tallim

Chazza posted about it on page 108 of this thread. Conclusion seemed to be that it would just allow bulk buyers access to the market on the same terms as smaller investors. A bank doesn't really want to have to process 50 repo sales one at a time to a bulk buyer, but that's what they would have had to do to be tax efficient.

I think that it could be a great place to retire for UK people. Close to family that stay in the UK, great countryside and coastline, decent infrastructure, educated population. Not sure what health care provision is like, but you could probably get private insurance cover and maybe the EU system integrates health care provision for EU nationals of other countries? I might well get my parents to look closer. They're retired and not making use of the fact that they could live anywhere in the EU, I keep telling them to go rent a little apartment somewhere for 500 euros a month over winter to try all the countries out. They don't have health problems, so it's not a huge risk. Maybe Ireland being so close and English speaking will convince them to try it.

Something funny is going on though. I too read that BBC news story, but I've just checked the LHA Direct website and it's chucking out the 30th percentile rates when you do a rate search. The BBC article reckoned that was October 2011 instead. The VOA site listing the 30th percentile rates that fitkid linked to also seems to indicate that these will apply from April. For me the 30th percentile could have a larger impact than just the initial savings, it could trigger a rent price downward spiral. If you get multiple landlords chasing LHA tenants by dropping prices below the 30th percentile, as the rates are updated each month, each price drop feeds back into the calculation and lowers the 30th percentile rate again. Although the rates will not apply to existing LHA claimants for 9 months or their next review (whichever is earlier) we should start to see the impact on advertised open market prices fairly soon. In my area (Southern Greater Manchester) the biggest shock is going to be on 4 and 5+ bed houses. 4 Bed - £219.23 to £184.62 5+ Bed - £321.92 to £184.62 (4 Bed rate now applies) You know, it feels kind of nice when it appears that the Government is on your side.

Interestingly a few hours before people unpicked the stamp duty median part of the proposals this post appeared on another thread I follow about UK house prices where a large investor mentions in passing the Stamp Duty on large deals (I can't link direct to the quote, but it's the 7th one down by 'groak'); http://www.pistonheads.com/gassing/topic.asp?h=0&f=205&t=919385&mid=0&i=2980&nmt=How+far+will+house+prices+fall%3F+%5BVolume+3%5D&mid=0 It's an interesting thread to follow, the site attracts quite a lot of well to do people so you've got city traders, bankers & lawyers mixed in with business owners. Groak in particular rents out lots of places in and around Glasgow, mainly to Local Housing Allowance recipients. It's likely that blocks of flats like this will be affected by the stamp duty median proposals, maybe not so much 'portfolios' of regular houses. I'm undecided if it affects regular owner occupier housing much as these buyers are looking for much greater returns than local BTLers relying on capital growth and as such will probably pay less than open market owner occupier prices.

If only people's pay and employment prospects would rise in line with RPI, I wish my employer paid me in loaves of bread, petrol and ringtones. Great site below though listing and linking almost all upcoming auctions across the UK, some value showing here, but they're not auctioning average places in decent areas in any numbers yet. http://propertyauctionaction.co.uk/

They must be considered an investment the moment you can't walk away from them at any price. Risk management is not about avoiding risk at all costs, it's about getting the timing and circumstances right so the balance of risk is neutral or in your favour.

And my point is that they wouldn't neccessarily be in a better position, as Meralti noted, based on history it looks like the game might be weighted in average in their favour, but there are plenty of examples of people who are better off for not having done this, particularly in commercial property (HSBC's London building being a great example). http://www.telegraph.co.uk/finance/newsbys...on-market.html# As other people have said, it depends on the income multiple as well as the LTV. I would absolutely agree that a loan for a Lamborghini at 4x your annual salary would be a bad thing, the risk is too high. A loan for a Ford Focus at 0.5x your annual salary would be OK. Luckily no-one gives out stupid multiples for most things, the only time they do is against assets in which they expect some price stability, like houses, which turns them into investments. And all the opposition to that is saying is that you don't know if you can afford it. You're taking a risk that you will not need to sell at the point when you might be too far underwater on your loan. Getting the weighting of risk correct is the key thing, 90% is risky because you almost always overpay when you buy something that goes to the highest bidder, I spotted this great quote on another website today:

This view relies on two things, the second of which is the major flaw, if your case is true they both have exactly the same net assets. 1, Rent is on average equal to or more than repayment mortgage and maintenance 2, That this worthless house is not available to the renter to purchase also for zero money putting them in exactly the same position What could happen based on point 1 is that the rent is on average less than repayment mortgage and maintenance, the renter saves this difference and over 25 years lots of interest is compounded. At the end the buyer has a worthless house and the renter has lots of extra cash.

Link to the full RICS report PDF; http://www.rics.org/site/download_feed.asp...leExtension=PDF I've never read it in detail before, I quite like all the bleating comments at the back that each Surveyor makes;

That is a good question, the answers I could come up with are; + Landlords or second home owners don't receive SMI for places that are not their main residence + People receiving SMI with outstanding balances of more than £200,000 (£100,000 for pensioners) + People receiving SMI with mortgage rates higher than 3.63% + People who the benefit system has not given SMI to for whatever reason (Self-Employed?) + People choosing repossession for strategic reasons (I've no idea if there would be a valid reason to do this?)

Yes http://www.direct.gov.uk/en/MoneyTaxAndBen...ncome/DG_180321 Support for Mortgage Interest, currently paid at 3.63% of the outstanding balance up to £200,000, interest paid is set by Bank of England monthly average mortgage interest rate, I can't find the actual published series they use. If actual interest charged to the recipient is less than 3.63% the difference can be used to pay down mortgage capital. Pays out for up to 2 years if you're on Jobseeker's Allowance. Pays out indefinitely if you're on Income Support, Income-Related Employment and Support Allowance or Pension Credit (limited to £100,000). Description of Income Support and Pension Credit here; http://www.direct.gov.uk/en/MoneyTaxAndBen...ome/DG_10018708 Description of Employment and Support Allowance here; http://www.direct.gov.uk/en/DisabledPeople...t/esa/DG_171894 Potentially interesting snippet for repos/forced sales this year;

Manchester auction, poor quality stock, but some tenanted places with guides giving around 10% gross rental income. Link to catalogue below; http://www.edwardmellor.co.uk/auction/catalogue/ The opportunities are going to be at this end of the market aren't they? Some interesting stuff in Sheffield in this one http://www.markjenkinson.co.uk/auctions/tu...-2011/?start=20

An example of a lower standard of living, I've been following this thread on another website for a few days... http://www.mx5nutz.com/forum/index.php?showtopic=68394 If it's genuine, basically it's a 27 year old support worker on a zero hours contract (not guaranteed work every week) who has ended up with no money saved at the end of each month, mainly because his work does not pay for his fuel or use of car, even though his job is driving people in care around to go shopping, go to the doctors, etc... He wants to move in with a new girlfriend, but needs some cash. He's seriously considering moving out of his 75 quid a week room into a tent in his sister's back garden to save money. It's an extreme example and I'm sure he could rearrange things so he doesn't have to do it, but I'm still a bit shocked and strangely, rather impressed.

The amount of benefits available in the UK is often more than you expect because it is split into many different schemes and is paid to lots more than just those unemployed: http://www.turn2us.org.uk/information__res...z_benefits.aspx The largest areas of spend (2009/2010) excluding state pension (67Bn) are; Tax Credits (22Bn) Housing Allowance (20Bn) Disability Benefits (19Bn) Child Benefit (12Bn) Income Support (8Bn). Job Seekers is quite low down at (3.6Bn). http://www.scribd.com/doc/39553294/Public-...ment-department There are also lots of little areas that don't show clearly as benefit spending; free prescriptions, free use of leisure centres, council tax benefit, maternity payments, etc... as well as private benefits, e.g. subsidized rates for goods and services; http://www.buxtonoperahouse.org.uk/booking/discounts My sister works for an architects firm in London as an administrator on avery good wage (~34k), one of her colleagues with a depedant child in a similar role on similar pay asked to be made redundant as she had calculated that she would have more disposible income if she was unemployed, as well as lots more free time. Then you have the example in this thread of someone earning good money as a Civil Engineer on PAYE and finding out they can have nothing. I think the complexities of the system allow these oddities and hide the true cost. I don't believe any government intended some of the peverse incentives we see, it just got too confusing and people operating is silos made decisions without looking at the overall picture. I see exactly the same problems in large companies, where complex internal allocation of costs creates similar oddities (people being paid for delivering work of little or no benefit) and peverse incentives (decisions which are correct for a particular department balance sheet, but wrong for the bottom line of the company). The UK government has made the right noises about consolidating systems to ease the complexity and allow an end-to-end cost to be seen per individual or family. The struggle, as in companies, is telling people they have unintendedly been paid too much in the past.

It probably means that in certain areas and certain types of housing they are 80-90% of the market. I presume they think that the landlords are the suckers in this game, I might agree with them if they used their leverage properly to set market prices and it wasn't for the fact that a joined up Government could create housing for almost material cost alone. They control planning, so land price is almost nothing, farm land at £4-6k per acre. They could convert unemployed people into employed people for very little incremental cost (£10k on benefits vs. £15k employment net of tax?). It could be a great moneysaver, they do not have to pay market price to provide the service and if they happen to create oversupply, just sell it off and net the profit from the increased value of the land created by allowing the land to be used for residential purposes. Persimmon, Taylor Wimpey, Barratt and the land owners would be spitting feathers, but why should a Government care about that?

Drop in tax receipts is not huge; 2002/2003 - £396Bn 2003/2004 - £422Bn 2004/2005 - £453Bn 2005/2006 - £487Bn 2006/2007 - £519Bn 2007/2008 - £549Bn 2008/2009 - £533Bn 2009/2010 - £520Bn 2010/2011 - £548Bn (Est.) http://www.guardian.co.uk/news/datablog/20...x-receipts-1963 Drop in growth of tax receipts could be considered huge if someone straight-lined the forecast for 2008 onwards based on 2002-2007 though. My estimate would put the structural deficit nearing £100Bn based on slightly inflated tax receipts in period 2004/2005 to 2007/2008, expecting on-trend tax receipts this year to be around £590Bn. I disagreed before when you mentioned that inflation was helping (I assume you mean RPI when mentioning 5%), more expensive petrol, bread or TVs does not always equal equivalent higher tax receipts, it could squeeze the amount of money available to pay tax (as we may see officially recognised if the chancellor gives away some money in April by stopping the planned fuel duty rise). If you're not talking about consumer or retail price inflation though, then I agree that keeping public sector pay inflation below tax receipt inflation is one valid (but very slow) way to reduce the deficit.

Agreed, the undeserving poor are a good side-show, no doubt there are many culpable people in there, but they are chicken feed compared to the real problem. I'll come back to my favourite charts showing UK public spending in 2008/2009 and 2009/2010 by department & programme in nice clear terms; http://image.guardian.co.uk/sys-files/Guar...ding_160909.pdf http://www.scribd.com/doc/39553294/Public-...ment-department If you study it you find it difficult to find anything that stands out as an easy cut to reduce public spending back to match public income (2009/2010 deficit was £160Bn, 24% of spending was funded by debt). The only conclusion I can draw from that is in general the government offers too many services, employing too many people, spending too much money across the whole board, nothing in particular has ballooned to cause this deficit in itself.

Even if every single penny of that estimated £31Bn Fraud and £100Bn Avoidance was somehow collected, the UK would still run an annual deficit of £18Bn based on the latest ONS estimate for net borrowing for 2010/2011. In reality there is no way to collect anywhere near the full amount that is avoided, as it would require wholesale re-writing of tax law without introducing new loop-holes and removing all the 'loop-holes' that are placed in there on purpose to encourage certain types of economic activity. If you then consider that a proportion of the UK's tax intake is from individuals and corporations that have no reason to exist in the UK other than convenience, you will get flight if you start to reduce avoidance and hike rates too much. A prime example of a large company doing that recently is INEOS; http://www.theengineer.co.uk/channels/proc...1001284.article Tax is now a point of global competition, as Dr Bubb said earlier in the thread, and this applies to individuals and companies;

I don't think I agree with you. We're not looking for general inflation or GDP growth to deal with the debt, specifically it needs to be tax receipts. We did have a good January though, UK running a net surplus of £3.7bn, probably due to personal filings and corporation tax, tax receipts can be highly seasonal. http://www.statistics.gov.uk/cci/nugget.asp?id=206 I really hope the chancellor holds his nerve and doesn't start giving cash away. I went to a large private-sector office in the North-West yesterday largely staffed by ex-Public-sector employees where the workforce is largely under UNITE the Union, some of the rubbish they had up on the Union noticeboards was amazing. One of the posters would have you believe that the UK has had higher debt for most of the 20th century and that there's no problem today, see link below; http://www.dontbreakbritain.org/sub_pages/...th_busters.aspx Spin of statistics at it's worst, no mention of interest rates, context of prior debt (WWII, etc...), off-balance sheet liabilities, etc...

I lived there a year and found it an odd place, a bit slow if you're not family focussed. Would have been perfect as a kid, compact enough to walk or cycle everywhere and plenty of open space in the woods and near the river and canals for childhood adventures. Great for spotting exotic cars if you like that kind of thing, I never thought I'd see a Ferrari F40 in the wild. It is a bit rough around the edges though as a Friday night in the Percy Lambert will prove to you!

If push comes to shove there are lots of things society could change it's mind on to avoid complete collapse. GM crops, nuclear power, martial law, rationing, etc... The financial system could collapse overnight, but we would still have all the same people, assets, production, goods, technology, knowledge, etc... All that's really gone is the record of who owes what to who. The knowledge of how to run an economy and setup a financial system still exists and we could knock out a partially functioning system in a matter of days, possibly even one that doesn't have the inbuilt self-destruct mechanism of requiring continuous growth of certain measures to function.

It's abandoned, the car must belong to the estate agent or relatives of the deceased owner. Informal tender is what you do when you want to sell quickly, as you're providing a deadline, but don't think you'll get best value at auction.

That's an interesting link, my own highlights; - The eroded equity hasn't quite sunk in yet, they have the same problems as First Time Buyers which is not enough cash to pay a deposit on their next house, the figures in there estimate that 18% of second-steppers don't have enough equity and savings to put down a 10% deposit on their next home - What he means is that he could afford the interest payments, but can't find a buyer at a price that would provide enough equity to move, so actually he can't afford somewhere bigger - 17% of current second-steppers get help paying their monthly mortgage - Those trying to sell have on average been on the market for 7 months and had just 4 viewings!! - Of these, 44% have turned down offers - Lloyds is offering some products that allow house moves while borrowers are in negative equity, will they really do this? I suppose the LTV% risk may stay the same at e.g. 110%, but does the risk reduce if the borrowers get to move closer to work, so expenses are less and they are more committed to staying in the new house? Do Lloyds get to move them off interest only deals and onto repayment to also reduce their ongoing risk? - First Time Buyers may well step over these potential second-steppers and buy the houses the second-steppers were hoping to move into

I sometimes browse the MoneySavingExpert forums to get a taste of what people in the UK are doing regarding debt and mortgages. The mortgage brokers who post on there are a great indicator of lending standards being applied. At the moment, there's basically no nonsense going on, it's all; minimum 10% deposit (but you'll pay for it on rates), proper checks of documentation, repayment mortgages only, sensible income multiples, etc... I found this thread interesting in particular http://forums.moneysavingexpert.com/showthread.php?t=2992974 It's about a young couple who bought somewhere for £88k in 2006 on a 100% mortgage and now want to leave the UK (possibly back home, it doesn't really say). The poster says Is this an example of someone at the Capitulation stage in the cycle?

It already has in some places, I posted this in the Property forum this morning.