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Housing market

Maybe get a second job at Tescos and a third as an Uber driver if times are tough.

Who needs queues, be part of the solution, not the problem.

What’s the problem / solution? I have a product / service to sell with willing and able customers at commercial terms we are all happy with.
 
Does that 2-3% return include the increase in value of the property?

No, it would be negative right now. In the long term it’s irrelevant because I’m highly unlikely to ever sell. If I do, the govt will take a big chunk of any profit (but not give relief for any loss). If I die, IHT is due. That’s the rules of the game.
 
one needs to make a reasonable profit becuase many houses need expensive repairs or improvements > EPC improvements [ the new bill due 2025 to demand epc C minimum for renting] sometimes these can cost up to 10k which is not available from grants always . central heating systems break down , white goods needs replacing . it can be VERY expensive if you do improvements and repairs . one house has required about 50% of the rent in repairs over 5 months . thats apart from all the other costs . new cooker, new aeriel [ which fell off] new locks to doors , central heating repairs etc etc
 
No, it would be negative right now. In the long term it’s irrelevant because I’m highly unlikely to ever sell. If I do, the govt will take a big chunk of any profit (but not give relief for any loss). If I die, IHT is due. That’s the rules of the game.

yes an new cgt rules are so punitive its probably not worth selling!!
 
I guess they might be even happier if the rent was less so a lot of them didn't need 2 jobs just to make ends meet, wouldn't you say?

Well, one could always sell one of the 2 Porsches if struggling (probably the classic one) or reduce the frequency of exotic holidays. Or move to a cheaper property.
 
No, it would be negative right now. In the long term it’s irrelevant because I’m highly unlikely to ever sell. If I do, the govt will take a big chunk of any profit (but not give relief for any loss). If I die, IHT is due. That’s the rules of the game.
Thanks, so as average property values have risen by between 5 and 10% since forever, apart from some short term blips like 2008 and now, I'd say the business model reflects rather more than 2-3% return on investment. If you were obliged to revalue the properties annually and adjust the balance sheet for the business accordingly, your numbers would look very different. 'Only' 2-3% starts to look like an accounting trick.
 
Thanks, so as average property values have risen by between 5 and 10% since forever, apart from some short term blips like 2008 and now, I'd say the business model reflects rather more than 2-3% return on investment. If you were obliged to revalue the properties annually and adjust the balance sheet for the business accordingly, your numbers would look very different. 'Only' 2-3% starts to look like an accounting trick.

No problem with that as long as the govt allows me to operate under the same accounting rules as a business.

Not much of an accounting trick if the landlord has a mortgage.
 
No problem with that as long as the govt allows me to operate under the same accounting rules as a business.
Well indeed. If it's a business, run it as one, I'd say. My guess would be that the tax losses in the years when property values decline would not offset the gains in all the other years, so overall you'd be paying tax on the uplift in values, less any allowable costs. That seems like a fair business model to me, much like any other capital investment model.
 
Does that 2-3% return include the increase in value of the property?
I don't think you understand how investing works. An investor neither makes a gain nor a loss until that investment has been crystalised by selling. In the meantime we hope to get a return from the profits made by our investments.

Not all properties actually increase in value over time once inflation has been taken into account.

DV
 
Well indeed. If it's a business, run it as one, I'd say. My guess would be that the tax losses in the years when property values decline would not offset the gains in all the other years, so overall you'd be paying tax on the uplift in values, less any allowable costs. That seems like a fair business model to me, much like any other capital investment model.

Yep. The govt currently pick and choose the rules though, allowable interest being a good example. I wouldn’t bother if I had debt, the numbers simply don’t stack up IMHO. The govt also make it unattractive to sell up so we’re only really going to see forced sellers come to market. It’s those damn laws of unintended consequences again.
 
No problem with that as long as the govt allows me to operate under the same accounting rules as a business.

Not much of an accounting trick if the landlord has a mortgage.

yes sadly they dont . be bit of an outcry if local chippie got taxed on his mortgage costs but landlords do [ unless in a company]
 
Nope, it’s always been hard to buy a house. You offer up a lot of criticism but little in the way of viable, workable solutions. What are they?

In 1963 my parents bought the only property they ever owned for £2675, pretty much exactly 5x my Dad's annual income. Mum worked p/t in domestic service for half a crown an hour. Today that property is worth £360-£450k according to Zoopla so an MPs salary would put a new buyer in the right ballpark.
 
In 1963 my parents bought the only property they ever owned for £2675, pretty much exactly 5x my Dad's annual income. Mum worked p/t in domestic service for half a crown an hour. Today that property is worth £360-£450k according to Zoopla so an MPs salary would put a new buyer in the right ballpark.

In an era of low IR’s (yes, they are still low) salary multiplier has become disconnected. What was the mortgage payment as a % of their take home salary? That’s stayed broadly similar over time IIRC.
 
In 1963 Google says a new mortgage would be 6%, a little more than today's 4.75% so probably about the same for my Dad (store manager)then as the proportion of a mortgage payment today in comparison to an MP's salary.
 
In an era of low IR’s (yes, they are still low) salary multiplier has become disconnected. What was the mortgage payment as a % of their take home salary? That’s stayed broadly similar over time IIRC.
Indeed. Until recently the interest rate has hovered around 1% or less in the past 13 years but in '63 it would have been more like 7%. The original ( £2675) price adjusted for inflation is worth around £61K today. To keep the maths simple assume an interest only mortgage 7% of £61K is the same amount as 1% of 427K. This really does show that the ultra low interest rates we have seen has been a big driver in house price inflation.

DV
 
In my view Mr Ponty, I think Mr Flutteringwow doesn’t like you because I suspect you’ve got more money than him. I think that whatever you say you’ll never win.

Not Ad hom against anyone, just an observation from multiple posts on multiple housing and similarly related threads.

Regards,

Rob.
 
In my view Mr Ponty, I think Mr Flutteringwow doesn’t like you because I suspect you’ve got more money than him. I think that whatever you say you’ll never win.

Not Ad hom against anyone, just an observation from multiple posts on multiple housing and similarly related threads.

Regards,

Rob.

An owner occupier in London for some time is quite likely way ahead of me! Maybe they should be subject to an emergency windfall tax bill.
 


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