Has Osborne Played A Blinder ?

[midnitecruiser]

One interesting thing that huth does offer viewers - is what a house looks like when its not had much maintenance over 25 years. They are a total mess.

Maintenance on 6 btl places over 25 years each ? That's easily 6 figures without even trying.

I guess it really depends on the LTV and whats left after covering the mortgages. Maintenance costs are tax deductable and losses can be carried forward. Depends how sensible and organised they are.

[“Nasty Piece of work”]

We will only know in about 15-20 years time if he was a astute investor or a t1t.

t1t.

[andygivenup]

BTLers are a bit like a religious group, you can tell them till the cows come home there is no God and they are wasting their

time on a Sunday morning but they just will not believe you, ever..

[ccc]

I guess it really depends on the LTV and whats left after covering the mortgages. Maintenance costs are tax deductable and losses can be carried forward. Depends how sensible and organised they are.

But as others have alluded to - how many of these 'investors' will accurately log everything over the 25 years so they can truly say if 'it was worth it' or not ?

I doubt even one in a hundred. The zero cost for your own labour being the most obvious and ridiculous example.

They have to ask themselves - if someone wanted me to do this work at their house over x days - what would they have to pay me ?

If they don't include that figure in their costs - their entire calculations are worth sweet fa.

Edited October 28, 2014 by ccc

[Exiled Canadian]

What happens when they are too old/infirm to do the work themselves? If they have to start paying an agent/painters and decorators etc that "pension" income starts to dwindle.

[ccc]

What happens when they are too old/infirm to do the work themselves? If they have to start paying an agent/painters and decorators etc that "pension" income starts to dwindle.

Don't worry - according to everyone on homes under the hammer - your cousin who is a plumber just pops around and does all the work for free when you demand it. ....

[Bloo Loo]

But as others have alluded to - how many of these 'investors' will accurately log everything over the 25 years so they can truly say if 'it was worth it' or not ?

I doubt even one in a hundred. The zero cost for your own labour being the most obvious and ridiculous example.

They have to ask themselves - if someone wanted me to do this work at their house over x days - what would they have to pay me ?

If they don't include that figure in their costs - their entire calculations are worth sweet fa.

if the income covers the costs, and in order to get something out, then your pay is for your labour.

what you might end up with is a capital gain, and 25 years of employment.

[Sandwiches33]

I was musing as to how many "amateur" landlords there are who are actually having a good time of it. Granted you see lots of message board postings from people bragging about their mega portfolio's but anecdotally how many BTL landlords do you know who think its making them money.

I know three people who have a BTL property, of this albeit limited sample, one openly admits its was a mistake and that the property is costing them money and the other two generally comment that they'd like to sell and get their equity back (they all bought c. 2007). All three complain about the hassle and unexpected expenses of voids/boilers etc.

If this is the nature of the chat down the golf club etc. then we might not see the stampede into BTL from the 55+ pensioners that we might expect.

Also bear in mind that everyone releasing their pension early will receive advice from and adviser who will be keen to turn their new found windfall into some type of investment product yielding a commission or fees. I'm confident that these chaps will pointing out the downsides of BTL.

Well this is the thing. other investments wont call you up at 3 am to tell you the roof has sprung a leak. The TV shows sell BTL as you just take free money for people living in your house. My landlord has admitted to me openly they regret it and its more hassle than its worth and has asked if I would buy the house off them. I said I might but my offer would offend them. I would imagine if you owned a house outright or had bought it pre boom times it might be worth the hassle but not now.I cannot imagine dealing with tenants in your sixties. I cannot see how any yield could possibly match other revenue streams you can set up quiet easily. BTL only works with big HPI and even then its imaginary wealth which isn't liquid.

[ccc]

if the income covers the costs, and in order to get something out, then your pay is for your labour.

what you might end up with is a capital gain, and 25 years of employment.

Pretty much - a part time job. Maybe worth it for some - but certainly not for all.

I would love to see a real detailed breakdown from someone who logged it to the nth degree.I doubt much of that is about.

[Billy Ray Valentine]

I don't think it will become apparent to most that the market is crashing until well into next year, probably the summer at the very earliest.

No need for Osborne to try and prop up the market further at this stage.

Many people I speak to about these things seem to think we are in a 'recovery' of sorts.

Wouldn't any drastic policies at this stage be seen by many as an admission that previous policies were a failure?

I suspect any 'softening' at this stage will be spun as things becoming 'stable'.

We'll find out soon enough.

edit: Or perhaps he has played a blinder, postponed the crash until next year when a new Labour/UKIP coalition will be on hand to take the blame when TSHTF.

Edited October 28, 2014 by Billy Ray Valentine

[shindigger]

The 2 sloane ***** i just saw interview each other on what Sky calls its "business news" are certainly hoping for something.

Singles all round on there.

Daddy, make it stop.

Market do your worst.

[renting til I die]

All BTLs have to declare them.

ROFL , of course they all do!

The tax man really should be pulling his finger out.

Edited October 28, 2014 by renting til I die

[renting til I die]

But as others have alluded to - how many of these 'investors' will accurately log everything over the 25 years so they can truly say if 'it was worth it' or not ?

I doubt even one in a hundred. The zero cost for your own labour being the most obvious and ridiculous example.

They have to ask themselves - if someone wanted me to do this work at their house over x days - what would they have to pay me ?

If they don't include that figure in their costs - their entire calculations are worth sweet fa.

I've been renting for so long, even if I owned a place, I really can't see myself decorating. I like having free time! When I think how much time my dad has spend doing up his various homes/houses over his lifetime, it makes me think just how much time his as wasted! If I do need any decorating done, I'll be paying someone else to do it!

[Venger]

A pal has six BTL's all bought on IO mortgages all 2006-8 he is self employed so he has to declare them. His point is that in X number of years he will have six houses that will all be

worth more than he paid and he will sell some to pay off others and even if the net result is that he only ends up with one, it will be one more than me, which in his eyes means that

in his retirement he will have some form of income, which I will not. I have lost count of the number of times that we have shall we say, agreed to disagree because as he points out

I can not be sure that the end result will be to his advantage or not.

We will only know in about 15-20 years time if he was a astute investor or a t1t.

For me his status is clear already.... however there is a reversing now... plenty a nice place having it nice rows of shops replaced by cheapo kebab and pawnshops, and so on.

But one group freeloads on a gigantic scale, managing to rake in much money than skivers ever could with no effort of contribution to society: landowners, including homeowners. The average homeowner might well be shocked and indignant at being described as a freeloader. But the tax system makes them so.

Winston Churchill explained this during his speech in 1909:-

Roads are made, streets are made, railway services are improved, electric light turns night into day, …and all the while the landlord sits still… To not one of these improvements does the land monopolist as a land monopolist contribute, and yet by every one of them the value of his land is sensibly enhanced.

Edited October 28, 2014 by Venger

[renting til I die]

Don't worry - according to everyone on homes under the hammer - your cousin who is a plumber just pops around and does all the work for free when you demand it. ....

I 'm sure there must be some off the screen bitching going on when all these favours aren't returned!

[cybernoid]

I would be very surprised if he was doing all this for no return at all I have known him from school and have always considered him a very straight forward honest individual.

I don't doubt his sincerity, just his maths and/or investment acumen.

Ive seen plenty of the numbers for places Ive rented and it just doesn't add up unless you bought prior to 2004. In most places.

At the slum end of the market yields look better but you have more to do, and are more likely to have a tenant in arrears that you cant shift for a while.

It doesn't work.

I guess for some people they like to keep busy and don't have what it takes to do some research for other better investments, so for them its more of a hobby. Anecdotally Ive never known a landlord to be intelligent, those with serious money tend not to let out their multiple properties if they have them. Its the middle lot, the guy in the audi on hp driving 10cms from your ass on the motorway whilst you're still overtaking, the middle manager in an office that the owner smirks about when no-ones looking, those sorts, in my experience.

As far as Im concerned they subsidise my living cost with their poor maths and take on residential property risk so I don't have to, so I find them useful. But like those that employ them, I feel a little sorry for them too.

[ccc]

I 'm sure there must be some off the screen bitching going on when all these favours aren't returned!

Yep I think that quite a lot when watching that pish !

[gf3]

The other problem is CGT If you have shares you can sell them off each year and stay under the CGT limit or do an NISA.

Investment 3 months 6 months 1 year 3 years Fundsmith Equity I Acc 5.03% 10.03% 13.21% 63.04%

[gf3]

why did that look fine until I pressed the post key 3 months 5.03% , 6months 10.03% ect

[ThePiltdownMan]

Wouldn't surprise me if travel industry was the main beneficiary.

[MississippiJohnHurt]

( Or should be be locked up for fraud. ) Market has peaked and turned. http://www.bbc.co.uk/news/business-29799937 Just as: http://www.bbc.co.uk/news/business-29799942 "Thousands set to cash in pension pots next year" Perfect. Crash cancelled.

i was thinking about this recently as on its face, it seems like it could provide a reasonable bull case for property (i like trying to find these as a counter to my natural bearishness!)

So i tried to research the average pension pot and read in a couple of places that it was £36k. Not sure how reliable the sources were - one was the bbc and one referenced the ABI but didn't link to anything they had published. But if that number is correct, it wont make any difference in any part of the country, except perhaps v cheap 1 and 2 bed flats up in Scotland / north (and hey, if the boomers want to be btl landlords in the cheap end of the market for the entire course of their their retirement, then all the very best to them.

i also thought about whether people would use the pot to get a btl mortgage, bit given that the objective is to provide income i cant see it being viable on a large scale (ave rental income figures and average yields would suggest not ?)

i think more likely is that products fill the gap , perhaps grouped btls, managed and with 'guaranteed' yield, etc. That would soak up plenty of new build and id be surprised if the housebuilders aren't already on it.

[zugzwang]

Has Osborne played a blinder? Short answer, no.

Here's the long answer:

[Wurzel Of Highbridge]

6 months is a long time for the market without a fix. I expect bridging measures at autumn statement.

I hope not, the deficit is already ridiculous, It's time to pop the bubble!

It will be a propaganda based measure which will be if re-elected we promise to:

1) Abolish stampduty as it's a tax on hardworking people

2) Bring back mortgage interest relief to help hardworking people

3) both of the above.

We will have to wait until the 3 December for the news.. One more LR fall between now and then.

[gf3]

i was thinking about this recently as on its face, it seems like it could provide a reasonable bull case for property (i like trying to find these as a counter to my natural bearishness!)

So i tried to research the average pension pot and read in a couple of places that it was £36k. Not sure how reliable the sources were - one was the bbc and one referenced the ABI but didn't link to anything they had published. But if that number is correct, it wont make any difference in any part of the country, except perhaps v cheap 1 and 2 bed flats up in Scotland / north (and hey, if the boomers want to be btl landlords in the cheap end of the market for the entire course of their their retirement, then all the very best to them.

i also thought about whether people would use the pot to get a btl mortgage, bit given that the objective is to provide income i cant see it being viable on a large scale (ave rental income figures and average yields would suggest not ?)

i think more likely is that products fill the gap , perhaps grouped btls, managed and with 'guaranteed' yield, etc. That would soak up plenty of new build and id be surprised if the housebuilders aren't already on it.

On the other side of the coin. I have put a lot more money into my pension since the rule change. It now seems worth while.Stock markets tend to look at theses things and price accordingly.

[spyguy]

One for an actuary.

Can you liquidate Defined Benefit Pensions?

If not then this will amount to nothing - other than a bit of competition for annuities and Defined Contribution pensions, which are very few and of limited value.

If you can, would many people with a DC pension be stupid enough to liquidate them for a payout?