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House Price Crash Forum


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About samtheman

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  1. The final 18 months of your period of ownership always qualify for relief, regardless of how you use the property in that time, as long as the dwelling house has been your only or main residence at some point.
  2. I purchased a property as an FTB a little over a year ago, which for a long list of family circumstances, I eventually had to rent out (there's a BTL mortgage on the flat) This is the only property I own and I currently rent the flat where I now live. Because of these same circumstances, my partner and I are considering selling the flat in the next few years when we leave the country. I'm aware of the 18-month rule regarding private residence relief. We're considering moving into the flat that I own (while switching the mortgage to residential) for a certain period, and we have no set date for us leaving the country just yet. However, bearing in mind that we would be moving into the flat approx. 2 years after having purchased it, is there a minimum time we would need to live there before we can apply Private residence relief or Letting relief when it comes to selling? If, hypothetically when selling, the price had increased by 80k and we had lived there for, say only 6 months over a 5 year period with the last 18 months of renting out, would we still benefit from Private residence relief/Letting relief? It sounds fairly surprising that a short period of living in the flat would introduce large tax relief, but in any case, this would be a genuine home for us (i.e. no actual "flipping" of main residence as this is the only property I own) i.e. Private residence relief for the last 18 months + 6 months of living there so (2/5) * 80k -> 32k Letting relief for the period it was rented out -> 32k (since I wouldn't be able to receive more letting relief than private residence relief) So I would be liable to pay tax on the remaining 1/5 i.e. 16k Is there anything I'm missing here? I'm personally not too worried about seeing prices drop as this would make our life simpler as we wouldn't have to pay Capital Gains Tax, so I'm certainly not speculating here on the actual increase I expect (80k is entirely hypothetical).
  3. It depends what you define as a grunt. I'm seeing more and more highly qualified, senior, IT roles ending up in other European locations, roles that could probably command a six-figure salary in London in some cases. Certain development and support teams have several levels of management in locations like Lithuania or Czech republic. Some London employees now report to the managers inside those structures.
  4. That aspect of "End User Computing", which itself is only a small section of Information Technology in Financial services, would present a very tiny number of IT Professionals. Even people in the industry are sometimes surprised/confused when they hear that "trading systems" are now designed and implemented by "Technologists". Goldman Sachs has a 1/3 of its workforce in "IT". Of course those tens of thousands of employees are not repairing someone's PC>
  5. All banks are focused on compensation costs. It's a well-known fact that most large companies including banks have attempted to move low-skilled IT jobs (which has then happened to more qualified ones) to places like India for several decades but the move to other European locations outside London, as they call "near-sourcing", has existed since I started working in the field. Even large investment banks like JPMorgan or Citigroup have had technology centres in places like Poole, Belfast and Glasgow for years, obviously to save costs. The trend is happening in New York as well with a lot of technology roles moving to places with sufficient IT expertise: South Carolina, Texas, Utah... However, in the last 5 years, the trend has definitely changed with a number of IT Infrastructure and Operations jobs moving to European countries with 1) cheap labour, 2) highly qualified IT workers 3) with fairly good English skills Places like Poland and Lithuania (and a lot of Eastern Europe) create skilled technology graduates, often with an incredibly good level of English so the opportunity to recruit these young technologists is easy to spot. When a lot of tabloid media attempts to paint a picture of backward Eastern Europeans, based on a subset of expats from those countries who move to the UK, these are countries which are taking advantage of their human capital: they're certainly not countries with second-rate education. In this area, the UK has 2 very weak points which makes the future of IT jobs very worrying: 1) the UK does not produce enough quality IT graduates, with a lack of appeal of Information Technology among young people 2) English being the national language Unfortunately there are plenty of countries who have a large population of young workers who have sufficient proficiency in English to work in a number of jobs.
  6. Not even sure "in the West" is correct either. My partner is from another EU country where she was brought up in her grandma's flat that her parents later extended. She has pointed out to me that it's the norm there. It's seen in a lot of Southern European countries too. There are definitely British attitudes to property that the middle-class deem as the norm, as universal, that are maybe even confirmed in Hollywood films (the only source of non-British information for their limited culture), that are certainly not normal.
  7. That's exactly the point. I have seen the income of my tenants and was particularly concerned that they were spending well over half their income on rent. If these are the kind of people who live and want to live in the area that I have purchased my flat in, then I have to accept that rent. I can't simply sit there saying "no, you guys have got it all wrong. You're supposed to be paying well over £200 more a month". Who am I speaking to? The imaginary yuppies who have just moved into my area? No sign of them yet...
  8. That's not how a market functions. Landlords may have more disposable income in order to purchase their property asset in the first place but there is no promise for the rental market to provide a certain yield. That's where a lot of the speculation is going wrong: in the building where I purchased my flat, all flats were marketed in Singapore and Hong Kong first with guaranteed rental yields and the usual projections of capital appreciation. The idea that you can "guarantee" a rental yield completely skews the overseas investor's view of the market who sees no risk in their purchase. If the money for rent is not there a few years later, then there is no way that you can demand a certain rent simply based on the price at which you bought your property or any previous rent amounts you used to charge. If the people in the area can only reasonably afford £1000 a month for your property and you expect £1200/month to get your return on investment, you can "demand" that rent as much as you like, noone is going to bite. Once in that situation, landlords have to reduce the rent they ask if they don't want to keep their flat empty (which some are happy to do as long as they think the value is still skyrocketing). Landlords still have to compete with eachother regardless of shortage of flats. You can't squeeze blood out of a stone if the people in that area can't afford the rent unless you really are dreaming of a swarm of rich kids moving into your area some time soon. I've seen this first hand in the country where my partner is from: a huge number of British investors purchased property before the financial crisis. Once all their tenants lost their jobs, were on lower income, the investors were all flocking to her country to see how they could negotiate some reasonable rent decrease. There might have been plenty of demand for their centrally-located properties but that demand was at a certain value, that value determined by the affordability of renters.
  9. I've tended to rely on this website (especially when dealing with landlords/lettings agencies who used to try and pull a fast one and pretend that my rent had to go up because the "market was booming"): http://www.londonpropertywatch.co.uk/s/ph?pc=LON&t=1-3b This is purely anecdotal but I've just signed a renewed 12-month tenancy for my flat in Central London with no increase being suggested (then again I think my landlord is one of few who isn't a completely greedy and deluded idiot). I also own a 2-bed flat in Zone 2, that due to circumstances I can't move into yet, and spent 1.5 months looking for tenants (then again the lettings agency did a pretty bad job of marketing the flat) who pay a few percent less than the previous tenants did before I bought the flat.
  10. Like many Britons before me, I'm considering moving abroad in the next few years. In my case, to Poland where my girlfriend is from. One thing that is holding me back for now is salary. The usual "but it's a lot cheaper to live there" statement is made whenever I speak about this to friends/family. This comment always ignores the fact that cost of living can be as cheap as you like but if your salary is reduced by more than your cost of living is, then your purchasing power will be negatively impacted. I'm looking mainly for advice from individuals who have actually made the move. I am looking to continue to work there. I speak ok colloquial Polish. In any case, my salary would likely take a massive hit (basically reduced by about 3/4, maybe 2/3 if I'm particularly lucky). In terms of financial considerations, what should I take into account? What kind of savings should I have to be financially comfortable? I am fortunate enough to own a flat in the UK. Do I sell it? I was assuming that the fact that I have a flat in the UK would provide a fair bit of financial security if we needed to come back to the UK.
  11. hackney, I think you're spot on with this description "the vendor believes he can get it, but realistically I as an agent know it's a bit toppy, so please put an offer in anyway...." whether that's to refer to guide prices or OIRO. It does indicate to me a sign of desperation. I wasted quite a bit of time with an EA when attempting to put an offer for a flat a few months back. He kept maintaining that offers had to be in the range put on the advert and was told that no offers would be considered outside that range. A few days later, the so-called "range" had been replaced with a significantly reduced "guide price". I put a particularly "generous" offer very close to the guide price (but below) but kept being told that it was too low. I lost patience with the EA and the owner as I knew they were just trying their luck. Considering the price that the flat had gone for 2 years before, this was genuinely taking the **** (500k against 310k in a not-so-nice part of Tower Hamlets). This I knew as a flat was going in the same building (but on the floor below). I simply went for the other flat as soon as it came on the market.
  12. To be specific, it is tenanted but the seller has just served notice. I can't keep the current tenants. I won't live there any time soon as my job is currently abroad and this job offer is nowhere near this flat. No plans to live there for a number of years. My only question is simply how the lender will view the change of job. As I've exchanged, I have no desire to put the mortgage offer at risk. As the main criterion for BTL mortgages is the rental income, would they even care?
  13. Hi, I've recently exchanged contracts on a property. The property is on a BTL basis and I may need to extend the offer by a few weeks as the completion date has been set to just over 2 months time. I've recently been made an offer for a job that I am considering but am particularly scared as I know that any change of circumstances needs to be communicated to the lender. Do BTL lenders care about whether I change job. I understand that for a residential mortgage this would probably be a huge deal but is that the same for a BTL mortgage? Is the fact that I am asking to extend the offer going to result in additional background checks? By the way, I am not a BTL investor. This is my first property but as I need to work abroad for a couple of years and the property was tenanted, I accepted on this basis for the time being.
  14. I'm looking to purchase a flat which is currently tenanted. Despite being an FTB, due to my personal circumstances and the fact that I have a rental agreement that I have only just started, I'm considering a BTL mortgage for now. I have a sufficient deposit to cover 25-35% of the purchase but even then, rental yields do not look that great and so am not sure I will meet the 125% of mortgage payments rule that most lenders impose for rental income. How many lenders offer BTL mortgages based on the salary of the applicant? Do these lenders consider buyers who do not own any property?
  15. Stratford has decent public transport links but other than that, it has little going for it. I don't see much happening in the future. One of the first places that should start to see a crash.
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