvious of which will be to move the properties into a Ltd Co, which, as it means selling the property from the individual to the company, will incur CGT at the point of sale - so a nice little tax take for the government, if the property has risen in value.
  3. Yes. though, to be fair, is his costs are 90% of his turnover, at a time when the base rate is 0.5%, he was going to be f***cked sooner or later. Those hardest hit will be the ones (assuming higher rate tax) who have high leverage and low yields - which is ironic because they'll be the ones with the lowest 'real' profit.
  4. I think he's just wrong. I think that at 100k income, 80k interest and 10k other costs his real and paper profits are 10k hence £2k tax bill for basic rate, £4k for higher rate (so £6k left as post-tax profit). On the new system, as a basic rate tax payer everything remains the same. As a higher rate tax payer, his paper profit becomes £50k hence a tax bill of £20k rather than 4k (so £-10k as post-tax profit). I doubt his example is that realistic, mind. OK, just fully read your post and see you also think £20k tax.
  5. That sounds correct to me (though let's face it, anything to do with tax is horribly complex). Effectively, I think the impact is that the 'paper' profit is increased by 20% of the mortgage interest cost. But from a cashflow perspective, the full mortgage interest still has to be paid, so it could result in a situation in which the landlord makes a 'real' loss (i.e. they spend more than comes in) but still shows a 'paper' profit and therefore has a tax bill. On the wear and tear allowance, that only applies to furnished lettings and I think works in a similar way to the flat rate VAT scheme f
  6. Spreadbetting market has opened with a 2% drop in the FTSE: http://www.ig.com/uk/ig-indices/ftse-100
  7. I can imagine the rates offered by the providers being (relatively) generous as it'll be a marketing tool for attracting people to hawk a mortgage to.
  8. Hi Bootstrap, where in Watford are you? I'm working down there at the mo. £1000 does seem steep. You can get 1 beds for around 650 and 2 beds for 800. Seems to be a new build development springing up in Watford every few weeks.
  9. I didn't mention hassle or intertia, but tax-leakage, transaction costs or any other financial aspect involved has to be considered when comparing the returns of selling or holding and may, therefore, represent a good reason to hold. Wouldn't you bear in mind taxation when comparing a cash ISA and a taxed savings account? Inherently, the most diversified investors must be (to some extent) invested in property!
  10. There are other, less pejorative, reasons for holding a low-yielding property: 1. It may be high-yielding when taking the purchase price rather than the current value. If the LL is not intending to retire anytime soon, the effect of CGT and transaction costs might outweight the benefits of selling up when prices are high (and therefore yields are low) and buying again when prices are low. Better to simply ride the waves and stay in the market. 2. It might be a retirement property or dream home that the intend to move into in 15 or 20 years time. The odd fluctuation isn't that important to
  11. I think that's harsh, bambam. Over-spending is a recognised symptom of bipolar disorder - I don't think her behaviour is as reckless as your 'cash on enjoying herself' comment suggests. Of course, she could be faking it, but as she has attempted suicide several times and self-harms, she's doing a good job of pretending. If the bank are lending irresponsibly (according to the post, they knew of her condition) then I believe they're in breach of the regulations. I've worked in a building society and a bank and know that they target those on low incomes, the financial illiterate and now, seem
  12. Ah Gudjon!! His other son was Thordur. Gudjon was responsible for one of the happiest moments of my life (beating Cardiff in the play-off semi-final). I might have to buy the plave for the honour of peeing in the same toilet as him!
  13. Which ex-Stoke manager, Amoeba? D'you have a link so I can be nosey?
  14. I'm in Fenpark, near Longton. It's nice enough where I am but I'd prefer somewhere a little greener, so I've been looking at Barlaston, Stone, Stafford. Also, I work down South and Stafford has a good train service to London. Stafford prices do seem very high though - were they always that high in relation to Stoke or has the toll road and fast train service to London caused a bit of extra speculation, I wonder? Any idea what the average wage is in Stafford? In Stoke, it's 17k which makes the average price of 95k seem high. That said, I read in The Sentinel that more people are moving from Sto
  15. Stoke here. I wonder if we're seeing the 1st signs of prices stalling in Stoke. I see a few places sitcking and being reduced, plus some new places coming on to the market at slightly lower prices than I'd expect. Still, way more expensive than a couple of years ago though, and too much for me to justify moving up to something bigger and better. One set of properties I follow closely are the new(ish) builds on Trentham Lakes. There's a ruck of them for sale now (I think a lot were bought up by investors who found that they don't rent for much). What amazes me is that most are now on at 165k,
  16. Yeah, I've been watching that one too. I've spotted the price jumping around but haven't really tracked how it's moved. Is the latest price really 175k though? It's also listed on rightmove at 150k. Is it really opposite a kebab shop!?
  17. I don't think those measures are that real. I don't know of anywhere in the country that has an average salary of 15k, yet an average house price of 200k. Where I live, the average salary is 17k and the average house price is 95k. Could I ask where you live and work? Even the average salary -> average house price calcuation is probably flawed. I'm guessing that the average house has 2 bedrooms, which is more than a sole buyer needs. Even a couple who have, or want, children, will most likely have either a part-time or full-time 2nd income for some or all of the term of the mortgage.
  18. Yep, same for me when I FTbought. Sep 99 just before a series of rate rises (I was too young to know how good rates were and get a fixed). I had a tough spell of about a year when I struggled to paid bills, borrowed of CCs to get by. Soon got better though and the current payment of 225 isn't too tough! I do think prices are dangerouslyhigh in some areas, but is amazing how people can normally find ways to get by.
  19. Amazing that it was just 15 pounds a month for the capital - I hope you made overpayments!
  20. If your salary of 21k is the average for your location, then it's around 25% lower than the national average, so presumably local average house prices are less than the 200k national average. Most people don't buy in a more expensive area then commute to work in a cheaper area! Assuming local prices are 25% lower (in line with salaries) than the national average, you're looking at 150k which means an I/O figure of 625pcm, meaning you now have around 300pcm for clothes, going out, etc. I'll assume that's ironic. When exactly wre interest rates 20%?!
  21. Ha! I used to work in Meir and my sis rents there. Not the best area, but 'normally on fire' might be a tad harsh! 70k for a 3 bed, outdated, ex-LA semi in Meir does seem extortionate though, doesn't it?
  22. Easy! That's my home town you're talking about. Stoke has it's good and bad points, but I can't see any reason why prices would rise here. There aren't many well paid jobs here and prices have more than doubled in the last 5 years despite the fact that the area hasn't fundamentally changed. Stoke was called as a 'hotspot' a few years ago and a lot of investors bought here. Quite how buying here now would qualify as 'bottom-fishing' I'm not sure. Yields on B2Ls here are low: a £65k terraced would only rent for about £350. So the article seems to imply that Stoke is their pick because of ant
  23. Hi Van, I'm looking to protect the rise in my FTSE tracker also and, as you say, I think it would be better to hedge than sell up (partly because I can see that a few people might illogically buy in now that it's risen). How would I go about shorting it? Is there any other way of hedging (buying a put?). As an example, if the FTSE was 5,200 and I'd bought 10k at 4,800 and wanted to protect any gain over say 5,000, how could I do it? I've read a little about hedging but no-one ever seems to give a practical guide on how to do it! Thanks, Matt.
  24. I'm keen to learn more about investment in the stock market, commodities, gilts and bonds. I've started learning about these areas now that the housing market seems to be fcuked for a few years, but I don't feel as though I know enough to take the plunge in any serious way. At the moment, I have some index trackers that have done very nicely. For now, I'm looking for investment strategies that are based on buy and hold as I don't have the time to put in the necessary study for short-term investing or the necessary capital to cope with large fluctuations / risk. I'd still like to learn about
  25. Bit cheesy and salesy but some interesting stats in there: http://www.fsponline-recommends.co.uk/page...0305b&u=appsk05 One thing I didn't get was the idea of spread betting to hedge against price values falling. Surely and spread bet would have the expected falls priced in? Am I missing something?
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