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Stamp Duty Holiday - Price Increases


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Everyone has to do it to work......any buyer knows what to avoid and what's worth considering......increasing the price is pricing themselves out of the market...... plenty of fish in the sea.;)

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2 hours ago, winkie said:

Everyone has to do it to work......any buyer knows what to avoid and what's worth considering......increasing the price is pricing themselves out of the market...... plenty of fish in the sea.;)

I ain’t no ‘Bull’ in this market but it’s gone a bit mad round me too. Irrational and frustrating for my lad who wants to buy but not at these prices. He is asking me why are people paying so much when a second wave of C19 could be round the corner.....we guess it’s because rates are low, stamp duty has gone and people believe they are financially indestructible. 

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25 minutes ago, Pop321 said:

I ain’t no ‘Bull’ in this market but it’s gone a bit mad round me too. Irrational and frustrating for my lad who wants to buy but not at these prices. He is asking me why are people paying so much when a second wave of C19 could be round the corner.....we guess it’s because rates are low, stamp duty has gone and people believe they are financially indestructible. 

Is the second wave that was coming after people went to the beaches? The black lives matter protests? Or pubs re opening? 

 

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26 minutes ago, captainb said:

Is the second wave that was coming after people went to the beaches? The black lives matter protests? Or pubs re opening? 

 

Good point?

I did say ‘Could’ be round the corner. Not ‘is’ around the corner.? 

Just feels like a strange time to be plunging into the property market. Okay, prices may continue to rise a little but feels like the downside is potentially a lot more material than any upside. 

Stock market feels similar (to me) but at least you can get out of the stock market with the click of a button. 

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56 minutes ago, captainb said:

Is the second wave that was coming after people went to the beaches? The black lives matter protests? Or pubs re opening? 

 

Given the virus spreads in clusters, predominantly indoors, the first two of those were never going to have an effect despite what the media was going on about. The pubs reopened 16 days ago so it's too early to see the effect of this, and it depends on how many people are actually going to them. 

Given that other countries are now seeing a resurgence (eg Spain), a second wave is probably inevitable,  it just remains to be seen how big it is.

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You will hear generically about people struggling in the media, you will rarely hear about the winners. For the last decade somebody renting on stagnant low wage has done very badly. Somebody better off, with a large mortgage, even with minimal pay rise, has been a net winner due to ultra low rates. Highlighting would this cause social tension. 

This second crisis is the same. The same group will/has had money thrown at them. And they are not necessarily the ones who need help. Just think about it, we have a crisis that has led to people losing their jobs and more could follow. Does a tax cut for people with the means to buy property that will go into the pocket of those with an already inflated asset channel money to where it is needed? Nobody challenges this. The young in particular has been shafted yet again. 

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1 hour ago, ForGreatLager... said:

@Pop321 Honest question; this is not a veiled dig at you.

I seem to remember you were/are a portfolio landlord. Do you feel any responsibility for your son’s predicament? 

Yep. 

I wouldn’t describe the property I own as ‘portfolio’ but I do own properties which I developed. I held some to avoid multiple sales in a year, spread the work activity and it did mitigate CGT, and I currently let them out. When they fall empty I intend to sell. 

The houses I bought generally had structural issues or the works required meant these were only available to cash buyers. So whilst I may not have directly competed for properties (and the prices I paid make that abundantly clear) it all still adds to the problem and the overall demand. Ie if I hadn’t bought them and sellers had to give them away then more supply. 

Every piece of legislation eg electrical, section 24 etc which BTL’ers moan about I welcome. Need to resolve the current position and I don’t advocate my position to myself or others. 

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2 hours ago, captainb said:

Is the second wave that was coming after people went to the beaches? The black lives matter protests? Or pubs re opening? 

 

Second wave or not, the damage is done now. The domino to knock all the others has fallen, redundancies going through the roof and habits forever changed, we are just waiting for it to come through now.

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2 hours ago, captainb said:

Is the second wave that was coming after people went to the beaches? The black lives matter protests? Or pubs re opening? 

 

As those events are mainly outside the chances of transmission are fairly low particularly at this time of year as it is now believed by some scientists, some at Oxford Uni for one,  that part of the reason for the first wave infection and mortality rates decreasing is higher temperatures and summer humidity levels. This is why a winter second wave could be on the cards as virus is lot more transmissible and virulent (deadly) in winter temperatures and humidity. If we don't get vaccine by autumn for mass deployment a second wave really could be on cards, particularly as they don't want to lockdown again and people will be indoors a lot more.  

Edited by petetong
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16 minutes ago, Pop321 said:

Yep. 
 

Thanks for replying. I just wondered if you or anyone ever thought about the knock-on effects on their own family when they bought multiple properties. I’ve asked similar questions to friends who’ve bought several houses and they just go blank. No one’s ever really answered; it’s quite bizarre. It’s as if they need to take themselves off and have a moment or something. One young lad at a party once was bemoaning being priced out, but then mentioned that his Dad owned seven housed he rented out. When I spelled out the obvious to him, it seemed it was too much for him to comprehend. 

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5 hours ago, Pop321 said:

I ain’t no ‘Bull’ in this market but it’s gone a bit mad round me too. Irrational and frustrating for my lad who wants to buy but not at these prices. He is asking me why are people paying so much when a second wave of C19 could be round the corner.....we guess it’s because rates are low, stamp duty has gone and people believe they are financially indestructible. 

20 years ago an acquaintance told me they bought two BTL first time buyer style properties as investments for their two sons who were still at school......your guess is a good guess......time limit on SD helps get people to do, rather than continue to think about doing one day in the future, they think that the debt, high loan to value against homes is too big to fail.......that is not to say it will be a good investment if buying now, but if in a position to buy a home to live in, or in the case of SD planning on moving now is as good as time as any....a long-term commitment, not easy money.

5 hours ago, captainb said:

Is the second wave that was coming after people went to the beaches? The black lives matter protests? Or pubs re opening? 

 

Beaches are outside, protests are outside, pubs at the moment mostly happening outside, only recently opened.......still fine weather.....second wave if there is one will be local from a place inside.?

Edited by winkie
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6 hours ago, ForGreatLager... said:

Thanks for replying. I just wondered if you or anyone ever thought about the knock-on effects on their own family when they bought multiple properties. I’ve asked similar questions to friends who’ve bought several houses and they just go blank. No one’s ever really answered; it’s quite bizarre. It’s as if they need to take themselves off and have a moment or something. One young lad at a party once was bemoaning being priced out, but then mentioned that his Dad owned seven housed he rented out. When I spelled out the obvious to him, it seemed it was too much for him to comprehend. 

It was section 24 and 118 Website that did It for me. The 118 discussion about S24 and their entitlement and comparison to landlords being persecuted to ‘that of the Jews in the holocaust‘ I saw what a horrid and inconsiderate group of people they were. When people spoke of interest payments of £40k and rent collected of £60k I couldn’t understand why they were so upset.....then I realised they weren’t talking annually but monthly. 

I had an exit plan before I bought but many have no exit plan even now. They are wrapped up in CGT and debt (equity withdrawal) with no way out and that’s not even a real business model. They have done well with rates being so low yet I bet they still are not paying down debt but spending all their pennies on lifestyles funded by others and still feeling entitled. 

I am not much better but I financially knew what I was doing, respected debt and never felt I was entitled to do it. 

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12 hours ago, Pop321 said:

He is asking me why are people paying so much when a second wave of C19 could be round the corner..

Because they want somewhere to live and do not want to pay rent.  One assumes that they are not bothered if prices go up or down they do not see a home as a financial investment.  

10 hours ago, nothernsoul said:

You will hear generically about people struggling in the media, you will rarely hear about the winners

Yes good stories do not sell papers of make people read the news on the BBC website

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(I will not write 'properties have been put on the market's for reasons of it sounding utterly stomach churning)

Where I am, two houses have just gone up for sale for £100-125k more than they would have been marketed for pre-pandemic. They would have been 450-475 and the agent just put them both on at 575k. 

it's really becoming sickening to see how little thought seems to be given to 6 figure sums if they can just slap it on and say 'thats the new level round here'.

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4 minutes ago, Frugal Git said:

(I will not write 'properties have been put on the market's for reasons of it sounding utterly stomach churning)

Where I am, two houses have just gone up for sale for £100-125k more than they would have been marketed for pre-pandemic. They would have been 450-475 and the agent just put them both on at 575k. 

it's really becoming sickening to see how little thought seems to be given to 6 figure sums if they can just slap it on and say 'thats the new level round here'.

Do they really think there is still plenty of foreign money available to keep prices high and rising....peak debt and peak money importation.;)

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15 minutes ago, winkie said:

Do they really think there is still plenty of foreign money available to keep prices high and rising....peak debt and peak money importation.;)

Indeed. And this isn't prime central London; it's a commuter town near Cambridge so the main foreign imports are European/Asian software engineers who inexplicably choose a crappy UK salary (120k if you're the creme de la creme) over the bay area ($350k if you're capable of writing a for loop - I ask every single one of them what on earth they were thinking?).

Edited by Frugal Git
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4 hours ago, Pop321 said:

They are wrapped up in CGT and debt (equity withdrawal) with no way out and that’s not even a real business model. They have done well with rates being so low yet I bet they still are not paying down debt but spending all their pennies on lifestyles funded by others and still feeling entitled. 

That's my take on it too, Pop, you have been running a business, with all the ups and downs that entails. I don't like the business you are in, but that is immaterial and I can still respect your choices and approach to that business.

The spivs and chancers have profited, not because they were cleverer than anyone else, but because of a unique set of circumstances that for a long time worked in their favour. Those circumstances are changing and from their point of view that is very bad indeed.

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2 hours ago, Frugal Git said:

(I will not write 'properties have been put on the market's for reasons of it sounding utterly stomach churning)

Where I am, two houses have just gone up for sale for £100-125k more than they would have been marketed for pre-pandemic. They would have been 450-475 and the agent just put them both on at 575k. 

it's really becoming sickening to see how little thought seems to be given to 6 figure sums if they can just slap it on and say 'thats the new level round here'.

I’ve noticed there’s a bit of a thing when it comes to figures: an initial sharp increase in price/deaths/debt catches everyone’s attention to begin with, but as the numbers increase as time goes on, the outrage seems to wear off and the figures are just accepted. Look at our national debt, the Coronavirus deaths, the price of petrol, beer, etc. 

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On 21/07/2020 at 20:46, Pop321 said:

He is asking me why are people paying so much when a second wave of C19 could be round the corner.....we guess it’s because rates are low, stamp duty has gone and people believe they are financially indestructible. 

22 hours ago, richmondtw said:

Because they want somewhere to live and do not want to pay rent.  One assumes that they are not bothered if prices go up or down they do not see a home as a financial investment.  

Yes good stories do not sell papers of make people read the news on the BBC website

Spot on. He was buying a bicycle too so (because it’s not a financial investment) I sold him mine for £250k.....only cost me £80. 

We are past wanting ‘somewhere to live’ and ‘financial investment’ because when a modest house is 8 times your strong income then something is wrong and it represents relative terrible value for money. 

I see some awful purchases made at the moment (Past month) where values are inflated by new builds or a ‘farrow and ball’ makeover and people ‘wanting somewhere to live and telling themselves it not a financial investment’ are buying. It isn’t an investment but that doesn’t mean an extra £50k here and there doesn’t matter. 

I would be very very wary buying anything whilst this ‘mini boom’ fuelled by 3000 year low interest rates and stamp duty holidays is happening.

I have been through many boom and busts in the property market and this market is wobbly. I know several EA and they are saying the same and they know they are full of self contradictions...One said “strange market....things are selling but the market doesn’t feel good”.

Off market ie those sales I see between investors the market is awful. One guy has sold 2 flats for around 70% of their ‘retail’ price. Normally it would be 90%. 

When things are unsettled and bank shares tumble first reaction is ‘houses are safe....it’s a real asset’ and they rally for a while. Eg 2007.  After the lag they then follow the economy and if you hadn’t noticed the economic outlook isn’t great right now. 

Anyone stretching themselves and buying it this unsettled buoyant market with other indicators suggesting a fall could easily be round the corner needs a talking too. Hold fire....at least until Feb next year. 

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  • 419 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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