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juvenal

Second Home Buyers Unworried by Stamp Duty Changes

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https://www.bournemouthecho.co.uk/news/16968014.second-home-purchases-up-across-dorset-despite-stamp-duty-boost/

A third (1240) of all house sales last year in Bournemouth were to second home buyers. 770 more in Poole alone. 2000 second home purchases in the county of Dorset.

So much for any changes in property greed cause by SD changes.....

Edited by juvenal

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If you own a property with equity these days you don't sell it. You rent it. Get some poor renter pleb to pay your mortgage on your new place and pocket the difference towards this year's holidays.

Cheap credit is at fault.

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This is happening in many places, coast and inland......empty holiday homes everywhere, when they become vacant they are stored, if they are sold many will be to someone who has the available funds looking to possibly retire to in the future and will use as a holiday home for now sometimes renting it out periodically, sometimes not......once they bought in Europe, now they look at home.......certain desirable places going the way of London, all this does have a major mostly negative impact on local communities in various different ways.ūüėČ

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13 hours ago, spyguy said:

Well its not stamp duty thats going to knack them.

As Winkie below, many (most?) 2nd home buyers have low or no borrowings, savings, & well funded pensions.  They dislike asset price reductions but can afford to weather them & understand when to hold (low priced asset has good fundamentals) & when to sell (bubble bursting).

How will they be 'knacked'?

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28 minutes ago, hotblack42 said:

As Winkie below, many (most?) 2nd home buyers have low or no borrowings, savings, & well funded pensions.  They dislike asset price reductions but can afford to weather them & understand when to hold (low priced asset has good fundamentals) & when to sell (bubble bursting).

How will they be 'knacked'?

Nope.

They are usign a very broad term - 2nd homes owenrs.

In that youve BTL, holiday lets and 2nd homes i..e not let out.

Tje majorty will ave mortgage finance attached on the pruchase.

Theavergae UK house is ~200k. The average UK saving pot is a few hunder.

Non OO housing will be hit i nthe following ways:

- Removal of tax advantges on holiday lets, moving to taxing higher than OO.

- Higher IR, causing lower price. All of a sudden that equity youve borrowed against to 'invst' in a holiday in he dales disappaers, along with equity in the place you bought.

- Higher c tax rates.

 

 

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12 minutes ago, spyguy said:

Nope.

They are usign a very broad term - 2nd homes owenrs.

In that youve BTL, holiday lets and 2nd homes i..e not let out.

Tje majorty will ave mortgage finance attached on the pruchase.

Theavergae UK house is ~200k. The average UK saving pot is a few hunder.

Non OO housing will be hit i nthe following ways:

- Removal of tax advantges on holiday lets, moving to taxing higher than OO.

- Higher IR, causing lower price. All of a sudden that equity youve borrowed against to 'invst' in a holiday in he dales disappaers, along with equity in the place you bought.

- Higher c tax rates.

 

 

Sure I can see this for leveraged BTL. People I know with > 1 property are more in the category of old money or heading that way. For them +3% SDLT is just something to take into consideration, not something that will trigger a crises. Higher interest rates will be adjusted to & offset somewhat by their cash investments. I'm just saying this for balance. I'm as keen as anyone on here to see a HPC or correction.

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29 minutes ago, Locke said:

It amuses (and saddens) me greatly that basically no one understands this.

Its moer amusing that people dont graps that buying >1 property vastly increases their exposure to property risk.

Consider this case, based on chating to some idiot in the pub:

Mr + Mrs InItToWinit. Mortgage paid off, 'withdraw' 100k from OO (200k) to buy a holiday cottage by the coast. Borrow another 100k - Well, IR are so low wed be stupid to not to. Leeds building scoiety - always leeds building society.

'We can rent it out and make money - you dont get nothing keeping your money in the bank - and have free holidays'

So, start  with 200k of housing equity, 0 debt.

So now they have 200k of housing equity, 200k of debt -  100k on extendinding mortgage, 100k secured on holiday let.

We'll soon pay that 100k off. The 100k of debt will be paid by the holiday let income.

 

Possible future:

Opps - econonics slowdown, IR go up.

OO gets values at 150k; 100k for a quick sale. Holiday let, well noone is buying them at the moment.

150k of equity, 200k of debt.

Income alls by hlaf as the slowdown has hit. Really struggling to pay that 100k ER. Noone rentign cottage, so they are paying that too.

Holiday let repod - We could just not afford to pay it. We'll piost keys thru bank's letterb ox ... LPA sells for 120k, 80k loan charged to OO hous:

180k of debt, 150k of equity.

Im afraid we're going to repo the OO too. And you still owe 30k.

 

~5 years time, 200k of equity, turned to 0 equity, 30k debt.

 

 

 

 

 

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6 minutes ago, hotblack42 said:

Sure I can see this for leveraged BTL. People I know with > 1 property are more in the category of old money or heading that way. For them +3% SDLT is just something to take into consideration, not something that will trigger a crises. Higher interest rates will be adjusted to & offset somewhat by their cash investments. I'm just saying this for balance. I'm as keen as anyone on here to see a HPC or correction.

You might know richer people that average - top 5%.

There are no many people like that.

UK average wage is ~27k. 60% of workign age earn that or less.

Once you get to 70k-ish you are well ino the top decile. The numers just are not there.

The UK is in its current state be people borrowing money not earnign it.

 

 

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13 hours ago, Bruce Banner said:

Standard procedure for local papers...

"House prices are falling everywhere but here".

Lake Wobegong - everyone local is above average.

 

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On 08/10/2018 at 17:51, juvenal said:

https://www.bournemouthecho.co.uk/news/16968014.second-home-purchases-up-across-dorset-despite-stamp-duty-boost/

A third (1240) of all house sales last year in Bournemouth were to second home buyers. 770 more in Poole alone. 2000 second home purchases in the county of Dorset.

So much for any changes in property greed cause by SD changes.....

Now, on a sidish note.

I've been  across Bmouth-Poole a few times over summer.

Forest of To Let and For Sale signs does not do it justice.

 

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2 hours ago, spyguy said:

Now, on a sidish note.

I've been  across Bmouth-Poole a few times over summer.

Forest of To Let and For Sale signs does not do it justice.

 

I think what is saying there would be even more signs if it were not for second home buyers or movers in buying them.....prices then would reduce in a more timely and realistic manner.......because many of the working locals income can't support buying them.......herein lies the problem, a problem that is not going away.ūüėČ

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Most who buy on the south coast are cash rich people of all ages as a lot of young buyers are buying in Poole.  Many buy as a get away then when retire sell the bigger house  and move to a less frenetic area by the sea

a lot of people buy when they get an inheritance 

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On 09/10/2018 at 11:04, spyguy said:

Possible future:

and there could be a nuclear war - you cannot stop living because you are worried about unforeseen events that may never happen 

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1 minute ago, happyguy said:

and there could be a nuclear war - you cannot stop living because you are worried about unforeseen events that may never happen 

eh?

so property investing is 'living' ???

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I did not say it was!!!! 

I said you cannot stop making decisions and living your life because of some unforeseen eventuality

I could say I may have a car accident today so I will not go to work

I may slip in the bathroom tile and sprain an ankle so I will stay in bed all day 

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4 minutes ago, happyguy said:

I did not say it was!!!! 

I said you cannot stop making decisions and living your life because of some unforeseen eventuality

I could say I may have a car accident today so I will not go to work

I may slip in the bathroom tile and sprain an ankle so I will stay in bed all day 

You're a boomer aren't you.

I might have a motorbike accident...so I only buy older second hand motorbikes

I may slip in the bathroom...so I put down a bath mat

I may get caught in negative equity if I buy now...so I rent while I wait for the market to collapse and get on with my life.

 

I am enjoying imagining you squealing like a little piggy, sweating and shaking thinking about young people checking out and refusing to play your boomer HPI game. Enjoy your state-funded retirement home and "carer".

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31 minutes ago, happyguy said:

and there could be a nuclear war - you cannot stop living because you are worried about unforeseen events that may never happen 

Unforseen ...

Removal of tax breask and moving to higher taxes on non OO property is pretty much baked in.

 

 

 

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35 minutes ago, happyguy said:

Most who buy on the south coast are cash rich people of all ages as a lot of young buyers are buying in Poole.  Many buy as a get away then when retire sell the bigger house  and move to a less frenetic area by the sea

a lot of people buy when they get an inheritance 

Really?

Got any evidence?

If I was a cashrich OAP id not be buying on the UK's south coast. Its really not that good or sunny.

Older people stopped selling up and moving to the coast ~20 odd years ago.

These days, older pepole stay put and take holidays abroad, out of season. Its cheaper and you are guaranteed sun.

 

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47 minutes ago, happyguy said:

Most who buy on the south coast are cash rich people of all ages as a lot of young buyers are buying in Poole.  Many buy as a get away then when retire sell the bigger house  and move to a less frenetic area by the sea

a lot of people buy when they get an inheritance 

The traffic from Poole to Christchurch is horrendous.

They would moving to a frenetic area.

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19 minutes ago, spyguy said:

Unforseen ...

Removal of tax breask and moving to higher taxes on non OO property is pretty much baked in.

 

 

 

Moral hazard

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  • 259 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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