Now Theres Vat On The Hips Packs

[eurows]

The chancellor has announced that their will be 17.5% vat to pay on the HIP packs. Taking the cost above £800.00.

Home owners screwed again

[Time to raise the rents.]

Oh the pain......make it stop.....please......

[Bingley Bloke]

Home owners screwed again

Buyers screwed again methinks... Won't the sellers just put their asking prices up to try to recoup the cost?

[FreeFall]

Buyers screwed again methinks... Won't the sellers just put their asking prices up to try to recoup the cost?

Possibly, but then again the buyers don't have to pay for it....think of a low offer, subtract 1200 quid, make offer.

[Time to raise the rents.]

Possibly, but then again the buyers don't have to pay for it....think of a low offer, subtract 1200 quid, make offer.

Mmm, think of price inflated to include cost.

[Cornwall Sceptic]

The chancellor has announced that their will be 17.5% vat to pay on the HIP packs. Taking the cost above £800.00.

Home owners screwed again

I'm surprised he isn't think about putting VAT on stamp duty as well - desperate moves from a desperate cash strapped governement

[Time to raise the rents.]

I'm surprised he isn't think about putting VAT on stamp duty as well - desperate moves from a desperate cash strapped governement

All to spend on key-worker salaries so they can return & spend it on housing.

The game goes on.

[Boughtin95]

The chancellor has announced that their will be 17.5% vat to pay on the HIP packs. Taking the cost above £800.00.

Home owners screwed again

I hate to say it but I think you're partially wrong on this one, I suspect this will also effect buyers quite badly.

Isn't this just another ploy by GB to keep house prices inflated?

Think about it, this will reduce the number of sellers, people who don't NEED to move will now stay put.

Granted, it will reduce the number of speculative entries onto the market but it will also reduce the number of properties available to buyers, this is where the law of supply and demand will kick in.

Doesn't fewer properties + same number of prospective buyers = higher prices?

I think this another move by GB to keep his Miracle Economy going for at least another couple of years, smoothing his path to his ultimate goal: No 10.

I don't think anyone will come out of this as a winner, it just raises costs all round and produces more tax revenue for the Government.

Just for the record, I'm still a bear.

[BillyShears]

Buyers screwed again methinks... Won't the sellers just put their asking prices up to try to recoup the cost?

Providing they can get someone to pay the increased price. Sort of like TTRTR and his assumption that rents can just rise to cover any amount of increased costs, if the buyers were prepared to pay more than they are now, wouldn't sellers already have put their prices up to get more profit?

From what many have described about price changes, housing in some cases operates like a Dutch auction. The house is put on the market at some inflated price, and keeps dropping until someone buys it, or it is withdrawn. Why would HIPs make someone more likely to buy at an increased price?

As far as I'm aware, what caused the crash they had in Shanghai was legislation introduced to restrict flipping. Will HIPs lead to a reduction in flipping? What will that do?

Billy Shears

[delboypass]

how can they be cash strapped if they are giving 8.5 billion to 3rd world countries for their education even though the education system is a mess right here

[laurejon]

I think HIP is a superb idea, and putting VAT on is even better.

It is estimated that by 2009 28.5% of the working population will be employed in the HIP business and the further business it generates.

More lawyers will be needed to prosecute on behalf of the crown, baliffs to seize goods, and more riot police to carry out the dawn raids on those who have incorrectly filled in the forms. Currently there is a huge prison building project underway and the Government are currently giving early releases to the less dangerous members of society such as rapists, and murderers to free up places for the anticipated HIP franternity carrying out fraudulent actions by incorrectly filling in the forms.

[BillyShears]

I hate to say it but I think you're partially wrong on this one, I suspect this will also effect buyers quite badly.

Isn't this just another ploy by GB to keep house prices inflated?

Think about it, this will reduce the number of sellers, people who don't NEED to move will now stay put.

Granted, it will reduce the number of speculative entries onto the market but it will also reduce the number of properties available to buyers, this is where the law of supply and demand will kick in.

Doesn't fewer properties + same number of prospective buyers = higher prices?

I think this another move by GB to keep his Miracle Economy going for at least another couple of years, smoothing his path to his ultimate goal: No 10.

I don't think anyone will come out of this as a winner, it just raises costs all round and produces more tax revenue for the Government.

Just for the record, I'm still a bear.

Depends why people are moving. If we take the stereotypical model of why people move house, we get people generally moving up the so-called ladder for a bigger house, some moving sideways when they move to a different city for a new job, and similar. We get people downsizing when they no longer need such a big house. Or nowdays we might say "to realise profits". People selling investment properties. Then we get houses freed up because their owners have died or moved into care in care homes/infirmaries/in with their children.

So, what happens with HIPs?

People moving city for a new job. If they don't sell their house, what do they do? Rent it out? Not a very good investment at today's returns is it. Unlikely to change much methinks.

People moving up the ladder. OK, there is likely to be a difference here. But, if these people are not selling their first or low-rung properties, what happens to the market for more expensive properties? A shortage of buyers leading to price reductions? That then reduces the space between the rungs which will then encourage people to move up. A new balance should be found.

People downsizing. Again there could be an effect. But if there were fewer people moving up due to HIPs, then prices at the top end may go down even faster than they are now. In that case, people may perceive that the market has topped out, and then be more inclined to realise their profits now rather than later.

People dying or moving into care. HIPs are very unlikely to increase lifespan or health.

People selling investment properties. Unless HIPs are a temporary measure, what would be the point of holding on to a property that they will have to sell under the same regime at a later time.

HIPs will effectively take some money out of the market with an additional cost of £1000 or so (by the time it's all finished). But why do people assume this money will come from FTBs and buyers? So what if sellers put their prices up? Who cares whether some seller puts their grotty 2 bed terrace on the market at £152K instead of £150K, if it's never going to sell for more than 130K anyhow? And if the sellers decide that because of the HIP they won't sell at less than £135K instead of £134K, then they'll end up swallowing the HIP cost.

The truth is that if HIPs take money out of the market, then it must come from somewhere. But why shouldn't that money come from over-inflated house prices rather than FTBs? Someone moving up the ladder can cover the cost if their next property is cheaper. People at the top of the ladder would then end up eating the costs, but with their realising hundreds of thousands of pounds of profit, they can easily afford it. And if buyers for top of the ladder properties dry up because those further down the ladder are going to stay put, then prices for these properties will start going down.

My prediction for HIPs is that the sort term effect they have on the market will be completely different from the long-term effect. The short term effect will be due to primary local effects on individuals who see an increased cost. The true effect will be secondary or tertiary effects on the equilibrium of the housing market as a whole. Concentrating just on primary effects is going to be very misleading.

Billy Shears

[karen1000]

Possibly, but then again the buyers don't have to pay for it....think of a low offer, subtract 1200 quid, make offer.

Get your house valued, add 5-10 grand, then "slash your price" when you're ready.

[Cornwall Sceptic]

how can they be cash strapped if they are giving 8.5 billion to 3rd world countries for their education even though the education system is a mess right here

I'm sure you have seen this one

http://www.housepricecrash.co.uk/forum/ind...27051&hl=donkey

perhaps Crash Gordon is modelling himself on Robin Hood in the giving of foriegn aid

[Time to raise the rents.]

I think HIP is a superb idea, and putting VAT on is even better.

It is estimated that by 2009 28.5% of the working population will be employed in the HIP business and the further business it generates.

More lawyers will be needed to prosecute on behalf of the crown, baliffs to seize goods, and more riot police to carry out the dawn raids on those who have incorrectly filled in the forms. Currently there is a huge prison building project underway and the Government are currently giving early releases to the less dangerous members of society such as rapists, and murderers to free up places for the anticipated HIP franternity carrying out fraudulent actions by incorrectly filling in the forms.

Did you know that tax dodgers in Sweden are treated worse than murderers?

[nodumsunreader]

The chancellor has announced that their will be 17.5% vat to pay on the HIP packs. Taking the cost above £800.00.

Home owners screwed again

Time to raise those asking prices. Another 0.5% on HP's from next June.

[CommonSense]

Buyers screwed again methinks... Won't the sellers just put their asking prices up to try to recoup the cost?

The greed driven seller can ask whatever they like and the buyer can agree to that price, and at the last minute gazunder to whatever price the buyer wants. If that fails then the buyer just moves on to the next property. Eventually there is bound to be someone who has no option but to sell.

The buyer can treat it as a sport like fishing. Eventually the agent will get annoyed but they still legally have to pass on every offer.

[BillyShears]

I think everyone's trying to figure out what will happen by considering indivdual purchasers with one buyer, one seller, and no other property in the chain. What happens with HIPs when there is a chain, with properties at different price points and people with different motivations for buying/selling?

Billy Shears

[*sparkle*]

The greed driven seller can ask whatever they like and the buyer can agree to that price, and at the last minute gazunder to whatever price the buyer wants. If that fails then the buyer just moves on to the next property. Eventually there is bound to be someone who has no option but to sell.

The buyer can treat it as a sport like fishing. Eventually the agent will get annoyed but they still legally have to pass on every offer.

Won't that cost the buyer quite a lot in survey fees and solicitors fees

[MarkG]

Won't that cost the buyer quite a lot in survey fees and solicitors fees

The whole point of the HIPS packs is that the _seller_ pays most of those fees.

[sprouty76]

The whole point of the HIPS packs is that the _seller_ pays most of those fees.

And even if the seller passes the cost onto the buyer, it's only the successful buyer who will have to pay for it.

[frugalista]

Buyers screwed again methinks... Won't the sellers just put their asking prices up to try to recoup the cost?

It's a classic "prisoner's dilemma". If *all* sellers put their prices up then they will be fine and the buyers will be screwed. But if you are a seller and your neighbour seller can afford not to pass on the cost then they will undercut you and you will be forced to either take the hit or risk failing to sell.

frugalista

[erd]

Get your house valued, add 5-10 grand, then "slash your price" when you're ready.

You only pass on the price of the pack if you sell your house. Put it on at too high a price and you would have paid the money for nothing.

[Guest]

I think HIP is a superb idea, and putting VAT on is even better.

It is estimated that by 2009 28.5% of the working population will be employed in the HIP business and the further business it generates.

More lawyers will be needed to prosecute on behalf of the crown, baliffs to seize goods, and more riot police to carry out the dawn raids on those who have incorrectly filled in the forms. Currently there is a huge prison building project underway and the Government are currently giving early releases to the less dangerous members of society such as rapists, and murderers to free up places for the anticipated HIP franternity carrying out fraudulent actions by incorrectly filling in the forms.

Top form as usual

Also:

£800 / £180,000 = 0.4%

Statistical noise.

Move along people, nothing to see here.

Like I said before, pre-HIPs, anyone not 100% serious about actually selling would have hung on for the top price forever anyway, so wouldn't have set market prices, as they would never have transacted. The supply argument doesn't wash for this reason.