Radio 4. Listen Again Cos You've Missed It.

[khali]

Interesting interview with a rep from Portman, who've recently withdrawn from lending to new build speculators.

Explanation of the collusion between builders and buyers to artificially maintain high prices by agreeing a price, going through all the paperwork with solicitors ect - all the way to Land Registry recording the Sold For amount. Buyer then gets an "off contract" kickback of anything up to 30% of "agreed sale price" from buider.

http://www.bbc.co.uk/radio4/youandyours/

This link won't take you directly to the program as it is still being broadcast, but if you root around later for todays You and Yours program, it's the first article in the program.

[Casual Observer]

Interesting interview with a rep from Portman, who've recently withdrawn from lending to new build speculators.

Explanation of the collusion between builders and buyers to artificially maintain high prices by agreeing a price, going through all the paperwork with solicitors ect - all the way to Land Registry recording the Sold For amount. Buyer then gets an "off contract" kickback of anything up to 30% of "agreed sale price" from buider.

http://www.bbc.co.uk/radio4/youandyours/

This link won't take you directly to the program as it is still being broadcast, but if you root around later for todays You and Yours program, it's the first article in the program.

To what extent is this over recording contributing to the price indices. If they recorded the honest sold price, what would the Halifax figure be? Anyone care to estimate, based on the proportion of these new builds, compared to total market.

[khali]

To what extent is this over recording contributing to the price indices. If they recorded the honest sold price, what would the Halifax figure be? Anyone care to estimate, based on the proportion of these new builds, compared to total market.

It sounded to me as though you could look the Land Registry prices for any recently traded new build 1 - 2 bed flats and deduct 5% - 30% to get a clearer idea of actual price paid.

It also sounded to me like RICS et al surveyors & valuers are turning a blind eye to this deliberate manipulation of price reporting for fear of losing business.

North London Rent Girl's done a decent synopsis here:

http://www.housepricecrash.co.uk/forum/ind...showtopic=20889

Edited December 21, 2005 by khali

[Goat]

To what extent is this over recording contributing to the price indices. If they recorded the honest sold price, what would the Halifax figure be? Anyone care to estimate, based on the proportion of these new builds, compared to total market.

Should not have too great an effect, I think on average there are something like 1.5 to 2 million housing transactions per annum, new build is only going to be a very small percentage of this.

It also sounded to me like RICS et al surveyors & valuers are turning a blind eye to this deliberate manipulation of price reporting for fear of losing business.

Not so sure about that, the surveyors that I know are honest and would not delibarately manipulate the price, they are after all more worried about being sued than anything else.

I think its more the case that valuations are always based on the last sale price of similar properties and are a valuation at that point in time. They do not take account of likely future trends or investment values.

[BuyingBear]

Should not have too great an effect, I think on average there are something like 1.5 to 2 million housing transactions per annum, new build is only going to be a very small percentage of this.

I see "deposit paid" and "stamp duty paid" over quite a number of properties in the local rag, right from Victorian terraces to 60's boxes.

Edited December 21, 2005 by BuyingBear

[Blue Peter]

I see "deposit paid" and "stamp duty paid" over quite a number of properties in the local rag, right from Victorian terraces to 60's boxes.

As a general question, if someone pays my deposit or stamp duty, then it would seem to me that they were giving me a sum of money. Is not the Inland Revenue normally interested in such gifts? and would I be expected to pay income tax on it? (or are the nice vendors doing that for me as well?)?

Peter.

[r thritis]

As a general question, if someone pays my deposit or stamp duty, then it would seem to me that they were giving me a sum of money. Is not the Inland Revenue normally interested in such gifts? and would I be expected to pay income tax on it? (or are the nice vendors doing that for me as well?)?

Peter.

Actually, I suppose one side-effect of this artificial inflation of the sale price is that the amount of stamp duty paid will be higher.

[Tonester]

As a general question, if someone pays my deposit or stamp duty, then it would seem to me that they were giving me a sum of money. Is not the Inland Revenue normally interested in such gifts? and would I be expected to pay income tax on it? (or are the nice vendors doing that for me as well?)?

Peter.

Good question - anyone know about this?

[eric pebble]

To what extent is this over recording contributing to the price indices. If they recorded the honest sold price, what would the Halifax figure be? Anyone care to estimate, based on the proportion of these new builds, compared to total market.

I heard this programme today: It is seriously worth listening to. The things the VI's will do to keep this whole Pyramid Selling Scam going [the "UK housing market"] is simply staggering. Effectively - this is market fixing/price fixing -- just like the Buy-to-lie Scam - keeping prices "up" totally corruptly - and it SERIOUSLY costs hundreds of thousands of people tens/hundreds of thousands!! And they don't even realise it!!

In short: "Property Developers" are selling off the mountains of 1-2 bed "luxury flats" for, say, "£160k" - and THIS figure goes to the Land Registry - and therefore the "value" is "£160k". Very quietly - and by SEPERATE contract in the background - because they can't sell the flats for "£160k" in reality - they are giving "buyers" £40-50k "Cashback" - so the flat ACTUALLY is selling for £100-110k!!! BUT - as far as the official figures are concernend - and as registered at the Land Registry - the flats/properties have "sold" for £160k - and the "market value" is "£160k"!! This way - the "market" stays bouyant - i.e. everything is "OK" - the spin goes on - "Prices not dropping" - the overall "UK House Prices" stay "OK" or have "gone up X%" .....

i.e. A TOTAL SCAM....... And if it were ANY other business sector - or in the City - the perpetrators would either be fined heavily or go to jail!!! for pricefixing/market fixing - BUT - the "Housing Market" is totally unregulated - and the scams just go on and on............. Incredible.

Edited December 22, 2005 by eric pebble

[Goat]

Good question - anyone know about this?

No the IR are not interested in this, it is not income so it is not subject to income tax, it is simply a reduction in the cost of purchasing the property.

The only exception would be if the property is an investment property, the cashback would then reduce the base cost in the capital gains computation thus increasing the taxable gain or more likely reducing the allowable loss.

[underpressuretobuy]

No the IR are not interested in this, it is not income so it is not subject to income tax, it is simply a reduction in the cost of purchasing the property.

The only exception would be if the property is an investment property, the cashback would then reduce the base cost in the capital gains computation thus increasing the taxable gain or more likely reducing the allowable loss.

The Inland Revenue are definately going to be interested in the cost of purchasing property from the point of view of stamp duty. But does this mean that if you tell the land registry that you paid £160,000 when actually you paid £100,000 -£110,000 (under the stamp duty threshold) then you will have to pay stamp duty when you would not have had to if the real price had been publicly declared?

[Tonester]

You would pay stamp duty on £160,000. However I imagine most cases of this would not be £50,000 difference between real/quoted price since I would have thought the surveyour would be closer to the mark than say it'd be worth £160,000. If the surveyor says it is worth inflated price I guess there's no other way to identify the difference without having bank transaction details following sale?

[eric pebble]

The Inland Revenue are definately going to be interested in the cost of purchasing property from the point of view of stamp duty. But does this mean that if you tell the land registry that you paid £160,000 when actually you paid £100,000 -£110,000 (under the stamp duty threshold) then you will have to pay stamp duty when you would not have had to if the real price had been publicly declared?

Well............. you say that - but they probably can't cope....

[eric pebble]

You would pay stamp duty on £160,000. However I imagine most cases of this would not be £50,000 difference between real/quoted price since I would have thought the surveyour would be closer to the mark than say it'd be worth £160,000. If the surveyor says it is worth inflated price I guess there's no other way to identify the difference without having bank transaction details following sale?

Fact is -- it is just massive FRAUD - all holding up and falsifying the "housing" market - a huge massive pyramid selling scam - which no one in authority seems to dare investigate and prosecute...

[Justice]

Starting to sound as good as the spanish property market where the gov is now out to get all them punters who under declared the value of the property. Can even make you sell them the property at the decaired sale price if you won't pay the tax they demand on the true sale price.

[apom]

Should not have too great an effect, I think on average there are something like 1.5 to 2 million housing transactions per annum, new build is only going to be a very small percentage of this.

Not so sure about that, the surveyors that I know are honest and would not delibarately manipulate the price, they are after all more worried about being sued than anything else.

I think its more the case that valuations are always based on the last sale price of similar properties and are a valuation at that point in time. They do not take account of likely future trends or investment values.

Not that small..

for the difference between all new builds and existing property is that the new builds need to be sold.

How many were built last year?

[Casual Observer]

Starting to sound as good as the spanish property market where the gov is now out to get all them punters who under declared the value of the property. Can even make you sell them the property at the decaired sale price if you won't pay the tax they demand on the true sale price.

Now that sounds like an effective penalty to further manipulation! I can't see our government having tghe balls to do anything so bold.

[eric pebble]

Now that sounds like an effective penalty to further manipulation! I can't see our government having tghe balls to do anything so bold.

It's amazing. The tax man chases you for a few quid -- and yet - right there in front of his face is this sort of thing - involving tens of thousands.....

[deano]

It's amazing. The tax man chases you for a few quid -- and yet - right there in front of his face is this sort of thing - involving tens of thousands.....

I have an unpaid tax bill of £0.45p at home, no really I'm not jesting you! The cost of them sending me the bill 'post, envelope etc' probably exceeds the £0.45p bill.

[eric pebble]

I have an unpaid tax bill of £0.45p at home, no really I'm not jesting you! The cost of them sending me the bill 'post, envelope etc' probably exceeds the £0.45p bill.

You couldn't make it up!!