chas

I'm interested in the CGT issue, poor leveraged Btls can't sell as they won't have the equity to pay the CGT. does HMRC use land registry info to collect CGT? Or do they rely on BTLs to self report? if so there must be billions in unpaid CGT out there as most of the muppets don't realise that they might be liable? chas

Not all Govt worker pension schemes are unfunded, for instance local authority workers have a funded final salary pension scheme that has built up assets from both employee and employer contributions, I pay 7% of salary into the scheme. Currently the scheme is not 100% funded, currently at around 80%, but still much better than many company final salary schemes.

Interms of the relationship between buying and renting in Bath.........I think that the number of houses for rent pages in the Chron has gone from 6 pages to 12 over the last 5 years or so. I have rented acouple of times over the last 10 years, does not seem to me that the rent I paid in 1996 of £525 has gone up to the £650 I pay now, the increase lags way behind the capital value of houses over the same period.

if house prices fall to 2001 levels, then this means that thay have not risen since 1988 in real money terms. Chas

I have noticed a large no of student let properties are on rightmove for Bath, quite an increase since i last looked. Charles

Which agency.....................Not ' there are Bath prices and Pritchard's prices!

they are coming........350 down to 250 is a fairly hefty drop.

In a rising market there is no incentive for people to adjust their housing 'needs' to reflect changed circumstances such as kids leaving home etc etc, because even though this house is 'too big for us and costs a fortune to heat' it is going up £50k a year. In a falling market people will make much more economical use of housing, with the result that supply and demand will be more closely matched.

William, I think that prices took until 1999 to regain their value from the 88 peak. this is in real terms, as there was quite a bit of inflation to take account of.

If you buy with cash you need to make a realistic rate of return, to properly compare your ROR with other investments. I suggest you should compare returns gross of tax with gross of tax. Looking at gross figures you can currently get around 6.5% from Northern rock on a 1 year fixed rate. Your capital is guaranteed by the govt (for the moment.) In my view a realistic net of costs gross of tax return from your BTL should reflect the extra risk of your investement plus a reward for the work you are putting in. You should also reflect the fact that getting your money out of property takes time and costs........................... I think that one way of looking at a BTL investment is to look at rental values and running costs first. then even if you are buying cash look at the position of a buyer who has a 25% deposit, and don't pay more for the property than this 'buyer' could pay on a mortgage. Where I live there are quite a few BTL on the market at asking prices that reflect yields under 5%. Very silly. Chas

UK 1988-2000 to regain 88 prices Holland late 70s boom took 10 years to regain boom prices Japan 80s Boom took 10 or more years to regain boom prices

At a yield of 5% i think that you will find that a property is unmortgaable unless you have a very substantial deposit. Unlikely to be easily saleable either. You need to build in void periods, redecoration every 4-5 years, new white goods etc etc. Take a realistic view on interest rates and make sure that you research your rental values very carefully, there is nothing to stop someone who is selling an investment property to arrange for it to be let on unrealisticly high rents. Areas of any town that are characterised by BTL or Student lettings WILL suffer declines in capital values relative to areas chacterised by owner occupiers as landlords as a group will fail to maintain properties properly. Just take a hard look at your own town.

I don't think there is a 'terrible housing' shortage. In a sharply rising market people will tend to 'hoard housing' and have no reason to downsize to meet changes in circumstances. In a static or falling market people will be much more careful how much housing they use. The real shortage of housing was for houses for real people on normal incomes to buy, especially as BTLs on interest only mortgages could always afford to outbid real people. There is nothing to stop supply and demand reaching parity at a much lower price point. How about £125K for a normal house after the price has reached a bottom of around £90K. Chas

New houses tend to depreciate a bit as many of the people who buy a new house don't won't to buy a 'second hand' house

Bomber, I was referring to this one : http://www.rightmove.co.uk/viewdetails-183...=5&tr_t=buy And the price is an auction guide price. Chas