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A few more billion have been found under the sofa to prop up the property market. Pensioners are to be given freedom to use their pension pot for investments other than buying an annuity. What do you think that people who are risk averse and are thinking of leaving something behind for the grandkids will invest in? My deduction is: flats and houses. Bad news for HPC.

http://www.telegraph.co.uk/finance/personalfinance/8190697/Retirees-given-greater-say-over-pension-pot.html

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A few more billion have been found under the sofa to prop up the property market. Pensioners are to be given freedom to use their pension pot for investments other than buying an annuity. What do you think that people who are risk averse and are thinking of leaving something behind for the grandkids will invest in? My deduction is: flats and houses. Bad news for HPC.

http://www.telegraph.co.uk/finance/personalfinance/8190697/Retirees-given-greater-say-over-pension-pot.html

I don't think so.

ISTR that the average size of a pension pot is (a tiny!) 45K (I assume that's the median), you don't buy many houses for that.

And given that most of these people wont have the alternative income to allow them to cash it in, the effect of this change, on the economy, is going to be minimal.

tim

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... What do you think that people who are risk averse and are thinking of leaving something behind for the grandkids will invest in? My deduction is: flats and houses. Bad news for HPC.

http://www.telegraph.co.uk/finance/personalfinance/8190697/Retirees-given-greater-say-over-pension-pot.html

I can't imagine why they would think that. I've come into a wodge, and I'm not investing in property or UK cash. I intend to have a portfolio weighted on foreign investments and currency. UK stirling is being abandoned by the powers that be, and property can only be propped up in nominal terms.

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I can't imagine why they would think that. I've come into a wodge, and I'm not investing in property or UK cash. I intend to have a portfolio weighted on foreign investments and currency. UK stirling is being abandoned by the powers that be, and property can only be propped up in nominal terms.

But are you over 65? People of that age and up are unlikely to speculate on currencies.

I'm not saying that price declines are over, but that we need at least to consider the counter-arguments. I see that RB has been active in that department.

edit: split infinitive

Edited by newbie

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Is that the sound of straws being grasped and bottoms of barrels being scraped I hear?

Correct.

We all knew this would happen.

As soon as prices drop a little bit everyone with any money would be talked into diving into the market and "snapping up a bargain".

We ran out of first time buyers years ago.

Now the BOMAD is struggling to find funding they are raiding the pension pots.

Pity most of the pots are empty.

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A few points:

1 What pension pots?

2 Do you really think those with enough pension money are going to speculate on property?

3 Those with money to spare won't be spending it on property in the UK. Would you?

4 Unwise investment to buy here, because as a pensioner you are subject to every rat faced scam artist trying to 'manage' your investment.

Atypical article for some silly legislation, aimed at conveyors of property.

Lots of feathers, not much chicken.

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But are you over 65? People of that age and up are unlikely to speculate on currencies.

I'm not saying that price declines are over, but that we need at least to consider the counter-arguments. I see that RB has been active in that department.

edit: split infinitive

I'm just turning 63. I'm not exactly speculating. I'm investmenting in a standard fund through a bank where I can choose the types of investment. Part stocks and shares ISA (to my ISA limit), part just stocks and shares investment. I will request foreign investments primarily, not UK, not Europe (except Germany perhaps), not USA.

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House prices boomed because millions of people got into crippling debt to buy them. Whether a few pensioners buy the odd BTL is neither here nor there.

Edited by scottbeard

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Complete hogwash. Personal Pensions can't invest in residential property, and no change to that is being proposed. These changes will have zero impact on the property market.

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And don't think just because the rules are being eased now "to make pensions more attractive" that when people with a few years still to go come to retire they won't start to consider removing and reversing the eased rules or come up with some other pension swindle - once you've been captured.

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Apparently you can't withdraw any more per year than you would have with a normal annuity but you can withdraw less even zero.

It sounds more like a type of SIPP and or drawdown but maybe without the investment opportunities and without the need to transfer.

Edited by billybong

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The general sentiment is correct, anyone who comes into money from my experience starts thinking of how many houses they will buy and expand on. At least in the UK in some other countries it is not uncommon to buy gold as an investment (but that is largely due to historic high inflation making cash saving a non option and there is/was no mortgage availability to allow property investment)

Its as if there is no other investment vehicle and to an extent they are correct.

For mr and mrs average the only choice is cash savings in a bank which grow at 0 to 5% pa and less so in real terms or to invest in a house yielding 5% with the prospects and mostly the expectation/hope of 10% pa HPI and certainly a +ive growth over a longer period of time.

If anything I would advise those on here and elsewhere to add value when they try to invest their money. For example I would suggest if you are able to do so, building a new house to let is much better than buying an existing house to let. You create jobs and housing which will stand for a hundred years or more and be a real net benefit to the country. Buying an existing house doesn’t add any value. Or even extend your current home or a BTL you may have. You will have the benefit of a bigger house/ higher rental income and again are adding real value and jobs in the process.

The only other saving I can think of which is just about doable for mr average is invest in a business but that is much more high risk for not much more reward.

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But are you over 65? People of that age and up are unlikely to speculate on currencies.

I'm not saying that price declines are over, but that we need at least to consider the counter-arguments. I see that RB has been active in that department.

eh?

oldies won't put their cash into crashing property, they will be much more conservative, they live in fear of old age, like we all do

Edited by Si1

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Time for a return of this?

Let the neverending cycle begin (again)!

A 102-year-old has been granted a 25-year, £200,000 mortgage. It will run until he is 127.

The pensioner, from East Sussex, is believed to be the oldest person in the UK to be granted a mortgage. The revelation was greeted with alarm by debt advisors.

He faces repayments of £958 a month on the interest-only loan and intends to pay them from rental income and make money from the property's increase in value over time.

Hmmm, from March 2007, I wonder how that worked out for him.

(Possibly quite well since he can pocket the rent and won't be around when the mortgage expires.)

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The general sentiment is correct, anyone who comes into money from my experience starts thinking of how many houses they will buy and expand on. At least in the UK in some other countries it is not uncommon to buy gold as an investment (but that is largely due to historic high inflation making cash saving a non option and there is/was no mortgage availability to allow property investment)

Its as if there is no other investment vehicle and to an extent they are correct.

For mr and mrs average the only choice is cash savings in a bank which grow at 0 to 5% pa and less so in real terms or to invest in a house yielding 5% with the prospects and mostly the expectation/hope of 10% pa HPI and certainly a +ive growth over a longer period of time.

If anything I would advise those on here and elsewhere to add value when they try to invest their money. For example I would suggest if you are able to do so, building a new house to let is much better than buying an existing house to let. You create jobs and housing which will stand for a hundred years or more and be a real net benefit to the country. Buying an existing house doesn't add any value. Or even extend your current home or a BTL you may have. You will have the benefit of a bigger house/ higher rental income and again are adding real value and jobs in the process.

The only other saving I can think of which is just about doable for mr average is invest in a business but that is much more high risk for not much more reward.

sorry, how much are houses?...140K plus... and how much is a normal pension pot...oh yeah...NIL.

most people, only end up with money theyve been lent or given.

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sorry, how much are houses?...140K plus... and how much is a normal pension pot...oh yeah...NIL.

most people, only end up with money theyve been lent or given.

Most people I know make some money over and above what they need to live.

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A few more billion have been found under the sofa to prop up the property market. Pensioners are to be given freedom to use their pension pot for investments other than buying an annuity. What do you think that people who are risk averse and are thinking of leaving something behind for the grandkids will invest in? My deduction is: flats and houses. Bad news for HPC.

http://www.telegraph.co.uk/finance/personalfinance/8190697/Retirees-given-greater-say-over-pension-pot.html

So how about putting some numbers to your paranoia?

Torygraph reports they'll need a secured income of £15k. That means a £375k chunk of the pension pot to spend on the secured income, so it's only money above that that's available to spend on anything-else.

Existing old rules allow you a 25% tax-free lump sum, which brings the already-accounted-for pot up to £500k. So it's only the excess over half a million that this releases. And that's taxed when it's accessed.

If you have a pension pot of 500k + enough to buy a house after 40% tax then I expect you've led a life of financial awareness. And more to the point, you've had enough money to buy a BTL empire over the years, but you've got a pension pot instead. Why start now?

[edit to add] Torygraph says £15k. Other sources say £20k, which would make it only the excess over two-thirds of a million in a pension pot that's newly available to squander.

Edited by porca misèria

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Actually this is much better news than we're admitting.

It makes pension saving much more attractive. That's more money going into the productive economy. And all the money going into pension funds is NOT going into the spivs BTL portfolios.

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I don't see a hope in hell of pension money propping up uk housing, and the reason for that is that its a cr@p investment long term and short term.

If you look at the average net return on residential property in the uk , after all management costs / voids / repairs / maintenance / fees and all those other things the amateur landlord likes to exclude from his calculations and excluding HMO's as they require almost full time management, the net return is about 3% , In London its probably lower , so if there was a REIT in the uk that contained just residential property it would probably yield about 1.5% after all the fees the manager would want to charge, it probably would not be able to get finance at a cost it could break even on so no leverage either, for this reason there are ZERO residential reits in the UK which has one of the most diverse investment options in the world, nobody thinks its worth launching one,

However look at New Zealand , a country with a much healthier long term, they are just beginning to produce oil and gas, they produce a huge surplus of food and almost all the leccy is from Hydro, almost no government debt too , long term everything going for them and the riets yield 10% cash tax free in your pocket with little or no leverage, If I was a pensioner that is where my money would be, not thinking about uk residential property where the return does not even justify launching a single reit !

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Complete hogwash. Personal Pensions can't invest in residential property, and no change to that is being proposed. These changes will have zero impact on the property market.

Why on earth didn't the thread end here? VofR is spot on ... the end!

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Complete hogwash. Personal Pensions can't invest in residential property, and no change to that is being proposed. These changes will have zero impact on the property market.

It's not suggesting that funds within a pension wrapper will be able to be invested in residential property, it's saying that people will be able draw a greater proportion of cash from out of their pension funds and invest the cash in whatever the hell they like, ( which may well include residential property.)

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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