Lavalas Posted February 8, 2016 Share Posted February 8, 2016 Annoyingly inaccurate headline too - buying your family home will not cost you any extra money in tax. Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted February 8, 2016 Share Posted February 8, 2016 If interest rates were at a normal level this nonsense of keeping your previous home as an investment would not be an option. Quote Link to comment Share on other sites More sharing options...
GrizzlyDave Posted February 8, 2016 Share Posted February 8, 2016 Interest rates at 5% would be great, but it's not going to happen any time soon (a rate rise before 2020 seems unlikely in my opinion). But yes, at rates of 5% the maths of a second home on a mortgage (even a small and cheap mortgage) look very challenging. In terms of 'hard graft', I used this term to crassly make the point that there is no BOMAD is in my story, but I have done well for myself rising to the top 2% of earners in the UK, and that has been through pure technical route, rather than the greasy management corporate ladder. Having bought late 2005, the only good fortune I have had has been a cheap interest only mortgage. There is nothing I would like more than to see prices fall 50%, and then some controls brought in to stop the market getting out of hand again. Quote Link to comment Share on other sites More sharing options...
fluteroop Posted February 8, 2016 Share Posted February 8, 2016 They need to fall by much more than that though. 300k for a small flat in london is still twice the price it's sustainable at. Quote Link to comment Share on other sites More sharing options...
fluteroop Posted February 8, 2016 Share Posted February 8, 2016 Then again, everything is sustainable in a cashless society. Quote Link to comment Share on other sites More sharing options...
GrizzlyDave Posted February 8, 2016 Share Posted February 8, 2016 Yes London is a law unto itself - as is Sydney, Tokyo, Paris, New York - thanks to globalised credit bubbles. If the banking system collapses - as it may well do in the next crash (which is close now) - then you may see +50% falls in London; particularly with that type of property and the amount of BTL / foreign investment. Quote Link to comment Share on other sites More sharing options...
Si1 Posted February 8, 2016 Author Share Posted February 8, 2016 In terms of 'hard graft', I used this term to crassly make the point that there is no BOMAD is in my story, but I have done well for myself rising to the top 2% of earners in the UK, and that has been through pure technical route, rather than the greasy management corporate ladder. Having bought late 2005, the only good fortune I have had has been a cheap interest only mortgage. I smell bull. You're complaining over a 10k tax on owning an second property? Quote Link to comment Share on other sites More sharing options...
Motor_Blade Posted February 8, 2016 Share Posted February 8, 2016 Does the Torygraph really have nothing better to publish???? Quote Link to comment Share on other sites More sharing options...
GrizzlyDave Posted February 8, 2016 Share Posted February 8, 2016 No its not 'Bull' When you are already looking to pay £12-15k on stamp duty, another £10k up front is not a trivial sum! Well not to me anyway! Quote Link to comment Share on other sites More sharing options...
Quicken Posted February 8, 2016 Share Posted February 8, 2016 Gareth said: You can totally understand it where investors have lots of properties or slum properties, or where people are monopolising the property market to try and turn a profit." Right. So they didn't want to turn a 'profit'; just an unearned capital gain through speculative land banking. Mental gymnastics, indeed. It won't end well. Quote Link to comment Share on other sites More sharing options...
Quicken Posted February 8, 2016 Share Posted February 8, 2016 No its not 'Bull' When you are already looking to pay £12-15k on stamp duty, another £10k up front is not a trivial sum! Well not to me anyway! This is particularly important for the 'claim it back after 18 months on main residence' rule. Got to have the 'cash' up front first. Crunch. Quote Link to comment Share on other sites More sharing options...
justthisbloke Posted February 8, 2016 Share Posted February 8, 2016 I smell bull. You're complaining over a 10k tax on owning an second property? I think you're being harsh. Grizzler's post was just symptomatic of how blinded even intelligent people have come with regards to investing and the accumulation of personal capital. He says he's a top earning technical specialist - and I have no reason not believe that. Yet, when it comes to investing, a small tax increase[1] on one particular asset class was interpreted as the government being against "aspiration". It'll take HPC to remove this blindness from the population. Unfortunately, it is so deep and so ingrained that only real financial pain will break the national addiction. But when it is removed, people will start seeing investment and personal capital accumulation as a diverse and multi-faceted opportunity which benefits both them and the businesses they invest in. Actually, that probably won't happen. Everyone will rush into the next dead cert. Whatever that is. But, hey, I'm optimistic. [1] one off 3% stamp duty compares favourably with the 4% initial fees plus 1.5% annual fees charged by some investment funds. Admittedly, that's a bad example as you'd need to be a sucker to pay those. But apparently a lot of people did! Quote Link to comment Share on other sites More sharing options...
Amiinsane Posted February 8, 2016 Share Posted February 8, 2016 In terms of 'hard graft', I used this term to crassly make the point that there is no BOMAD is in my story, but I have done well for myself rising to the top 2% of earners in the UK, and that has been through pure technical route, rather than the greasy management corporate ladder. Having bought late 2005, the only good fortune I have had has been a cheap interest only mortgage. That's quite a large bit of good fortune, coupled with the government propping up your capital investment since 2008. You should have had a few years when the value of your home fell. This is a socialised market. It has little to do with the 'graft' of the people who got in at the right time and it's a bit churlish to expect to continue to get favourable terms for another purchase. Quote Link to comment Share on other sites More sharing options...
GrizzlyDave Posted February 8, 2016 Share Posted February 8, 2016 That's quite a large bit of good fortune, coupled with the government propping up your capital investment since 2008. You should have had a few years when the value of your home fell. This is a socialised market. It has little to do with the 'graft' of the people who got in at the right time and it's a bit churlish to expect to continue to get favourable terms for another purchase. Yes it did fall, probably -£25k on purchase price around 2009 (based on what the house 3 doors down went for). Then it's crept up in price maybe 5% p/a. Never went into NE because we chucked so much money at the mortgage. Quote Link to comment Share on other sites More sharing options...
Si1 Posted February 8, 2016 Author Share Posted February 8, 2016 No its not 'Bull' When you are already looking to pay £12-15k on stamp duty, another £10k up front is not a trivial sum! Well not to me anyway! Not on an 80k income And getting back on topic, why shouldn't YOU shoulder the burden of the risk to the economy of owning multiple properties, why are you saying I should pay for the risk in the long run instead? Quote Link to comment Share on other sites More sharing options...
justthisbloke Posted February 8, 2016 Share Posted February 8, 2016 Si1 - that's an interesting take on the stamp duty. It's the govt realising that future publicly funded bailouts will be caused by leveraged BTL so they're collecting insurance premiums. Quote Link to comment Share on other sites More sharing options...
Si1 Posted February 8, 2016 Author Share Posted February 8, 2016 Si1 - that's an interesting take on the stamp duty. It's the govt realising that future publicly funded bailouts will be caused by leveraged BTL so they're collecting insurance premiums. Or simply using tax to dampen speculation. I suspect that additional stamp duty is the much cheaper aggregate option. Quote Link to comment Share on other sites More sharing options...
GrizzlyDave Posted February 8, 2016 Share Posted February 8, 2016 I can assure you £10k is not a trivial sum to me. Quote Link to comment Share on other sites More sharing options...
Amiinsane Posted February 8, 2016 Share Posted February 8, 2016 I can assure you £10k is not a trivial sum to me. Then you shouldn't be taking on maintenance, debt etc for 2 properties. Quote Link to comment Share on other sites More sharing options...
Agentimmo Posted February 8, 2016 Share Posted February 8, 2016 Then you shouldn't be taking on maintenance, debt etc for 2 properties. This. In a nutshell. Quote Link to comment Share on other sites More sharing options...
GrizzlyDave Posted February 8, 2016 Share Posted February 8, 2016 Then you shouldn't be taking on maintenance, debt etc for 2 properties. Maintenance has value (like a well maintained car), extra tax does not add value (except to the exchequer). Look the extra £10k is not an affordability issue, it is an issue of acceptability. Particularly in our multi-standard tax avoidance climate. I am trying to share my experiences, and bring a bit of perspective, but there is no need to question my legitimacy. Quote Link to comment Share on other sites More sharing options...
justthisbloke Posted February 8, 2016 Share Posted February 8, 2016 Maintenance has value (like a well maintained car), extra tax does not add value (except to the exchequer). Look the extra £10k is not an affordability issue, it is an issue of acceptability. Particularly in our multi-standard tax avoidance climate. I am trying to share my experiences, and bring a bit of perspective, but there is no need to question my legitimacy. I agree. Harshness doesn't help debate and discussion. I'm not interested in questioning your legitimacy - as I said upthread, your position is far from unique and is entirely believable. I'm more interested in why you see becoming a leveraged landlord as a potential route leading to domestic resilience and a pension. I'm interested in whether you are/were (as I put it rather crudely) "blind" to alternatives or whether you have assessed them and are put off for some reason. I'm particularly interested in your reasoning if the latter - as it will challenge my mental model and make me reassess and revaluate. Challenge to one's own opinions is never bad. Quote Link to comment Share on other sites More sharing options...
Si1 Posted February 8, 2016 Author Share Posted February 8, 2016 , extra tax does not add value (except to the exchequer). No Quote Link to comment Share on other sites More sharing options...
GrizzlyDave Posted February 8, 2016 Share Posted February 8, 2016 Hi JTB, The interest only mortgage we have is less than 1% above the base rate - and something never to be seen again - I am keen to keep it if possible. Changing it to a Letting mortgage (incurring a £500 fee p/a) would mean a very positive income a month even factoring in the BTL taxes (assuming rented out the full 12 months). This would pay the remaining 50% mortgage off before we retire. We could then retire back to the property or keep it whilst it pays for our bingo money. Quote Link to comment Share on other sites More sharing options...
Si1 Posted February 8, 2016 Author Share Posted February 8, 2016 Hi JTB, The interest only mortgage we have is less than 1% above the base rate - and something never to be seen again - I am keen to keep it if possible. And you're quibbling over 10 grand? Quote Link to comment Share on other sites More sharing options...
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