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ILBB

Radio 4 (world At One) Sipps

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Report on BBC Radio 4 at the moment on property into SIPPs and it's effect on the market - Rural communities house prices set to boom according to an expert who says that there is massive interest from potential investors, Libral spokesman not happy at all and Tory spokesman (Oliver Leftwing) worried about rural prices. A treasury spokesman was not at all concerned.

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The BBC seems more and more a voice for the government then the people..

Quite how expensive properties are meant to be getting I don't know.

In most areas at current prices they currently loose money when rented out against a mortgage

and if you ahve the cash.. your investment is stronger in a high interest bank account then rental yields..

Whenver the crash happens.. we will look back..

and as some claim the crash to be unlikey..

after the case it will look like the most bloody obvious thing that ever happend..

House prices quadrupple... and as consumer debt that bought the things at vastly inflated prices cripples the economy.. A new pension idea is generated that will make the prices leap to the moon..

Will it..?

Well if it does...

actually I can't grasp...

its a few bricks .. how much do you thinks its worth..?

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Report on BBC Radio 4 at the moment on property into SIPPs and it's effect on the market - Rural communities house prices set to boom according to an expert who says that there is massive interest from potential investors, Libral spokesman not happy at all and Tory spokesman (Oliver Leftwing) worried about rural prices. A treasury spokesman was not at all concerned.

When people realise they need to have over 50% of the required funding in cash already in their fund and cannot leverage 90% of the borrowings the number of people will soon dry up, your average BTL'er couldn't even rustle up £10k unless it was the result of a MEW. I doubt people will be happy having a property held in trust with management fee's and then letting agents fees and the inability to actually sell the property until they retire, or want to pay back the tax relief.

Even if SIPP's are a sucess they will only precipitate a crash by freezing ever more FTB'ers out of the market, if you want a stagnant market the fewer the better. This is just HM Treasury's final attempt at rigging the market, it has got to the stage where they are throwing public money (or abdicating the receipt of that money) in a vain attempt to prop the market up, its only purpose is to prove how desperate Brown has become. In the face of tax revenue shortfalls, record deficits and borrowing he is prepeared to push ahead by putting his own political ambitions first.

Reminds me of the actions of the Treasury during the ERM crisis, they instructed the Bank of England to waste billions of public funds on buying Sterling above its true market. They couldn't buck the market then and Brown will find that out for a second time, at our expense.

Edited by BuyingBear

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House prices quadrupple... and as consumer debt that bought the things at vastly inflated prices cripples the economy.. A new pension idea is generated that will make the prices leap to the moon..

Will it..?

Well if it does...

actually I can't grasp...

its a few bricks .. how much do you thinks its worth..?

As the reporter pointed out most people don't understand, or trust, the stock (and presumably bond) market but feel comfortable with property. Therefore they are happier with putting more money into their pensions if it's in property.

I fail to see why Brown is doing this as the wealthy are certainly going to put more into their pensions and therefore pay less in taxes (some sources believe as much as £5 Billion less) . Those that will do it are not the ones who will have a problem in old age with underfunded pensions but those that are already substantially well off.

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I wrote to my MP about this (a Tory) who wrote back to say, in a surprisingly honest non-politician way, that he didn't have a clue about it. He passed my email on to Malcolm Rifkind rather than Oliver Letwin - I think MR is the Tory spokesman on pensions - who wrote me to say that the Tory party was very concerned about the housing situation in rural areas, wanted everyone to have the opportunity to own their own home, yadda yadaa yadda with absolutely no specifics about how this might be all be achieved. <_<

I think it's fair to say that the Tories would be interested in propping up (artificially) house prices as well, if they got elected before the bubble pops.

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As the reporter pointed out most people don't understand, or trust, the stock (and presumably bond) market but feel comfortable with property. Therefore they are happier with putting more money into their pensions if it's in property.

At least a company does something, like generate wealth and hopefully pay a dividend or issue buy backs. A house is dead money, it doesn't intrinsically contribute to the economy in any significant way, aside from people paying some money to keep it from falling apart. The MEW phenomenon has lead many people to believe they have intrinsic worth or wealth generating abilites above and beyond putting a roof over your head, in Holland the Dutch used to accept tulips as collateral for loans.

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I doubt people will be happy having a property held in trust with management fee's and then letting agents fees and the inability to actually sell the property until they retire, or want to pay back the tax relief.

Thanks BB. This has hit the mark IMO.

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Guest Guy_Montag
Report on BBC Radio 4 at the moment on property into SIPPs and it's effect on the market - Rural communities house prices set to boom according to an expert who says that there is massive interest from potential investors, Libral spokesman not happy at all and Tory spokesman (Oliver Leftwing) worried about rural prices. A treasury spokesman was not at all concerned.

My problem with this isn't that it will prevent locals buying rural properties; that is, in many places, already the case. My problem with is that it is so ******ing unfair. Effectively it is allowing those you are already rich the oppertunity to buy a second home at a knock down price.

I suspect the majority of those that go down this road are not going to rent them out, they are going to keep them as holiday homes.

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Report on BBC Radio 4 at the moment on property into SIPPs and it's effect on the market - Rural communities house prices set to boom according to an expert who says that there is massive interest from potential investors, Libral spokesman not happy at all and Tory spokesman (Oliver Leftwing) worried about rural prices. A treasury spokesman was not at all concerned.

To be fair I think the report was quite critical, but there was an awful lot that wasn't expanded on. What wasn't covered well, was that the people to whom this option is really open to, already have very large pension funds and so it just further feathers their nest. The government's pre-written response came across very weakly.

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Guest prudence
My problem with this isn't that it will prevent locals buying rural properties; that is, in many places, already the case. My problem with is that it is so ******ing unfair. Effectively it is allowing those you are already rich the oppertunity to buy a second home at a knock down price.

I suspect the majority of those that go down this road are not going to rent them out, they are going to keep them as holiday homes.

what in life is fair! Stop whingeing, do some calculations and work out for yourself whether there really is going to be a large flow of Sipps money into the market, certainly enough to impact on prices. IMO there won't be. You clearly think there will be? Is that because you actually know what you are talking about or because you have heard people on the radio say it will.............

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Guest Guy_Montag
what in life is fair! Stop whingeing, do some calculations and work out for yourself whether there really is going to be a large flow of Sipps money into the market, certainly enough to impact on prices. IMO there won't be. You clearly think there will be? Is that because you actually know what you are talking about or because you have heard people on the radio say it will.............

I don't think there will be a large flow of money into the housing market caused by sipps. I'm not sure where I said that. What I said is the people who take this up are not doing so for an investment. They are doing it as a cheap way to buy their second home, the second home that they would probably be rich enough to buy anyway.

I know that life is generally unfair, & I generally accept that, but what make me angry is when the govt. (for it is they who have the power to change things), change things to make life significantly less fair.

Edited by Guy_Montag

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what in life is fair! Stop whingeing, do some calculations and work out for yourself whether there really is going to be a large flow of Sipps money into the market, certainly enough to impact on prices. IMO there won't be. You clearly think there will be? Is that because you actually know what you are talking about or because you have heard people on the radio say it will.............

First - This isn't a one off - SIPP investors will be able to invest in property every year (and also use the tax free rents to put down on the next property).

Two - It won't be limitied to just the wealthy - residential investment trusts will become available which anyone can add to their SIPP (and anyone without a SIPP is being lax in their pension provision IMO - leaving your pension savings to City Slickers and 'Professional Financial Advisors' is a fools way to poverty in old age). These RIETS will be snapping up new build flats and quality City property and either pushing up or at least holding prices firm whilst wealthy individuals pick up their second and third homes in 'The Country'.

Thinking outside the box we may well have seen the end to the increase of residential property bought by ordinary individuals to live in (up from 45% ownership in '64 to around 70%+ now). Every cycle runs it's course and now it may be time for both the wealthy and/or property companies to take over the residential market once again.

Edited by ILBB

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Thinking outside the box we may well have seen the end to the increase of residential property bought by ordinary individuals to live in (up from 45% ownership in '64 to around 70%+ now). Every cycle runs it's course and now it may be time for both the wealthy and/or property companies to take over the residential market once again.

So, a return to Feudalism. We may as well vote for the Queen to be reinstated as head of state and to abolish parliament, seeing as she still owns most of the land that was stolen from the common folk - yes, she owns private property legally but ask.. how did the Royal family come by it?

An Englishman's home is....

a) His castle

B) A investment opportunity for someone else

c) Owned by a german upstart who came by the property by accident of birth

I'll give you a clue. It's not a).

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People seem very concerned that this is too generous to the rich. I see it differently;

The money was going to end up in the pension fund anyway, saving 40% tax.

By buying a property the rich person puts cash into the pocket of the vendor (might be a less-than-rich person) and then watches the value of the property collapse by 40% (more than offsetting the tax saving).

Rich person then discovers the trustees don't want to sell the property even though prices are falling, and has to watch it go all the way to the bottom.

Of course if you believe in endless HPI then the rich will get richer through having property in SIPPs.

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Thinking outside the box we may well have seen the end to the increase of residential property bought by ordinary individuals to live in (up from 45% ownership in '64 to around 70%+ now). Every cycle runs it's course and now it may be time for both the wealthy and/or property companies to take over the residential market once again.

http://news.bbc.co.uk/1/hi/uk_politics/4281456.stm

The chancellor, who began by paying tribute to Mr Blair's leadership, spelt out his desire for a society with opportunity for all from the conference podium.

Mr Brown wants a "home-owning, share-owning, asset-owning, wealth-owning democracy, not just for some but for all".

However, Gordon's actions tell a different story.

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People seem very concerned that this is too generous to the rich. I see it differently;

The money was going to end up in the pension fund anyway, saving 40% tax.

No, I disagree. Many, if not most people, are quite wary of equity and bond linked pensions, understandably as most of us have had disappointments with them along the way! That's one reason why many of us don't use pension companies and quite often our full tax allowance. However, rightly or wrongly, most of us believe we understand and trust residential property (especially with a 40%+ tax break) and it will encourage many to put money into SIPPs that would not have gone into 'City Slicker' or IFA pensions. This is especially true if one is considering a second property (it would be silly not to). Therefore Brown will almost certainly loose some tax! (Which he'll no doubt recover from those on the 20% tax rate).

Edited by ILBB

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Guest The_Oldie
So, a return to Feudalism. We may as well vote for the Queen to be reinstated as head of state

I hate to disappoint you, but The Queen is our head of state!

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No, I disagree. Many, if not most people, are quite wary of equity and bond linked pensions, understandably as most of us have had disappointments with them along the way! That's one reason why many of us don't use pension companies and quite often our full tax allowance. However, rightly or wrongly, most of us believe we understand and trust residential property (especially with a 40%+ tax break) and it will encourage many to put money into SIPPs that would not have gone into 'City Slicker' or IFA pensions. This is especially true if one is considering a second property (it would be silly not to). Therefore Brown will almost certainly loose some tax! (Which he'll no doubt recover from those on the 20% tax rate).

Yes, Brown will lose some tax. All these pension reforms are intended to encourage us to save more for our retirement. Without the tax incentive why would you tie money up in a penion? And he doesnt really lose the tax, because money is taxed when it is paid out as a pension.

The average investor is stupid. People invest in what has performed best over the last ten years. Right now that is residential property, commercial real estate and bonds with equities last. Five years ago, when everyone was putting there money into equities, that order was exactly the oposite.

How many people stopped investing in equities in 2002 or 03 and missed the 70% gains since then. They probably put their money into a BTL instead (... bricks and mortar are solid... I dont trust those city slickers).

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At least a company does something, like generate wealth and hopefully pay a dividend or issue buy backs. A house is dead money, it doesn't intrinsically contribute to the economy in any significant way, aside from people paying some money to keep it from falling apart.

No, a house provides warmth and shelter for one or more people. This allows them to work in a job near to the house. This is the reason location is an important factor. This is also the reason why house prices will crash as people lose their jobs.

frugalista

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There are some very clever people on this forum. Which is why I'm so amazed that so few of them can spell the word "lose"

you may think it's petty, but it dont 'arf get on my nerves!

Edited by Casual Observer

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  • 301 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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