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Housing market

Chatting to an agent friend who deals in the top end. Sales are falling out of bed. Clients revising budgets from 8M to 6M, that sort of thing. Big hikes in mortgage rates (yes, these folk often borrow lots of money). No question in his mind prices will drop and not insignificantly.
 
Ponty said:
Chatting to an agent friend who deals in the top end. Sales are falling out of bed. Clients revising budgets from 8M to 6M, that sort of thing. Big hikes in mortgage rates (yes, these folk often borrow lots of money). No question in his mind prices will drop and not insignificantly.
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Yes, Interest rates affect EVERYONE. I'm seeing it in top end car prices already...

The mantra of the rich the last 15 years has been "You're crazy to spend your own money".
 
andyoz said:
Yes, Interest rates affect EVERYONE. I'm seeing it in top end car prices already...

The mantra of the rich the last 15 years has been "You're crazy to spend your own money".
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You are crazy to spend your own money (or have been) if you are rich, unless you are lucky enough to have the saod millions in a shoe box under the bed. I know a chap who sold a business for c. £10M. Great. Well done you. The only thing is that he can't pay himself a million without paying 45% tax on most of it, so guess what? He doesn't pay himself, he keeps it in the business, leases expensive items via the business and pays for the lease charges only, pays himself a hefty salary and pays tax on that. He leased a Lamborghini for a year, cost him £3k a month. £36k for the year. So he paid tax on £36K. Not too disastrous. Compare and contrast the tax he'd have to pay on the £200k he would need to buy the thing, and you can see why he leased.
 
stevec67 said:
You are crazy to spend your own money (or have been) if you are rich, unless you are lucky enough to have the saod millions in a shoe box under the bed. I know a chap who sold a business for c. £10M. Great. Well done you. The only thing is that he can't pay himself a million without paying 45% tax on most of it, so guess what? He doesn't pay himself, he keeps it in the business, leases expensive items via the business and pays for the lease charges only, pays himself a hefty salary and pays tax on that. He leased a Lamborghini for a year, cost him £3k a month. £36k for the year. So he paid tax on £36K. Not too disastrous. Compare and contrast the tax he'd have to pay on the £200k he would need to buy the thing, and you can see why he leased.
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Yes, but the non rich have followed their lead unfortunately and some will have gotten themselves into some bother now as things turned so fast..
 
Indeed. Someone with 10 large in a company wrapper might have to pay some tax but they are (presumably) solvent. Very different if you’re in negative equity with a spiralling mortgage, a couple of car leases and your job goes south. Often the marriage goes south as well once the money runs out.
 
flutteringwow said:
Situational greed, fairly typical of most landlords.
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I can’t speak for most landlords and suspect you can’t either. However, as a landlord, I have only today agreed an extension for a tenant. No rent increase sought, didn’t even cross my mind. If they’re a good tenant, I want to keep them and not going to annoy them over a few quid. If they’re a pain in the arse, I won’t renew at any price.
 
If a landlord has a mortgage and interest rates rise, their mortgage repayments go up. Hence increase in rent so they maintain their profit. It is a business after all.
 
venton said:
If a landlord has a mortgage and interest rates rise, their mortgage repayments go up. Hence increase in rent so they maintain their profit. It is a business after all.
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That’s not the way market rents are set. Whether a landlord has an interest only mortgage which trebles at renewal or owns the property outright with no debt, the market rent for the property is the same irrespective.
 
Ponty said:
That’s not the way market rents are set. Whether a landlord has an interest only mortgage which trebles at renewal or owns the property outright with no debt, the market rent for the property is the same irrespective.
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Exactly, it’s not the fault of the renter if the landlord has taken too big a risk.
 
If there's a bigger profit from having the money in a fixed rate bond than renting the house, the landlord will probably sell up. Which squeezes supply and rents go up. Not good for the renters, but they'll insist on a pay rise and so the merry dance goes on.
 
Propping up over leveraged landlords isn't responsibility of the the tenant. If their margins are so tight that they risk going under for the sake of a few % on the interest rate then they shouldn't be a landlord in the first place.
 
venton said:
If there's a bigger profit from having the money in a fixed rate bond than renting the house, the landlord will probably sell up. Which squeezes supply and rents go up. Not good for the renters, but they'll insist on a pay rise and so the merry dance goes on.
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Not really. The transaction costs of buying / selling property mean people don’t tend to make knee jerk reactions for the odd % here or there. It’s a long term investment. Those who can’t bankroll the difficult times shouldn’t be bailed out by overcharging tenants.
 
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