geisaver
-
Posts
254 -
Joined
-
Last visited
Content Type
Profiles
Forums
Events
Posts posted by geisaver
-
-
Ian Cowie in the Sunday Telegraph reports that the last UK budget contained an obscure change to UK Stamp Duty legislation that will allow reduced payments on bulk purchases of BTL properties. Aviva and others are saying that they intend to become big time BTL landlords to take advantage of this, he says.
Three thoughts:
i) is this yet another attempt to put a floor under house prices;
ii) will it work;
iii) if it doesn't and prices continue to fall what will the likes of Aviva do?
Sorry I don't have a link to the story yet.
Now based on the average value of the properties bought instead of the total amount. Minimum 1%
For Example:
A landlord buying five properties valued at £200,000 each would currently face a tax bill of five percent i.e. £50,000.
Being able to choose to pay SDLT in relation to the average property value means that the one percent rate applies, and therefore the final bill is reduced to £10,000.
-
A link to the Allsops catalogue for the Irish auction
http://legals.auction.co.uk/irish/april2011/catalogue.pdf
It's largely flats.
I assume the houses have sold for a lot more in the past but they don't exactly look cheap do they?
Lot 26 - 400k
Lot 34 - 600k
The prices are reserve prices not to exceed - it will be interesting to see what they actually go for.
-
Who benefits from this? No-one, no-one at all, and the banks and (most importantly) the bondholders and the government and most of the country realise this.
Bankers benefit - £7bn bonuses this year?
We are not Ireland or the US, we never had the massive oversupply (I know it's not just about supply demand etc and all about credit, but it still does have some effects) and new building (which wasn’t keeping up even in the boom years) has practically stopped in the UK now. There is a housing shortage in the UK, there has been for years, this is one of the causes of the high rents.
Isn't about a million empty houses? High rents are the direct result of housing benefit and tax breaks supporting BTL landlords.
The vast majority of people who buy houses in the UK are not investors. They have a simple understanding that you get a mortgage then buy a house, live in the house and then, after ~25 years your house is yours, no landlord, no rent to pay, ever.
The number of properties switching from owner occupied to BTL is increasing every year.
-
At the moment banks seem to be successfully paying 2% to savers and charging borrowers anything between 4% and 20% depending whether they are lending to a mortgagee or a credit card user.
Bank margins at the moment are very high. Base rate could go up quite a bit and banks would not have to raise interest rates. Margins would fall - but they've had a couple of years of high margins now to boost their capital positions.
i.e. steal money from savers
Using interest rates to control inflation caused primarily by rises in global commodity prices will have no affect whatsoever - apart from a minor decrease in commodity prices as the currency rises. (As I said before, saving £10 a week on commodity prices will be more than offset (for most people) by paying £50 a week more on their mortgage ... so - no good to anyone).
most people? I know lots of people who want rates to rise. £10 a week on commodity prices and £50 a week on the mortgage? What if you have something to do with a business currently crippled by fuel prices?
And, of course, if interest rates rise, relatively speaking, in concert around the world - currency relationships will stay broadly the same. So, the only affect of raising interest rates will be to make sure that people have less money to spend. This will depress demand but it won't depress prices - because the price increases are caused by increases in global commodity prices. So we'll end up buying less stuff but at higher prices - which sounds deflationary in terms of jobs and economic activity but not in terms of prices.
lots of countries have higher interest rates than the UK. If interest rates rose like many people I would have more to spend
I think we'll have close to zero base rate for years to come. One of the factors in play these days, as opposed to previous recessions / crises - is that all the developed economies are in the same boat.
From the Daily Telegraph today:
"Three million people would struggle to pay their mortgage if interest rates rose by just 1 per cent, new research has disclosed."
So, raising interest rates by 1% would cause, over a period of time, mass repossessions - a huge drain on the public purse as people have to be housed - and would expose banks' capital positions and force another bank bail out or a collapse of the banking system.
Which is my point - there is simply too much money lent into the housing market now (the boom is 10 years old in my area) for a collapse to be thinkable. Base rates are going to be low for years.
3m? So what? There are more savers than mortgagees and over 60m people. If policy is formed to help a feckless minority you get moral hazard on top of moral hazard. Personally I think all this stuff about people cannot afford mortgages if rates go up is propaganda put about by banks. If people have to pay more on their mortgage they cut down on other spending. Why should they be having meals out on what used to be my savings income?
-
That's a good point : about the EROSION.
But I also think that lenders must be thinking a bit about their customers' ability to make mortgage payments in a higher interest rate environment. They are not going to get bailouts as easily as last time, so if they want to stay alive, they had better mind the store.
Doesn't that make the mistake of thinking that bankers care about anything other than themselves?
Take such as Fred Goodwin, Andy Hornby, etc. They lent to customers who couldn't pay, they bought rubbish - they got massive pay and perks for doing it. What do they care now? They have only profited from what they did. What is there to discourage the bankers now in their jobs from doing the same? They make so much money in such a short space of time they don't have to "stay alive" in the job for long do they?
It seems to me that banks have been blackmailing the government by requesting larger deposits and limiting business loans. If the article I posted on the bankers bonus thread is true about Cameron totally capitulating to the banks then the banks have won and can now lend any amount to anyone - take their massive pay and bonuses then swan off into the sunset when it next goes pear shaped.
http://www.telegraph.co.uk/finance/newsbys...st-lending.html
-
Talking of which, it's the Grand National this weekend.
For all precious Metal affectionados its got to be*:
Silver Birch 66-1
But this horse, despite winning in 2007, is this year only a reserve.
That leaves a tenuous second choice of :
Cerium 50-1
Again a reserve, but very gutsy finishing 5th last year despite collecting a fractured skull in the process.
Cerium is a "soft, silvery, ductile metal which easily oxidizes" (wikipedia)
* Warning - betting is akin to short term trading. It would be embarressing to lose your knickers during the biggest horse run ever.
Silver Birch is a non runner but Cerium got in.
UK House prices: News & Views
in NEWS Commentary, 2021 & Beyond
Posted
This was also in the budget
Tax advantages on tax advantages!