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House Price Crash Forum


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Everything posted by dgul

  1. Oh - and note that the minimum interest rate period is for 5 years If you look at BTL mortgages they're all 2 year float or fix, seldom longer. So that 2.5% discounted rate only holds for 2/5th of the assessment - for the remainder it'll be at 4.5% (say). So the 5.5% minimum might be exceeded by the +2% part for most BTL mortgages up to over 6% (for current interest rates)
  2. A couple of other interesting parts: Removal of SME support for BTL mortgages. The SME support reduces the capital requirements for loans to small businesses - this will impact on the availability of loans if you've just incorporated... Introduction of new risk controls for lenders if the BTL has more than 4 properties - This is quite a big deal - some lenders will now just say 'up to 4 properties', pushing the large portfolios into specialist lenders ( probably = more expensive) Introduction of new risk controls for all BTL - again, most likely just to remove the cheaper deals from the market. The lenders will also want to recoup the additional costs incurred, which results in larger % rates anyway.
  3. I could easily accept that high-LTV BTL has an equivalent risk to greenfield. For a greenfield, you have fairly decent returns baked-in over a shortish timescale, but with staggered development to limit risk. Professionals are present at all stages, and there is background evidence of experience with previous developments. In the event of a downturn the developers can mothball to limit exposure and hopefully ride it out. As a commercial investment it is fairly straight-forwards. Amateur BTL, however, is a minefield. You lend money to people who don't know what they're doing, based on a financial fad ('it's me pension') and where the 'investment' (debt) is long term, often without any actual mechanism to pay it down. For one or two properties the risk is minimal (ie, they can support the payments out of cash-flow if there are a few dry months, or if there is a need for extraordinary payments (eg, repair)) - but once you get above a threshold (I'd say about 6 properties) there becomes no mechanism to cope with a sequence of bad events. There might be evidence of low problems in BTL, but this is against a background of previously unheard of government support and largess, a situation which isn't normal and isn't likely to be able to continue much longer. I'd say that BTL and developers are probably evenly matched risk-wise.
  4. I think that is a bit sad. One of the best bits about being a student should be the shared living - either in the college dorms or sharing a house. Perhaps the plan is to get the next generation completely used to living in a tiny, cramped, self-contained living space.
  5. I think the fuss is because of all the attempts to seal the draughts, they've got high humidity in the house. This is then causing damp. The damp is definitely bad. They need to sort out their ventilation. Other than that, the house is a bit cold. Might be on average as cold as houses were in the 70s. It'll be summer soon.
  6. Bridge to let is used when you buy at auction, or if there is some (structural) work to be done on the house, or if you've bought a commercial to convert into residential. For all these you can't get a conventional mortgage until you've sorted everything out. The idea of someone on £50k buying a property for a million on a bridge - when they don't even want to actually live in it - is completely bonkers. The interest on the loan is going to be at least £4k per month. At £50k that is more than their take home pay. It is probably auction, in which case they should have the finance ready in a month or so, so perhaps the real-world cost of this bridge is about £8k in interest plus maybe £10-15k in fees. So maybe £20k. I'd accept this sort of cost/risk for a residential / dream house. But for BTL - why not buy 4 x normal properties.? I think that is what they're trying to engineer. Possibly a lot of the action in sterling, as well...
  7. They're all mad. They seem to be walking into a complex legal structure with no understanding of what is going on. Their aim seems to be to 'keep the name similar and you can keep it under the radar'. They don't seem to understand that as a ltd company they don't really have any protection at all from their reckless ignorance of the terms of their mortgage. Their lenders could bankrupt them tomorrow - but they'll probably just change the interest rate to reflect their increased risks.
  8. Surely the army is selling off something you could use?
  9. As far as I can see the only way out is to crash the currency. I'm not sure about which different vested interests would be in support - old money vs banks, etc.
  10. We're seeing the opening moves in a complex game. So far we've had Boris going for into the leave camp, IDS going and Crabb being defused by bringing him into the cabinet. Some sort of leadership challenge this summer/autumn is pretty much baked in.
  11. Doesn't it look like their aggressive tactics has resulted in quite a large proportion of their 'standard residential mortgage' holders jumping ship, while relatively few BTL and self-cert have moved? Does this suggest that even with the encouragement of UKAR to get them off their books, there isn't anywhere else to go...?
  12. I don't understand the report at all - in my experience it is the minority of people are correctly qualified for their job - mainly in vocational jobs and in high training requirement jobs like engineering. Most people seem to have degrees in weird subjects and then jobs in something completely unrelated - usually management or similar. I can only think that the report can only be thinking of something like 'level of qualification' - so if a 'project manager'(say) has a degree that is okay, even if it is in classics (say). The right level of qualification is Prince2 (or whatever is flavour today) and that degree in classics is a complete waste of investment, other than it was the arbitrary tick that meant they got to interview.
  13. Hmm... And yet quite a large proportion of your cohort are now obese.... It suggests to me that picking on the children doesn't necessarily make for a healthy nation. I kind of agree with you about activity levels for children, but as far as I can see it is the adults who are actually most likely to be overweight and obese. I used to think that it was all about activity levels but I'm now much more convinced by the diet argument.
  14. It is probably worth pointing out that this is a particularly good vehicle if you're currently a basic rate taxpayer and you think you're likely to be a higher rate taxpayer in retirement. I imagine that there'll be lots of junior solicitors, bankers, etc funding into one of these in their early years.
  15. indeed. Lots of devil in the detail.
  16. But there is also this: with further action to follow in future Finance Bills. This will include a new charge on loans paid through disguised remuneration schemes which have not been taxed and are still outstanding on 5 April 2019. So any outstanding loans will have a new charge. As they're designed to exist for years this could be big. Even a 1% charge will add up after a few years. Presumably the only way out of it will be be take the pay, and the tax hit, and then pay off the loan - leaving you paying all the tax and all the scheme costs (the organisers help themselves to quite a big %). But, of course, you can't pay off the loan before taking the pay (minus the tax), but you can't pay yourself before paying off the loan... Wonder how many people this will bankrupt?
  17. I did see that the 'disguised income' schemes, where you take your salary as a loan which isn't taxed, are going to be pretty much destroyed. Historically this has mainly affected Jimmy Carr (and I suppose some others), but there has been a bit of chat about these schemes in OT recently... Also, those people who have taken income as loans are going to be screwed if they can't sort it out soon - a special tax just on such loans coming in 2019. [my understanding is that the loans hang around for a while - so this might be quite a bit of cash seeing as how many wealthy people have been using these schemes over the years]
  18. I don't think they play like this any more. It is a psychological game where they try to get from point a (being elected) to point b (being re-elected) and eventually on to point c (plush job after public office). There are strategic moves going on - for example, now is the time for pain - you can't do anything about it, and you just moan a bit. In 2018 and on will be the time for gain - lots of beautiful comments about how lovely everything is - because then will be within your memory span come the 2020 elections. You'll probably find that about 1/2 of the increase is given back in cuts by 2019. Most people can't remember the increases by that stage, and the give-away cuts are real. The proviso in all this is that he could well be out of office come the end of the year... Then we'll get a whole new set of rhetoric.
  19. Eventually they'll work out that they can get more money by letting it to tourists all year round. Then we'll be back to square one...
  20. Perhaps the intention is to introduce a savings cap to tax credits in about two years' time. If you've got more than, say, £1199 in savings at that point then you don't qualify.
  21. He doesn't care about such things. He's seen an opportunity where people are interested in taking both sides of the bet, and he's wangled the necessary publicity. He'll take his profits from the spread, not from the direction things turn in. Currencies etc are a nuance that he doesn't need to worry about.
  22. The bookmakers will want to have a balanced cover. The initial odds are there to get punters interested. Once their potential loss goes above some threshold the bookmakers will change the odds to get their potential loss under control. The bookmaker isn't really that interested in the actual odds of the event (beyond initial pricing) - they're mainly interested in ensuring that they get balanced betting on either side so that they can make their profit on the spread no matter what the outcome. [this is why you can't look at bookmakers odds to indicate the actual odds of an event - if the punters are biased one way or another then the bookmakers must offer odds that reflect that bias - no matter what the bookmakers' (or anyone else's) analysis indicates what the odds of the event occurring are]
  23. Sounds simple - but that is hundreds of thousands of websites that need to be updated. Amazon, Ebay, etc would be fine, they've got the background IT. But hundreds of little shops around the country would have to put massive amounts of effort in to comply. It is bad enough when VAT rates change. And online is complicated - what about if something is collected... What if I reserve something online and pay when I get there? What about online booking & payment for conventional services? What about online payments full stop (electricity, say). You could put the tax on turnover though, and make it part of the annual accounts. No need to differentiate between online and high-street though. I've heard about proposals where you would be taxed on a % of turnover or a % of profit, whichever was the greater... Not seen anything come of it, though.
  24. Exactly. I think we'll see some further support for householders with mortgage as they remove the support for BTL. The aim would be to keep house prices level.
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