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House Price Crash Forum


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Everything posted by pmf170170

  1. From the link. From the start of April, new EEA jobseekers will no longer be able to access Housing Benefit if they are claiming income-based Jobseeker’s Allowance (JSA). So a self employed Big Issue seller can still claim Housing Benefit? Even if they can't, an immigrant on minimum wage in London (or anywhere for that matter) can still claim it.
  2. I've a mate who has a number of properties on the Wirral. I mentioned S24 to him with the suggestion that he should look to sell. At the time he hadn't heard of it but having since spoken to his accountant, it doesn't affect him because rent is his only income and it's less than the HR Tax threshold (turnover and not profit). He did however mention the tenant demand was huge and supported what is being claimed by landlords. You can test this in your own area by finding a property on Open Rent that looks decent at a sensible (not cheap) rent. He showed me his dashboard and the amount of interest and that was from the Open Rent portal only. The property in question hadn't hit Rightmove. People were offering to take the property sight unseen based on the photos and offering above the advertised rent. Good properties are effectively rented the day that they are advertised and landlord selling is typically the cited reason for the move. Try it to yourselves to see if you can even get a viewing. Most people can't - which is depressing. Personally I'm glad that I capitulated back in 2008 and bought back in even if my home has not even increased in value to match inflation. I'm now 10 years in to paying off the mortgage. I was convinced that the market would crash and STR in 2017 but saw a bargain at auction that I couldn't resist. If you do create an Open Rent account you can engage with the landlords and bait them for a bit of sport!
  3. You can pick up loads of houses in the north for less than construction costs if you are genuinely interested. In Liverpool the local authority were selling them for a pound recently. Loads of £20k houses on this link. The stone used to build them would cost a high proportion of the build cost. http://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION^252&maxPrice=50000&sortType=1&includeSSTC=false
  4. It's the taxation on turnover rather than profit without the ability to offset interest costs before calculating the tax due. It impacts higher rate tax payers and will bankrupt highly leveraged portfolio landlords - which could result in forced sales and falling prices. All BTL landlords get a 20 % tax credit, hence basic rate tax payers will be unaffected. Ireland tried it but it pushed rents up massively as landlords passed on their increased costs and was withdrawn after 5 yearss. Rents in the UK are thought to be at the maximum that tenants can sustain, hence the hope is that landlords won't be able to pass on their additional tax to tenants. It's going to be an interesting roller coaster ride. We live in interesting times and this could precipitate the housing crash that the SE needs. Not sure how the banks will fare.
  5. https://www.huf-haus.com/uk/gallery/ These look great until you realise that they cost significantly more than a traditionally constructed property (2015 indicative prices). They are probably still decent value but by no means a solution to the affordable homes problem. Huf Haus can design a house as small as 1,000sq ft or as big as 10,000sq ft. The company says the typical cost is £200 a square foot, which includes the super-structure, on-site assembly and interior finishes. A 2,500sq ft house would cost in the region of £500,000, excluding the price of land. A traditional property would cost in the region of £140 sq ft (2017 prices). As ever, the cost of the land also needs to be factored in.
  6. The alternative way that this can play out is that the debt is defaulted on. I can't recall the figures for the UK but the BoE owns a huge tranch of the the UK public debt; which it lent by the magic (sleight of hand) that is QE. At some point it may become expedient for this debt to be cancelled rather than paid back (which in fractional reserve banking destroys money) and at a stroke our debt to GDP ratio would look prudent again. As the money doesn't really exist and never did, (it's a number on a ledger that is the UK balance sheet) there are no losers apart from the prudent or those who positioned themselves for how this should have panned out in a free market who have already taken the medicine. The markets can then be pump primed by further QE. Traditionally we would have expected the pound to be trashed by such a move but would it in these untested and unconventional times? If the government is free of debt it can 'borrow to invest', which as we all know is considered prudent and good for the economy.
  7. Just picking up on this thread @awkwardturtle You may not want to hear this but based upon your description of your flat, I suspect that in the coming few years it's value may be badly affected from the fall out of the S24 tax changes affecting leveraged higher tax rate landlords. Unless a property is genuinely desirable, I suspect that there will be a lot of downward pressure on the typical buy to let properties (1 and 2 bedroom flats / terraces) and if you look at Rightmove, it is already starting to happen in the NW (as well as London which gets the headlines). I look at the disproportionate growth in the bottom end of the market over the last 20 years of so. As a multiple of their baseline value (say 1998), these properties have increased far more than more desirable family homes. In the NW the former (although not necessarily flats) may have quadrupled whereas the bigger homes may have 'only' have doubled (if that). I hesitate to give advice because the markets have proven that they could stay irrational for longer than many on here could ever have imagined (aided and abetted by HMG and BoE), but I do think that you are best served by selling as soon as you can for whatever you can get unless the clearing price is so derisory that the rental yield makes sense for you to become a reluctant landlord. You would have to suck up the increased stamp duty on your new house.
  8. Physical assets that inflate along with the fiat money. Precious metals and dare I say it, property have both stood the test of time. Shares in utilities should also be a decent hedge but stocks generally will probably inflate although businesses / services that depend on discretionary / non essential spend could be wiped out. After the 1st world war those on fixed incomes in Germany (pensioners) were wiped out by the inflation. At least the wages kept pace with inflation (sort of although the hardship was appalling - giving rise to WW II). Even a '70's style UK inflation would wipe out many pensioners and ironically it will be those with defined benefit pensions (e.g final salary) that are worst effected as they are generally only protected against inflation up to 5% per annum and many only up to 2.5%. UK inflation peaked at circa 25% per annum and it doesn't take many years of anything even approaching that for the value of money to be wiped out. I think that I am right in saying that with inflation of 7% money will half in value in 10 years. I know that is the rate of growth with inflation at 7% so presume it also works the other way. https://www.economicshelp.org/blog/2647/economics/history-of-inflation-in-uk/ The problem with 'owning' property at a time of huge inflation is that the medicine (aka interest rates) can kill the patient as people cannot afford the increased repayments as rates increase to bring inflation under control. Those who own outright are sitting pretty - at least that's my take on the way it will play out.
  9. It's all a bit tongue in cheek. Better areas tend to appreciate in value and have demand when you want to sell, especially if it's a family home by a school with an outstanding reputation. Less affluent areas can stagnant or decline or become buy to let areas.
  10. You're clearly new to this. The rule of thumb is that if you are not embarrassed by your offer, you have offered too much! Don't be afraid of offending. People can only say no and there's nothing to stop you coming back with an increased offer. The response to a low ball offer helps you understand the vendor's position. Another rule is to buy in the best area that you can afford. Don't compromise on location.
  11. You would need to sell the flat to a limited company created for the purpose of owning property (a special purpose vehicle (SPV)) before buying the new place. The SPV would pay the 3% premium.
  12. Is there no covenant in the lease that prevents pets occupying the property. Dogs and flats don't appear to be natural bedfellows!
  13. In your position and considering what you are proposing, it may be a viable option to sell the flat to a limited company that you create. Within reason you can sell it for what ever you want , i.e. purchase price plus any capital growth in the area. This sets a high floor for any future tax due on sale. As a private person you no longer own property and can buy as a first time buyer avoiding the 3% stamp duty. I don't know for certain that this is viable but can't see any reason why not as the limited company is a legal entity in it's own right.
  14. You don't need to emigrate. Just move out of the SE. The quality of life further north is far better although the weather isn't as good.
  15. When I took my current job in 2001, the company that I was previously working for had just closed their DB scheme. The new employer's scheme was 1/60th of final salary with zero contribution (inflation protection of up to 5% per annum). Probably about 2010 it went to 1/60ths of career average with a 3% contribution (or 1/80th for no contribution) with maybe 2.5% inflation protection. A couple of years later it was 1/80th for 7% contribution (ramped up over a number of years). The scheme is closing completely at the end of the year although the company will pay up to 12% of salary into a DC scheme (minimum employee contribution to achieve this is 3%). For someone continuing to pay 7% in, that equates to 19% of salary which whilst still not as good as the DB (based upon current gilts yields), it's not bad and it will actually give a better protection against inflation so it could be seen as a beneficial hedge. The pay cut that I have had since joining my current company is however significant. The glory days of pensions are behind us and I really feel for the youth of today starting with student debts, ridiculous house prices and poor pensions on offer. They are on a treadmill that is going to bleed them dry.
  16. The share price graph was from feb 16. It's down circa a further 30% since then
  17. This is probably evidence that house prices are driven by available credit.
  18. It's a SE thing. There is no need to emigrate. Just move to a more affordable part of the country where prices have only increased slightly.
  19. House prices are relatively expensive all over the country but outside of the SE and a few other notable hot spots, I believe that they are probably affordable to most people, at least whilst interest rates are low and compared to the cost of renting. With very low ten year fixes available, significant hedging opportunities exist for those concerned about future interest rate hikes. If you don't need to rent for mobility reasons, (bitter) experience has shown all on HPC that buying has made sense for pretty much the entire time that this website has been in existence. I can only state this with the benefit of hindsight. and the past is obviously no guide to the future. I STR in 2007 at the peak of the last boom but bought back in in 2008 at 2002 prices and I'm glad I did the way that things have gone since.
  20. It's George Osbourne's idea of joined up thinking.
  21. In these modern times (QE, ZIRP, HTB etc.) you will need to be careful about referencing the old text books because there has been a paradigm shift with much of the old school thinking being turned on it's head.
  22. If my experiences are anything to go by, it won't be cuts; simply a targeted increase in stealth tax taking money out of the economy to make it feel like cuts.
  23. I agree. Teachers don't work nights - they tend to sleep then. My wife is an NQT. She starts at 8AM. Leaves school at 6PM when they are locking up. She comes home and starts again until maybe 9 or 10PM. Weekends are spent working; at least one full day a week.The hourly rate is pathetic and teaching is not a job that can be recommended to anyone in this day and age. Personally I blame the unions who are ridiculously weak. Teachers should be out on strike and stay out until things change dramatically. You get all the idiots on sites like this (you know who you are) who have no idea what it it is like to be a teacher but suggest that it is a walk in the park. I earn circa 3 times what my wife does and work half the hours.
  24. Tell them it's too short notice and schedule it for May. Give them two months notice - you can't be fairer than that. They can have someone come in the day that you leave and when marketing the place let potential tenants know that the work will be undertaken before they move in.
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