drbubb Posted August 11, 2009 Report Share Posted August 11, 2009 It's a buyer's market in Las Vegas, and his wife can buy at a 50% discount to what they paid the first time around. Interest rates have fallen... so they'll have lower monthly payments. And to top it all off, the government is offering an $8,000 tax credit to first-time homebuyers who buy a home before December 1, 2009. By defaulting on his loan, he'll save himself over a hundred thousand dollars... and still own a home. "Everyone's doing it," says my friend. "I know three other people who are doing [strategic defaults] too," he says. "They're buying bigger houses with lower monthly payments. And that's just from my work..." Stupid lenders ... should have been more prudent, especially in an extreme bubble market like Vehas Link to comment Share on other sites More sharing options...
GTG Posted August 11, 2009 Report Share Posted August 11, 2009 Don’t forget Capital Gains Tax. You might need to move into it for a while before selling. Not necessary, the chargeable gain of 18% should be covered by my CGT annual allowance of £10,500, god knows what the rate will be after the UK general election next year. My other capital gains have been inside my S&S ISA, spread betting accounts and SIPP. Thanks anyway. I don't think you have to move in, you just declare it your main residence. Perhaps there is an MP who visits these forums and can advise? LOL.... I think ziknik is referring to the 3 year rule whereby if you move in and make the second home your PPR (principal place of residence) you can disallow the capital gain in the preceeding three years. It is commonly perceived that by moving in you can avoid paying any capital gains tax at all as the second home becomes your PPR and therefore exempt. One has also got to be mindful of once the move is made or the election of a PPR is made the capital gains tax clock starts to tick on the once PPR. An election of a second property can be made at any time but is only valid from the date of the election for the calculation of CGT except in the first three years following the acquisition of the second property when you have this period in which to decide and your decision is applied retrospectively. That's my understanding of the rules anyway. Think I may run for a seat in the next general election Link to comment Share on other sites More sharing options...
drbubb Posted August 12, 2009 Report Share Posted August 12, 2009 An attack on Property wealth coming? http://www.libdemsalter.org.uk/lvt-equality-rev1.pdf Politically, I think it might prove popular, especially since it was House Price Inflation which was to blame for many of the UK's present troubles. This threat, plus the second bubble in property, are two good reasons to sell, if you need them Link to comment Share on other sites More sharing options...
InternationalRockSuperstar Posted August 12, 2009 Report Share Posted August 12, 2009 http://www.telegraph.co.uk/finance/finance...-recession.html Households take in lodgers to beat recession Families are taking in an extra 500,000 lodgers amid the recession to help meet their mortgage costs. ... Figures indicate numbers have risen to a total of almost one million in the past year as borrowers struggle to pay off their debts. ... The most popular age to take in a lodger is 25 to 34 years old, with this age group making up a third of all new live in landlords ... It is not an overstatement to say, that for many homeowners, the extra income from renting out a spare room to a lodger, could be the difference between keeping or losing their homes ... Link to comment Share on other sites More sharing options...
nicejim Posted August 12, 2009 Report Share Posted August 12, 2009 http://www.telegraph.co.uk/finance/finance...-recession.html The bulls are now adding 500,000 to their "pent-up demand" models and recalculating... Link to comment Share on other sites More sharing options...
id5 Posted August 12, 2009 Report Share Posted August 12, 2009 An attack on Property wealth coming? ... This threat, plus the second bubble in property, are two good reasons to sell, if you need them There is this sentence that confirms to me where the Liberal Party intend to get the money to pay the UK debt should they have the opportunity as property is such an easy target 'Such property wealth is an excellent indicator of overall wealth, and is especially easy to identify: land cannot be moved or taken offshore, unlike financial assets.' It will drive down house prices as associated taxes, such as Council Tax, increased across all percentiles and not just the top 5%. I dislike the graphs in the article regarding income as I think that they are misleading. The data comes from individual's earnings but mainly families purchase houses. Families often have one good wage earner and one poor wage earner, occasionally one with a one very good and one poor, most have two average earners. This type of tax should be family based not individual, it would be fairer and help to promote family values. Link to comment Share on other sites More sharing options...
drbubb Posted August 12, 2009 Report Share Posted August 12, 2009 An attack on Property wealth coming? The coming JUMP in UK property taxes ============================ ( from a thread on GEI ) An attack on Property wealth coming? / and a clone thread on HPC http://www.libdemsalter.org.uk/lvt-equality-rev1.pdf Politically, I think it might prove popular, especially since it was House Price Inflation which was to blame for many of the UK's present troubles. This threat, plus the second bubble in property, are two good reasons to sell, if you need them There is this sentence that confirms to me where the Liberal Party intend to get the money to pay the UK debt should they have the opportunity as property is such an easy target 'Such property wealth is an excellent indicator of overall wealth, and is especially easy to identify: land cannot be moved or taken offshore, unlike financial assets.' It will drive down house prices as associated taxes, such as Council Tax, increased across all percentiles and not just the top 5%. I dislike the graphs in the article regarding income as I think that they are misleading. The data comes from individual's earnings but mainly families purchase houses. Families often have one good wage earner and one poor wage earner, occasionally one with a one very good and one poor, most have two average earners. This type of tax should be family based not individual, it would be fairer and help to promote family values. Do you think this is unfair? The only unfair thing is HOW the money has been spent. But, of course, the SOLUTION must come from taxing property more heavily. Do you see any other choice? If you want to own property, you better buy it in a country with low debt, and sensible spending. This would not be the UK, or the US either ! Link to comment Share on other sites More sharing options...
G0ldfinger Posted August 12, 2009 Author Report Share Posted August 12, 2009 An attack on Property wealth coming? ... Maybe some forced house selling at fixed prices or some outright house confiscation will happen! Link to comment Share on other sites More sharing options...
drbubb Posted August 12, 2009 Report Share Posted August 12, 2009 Maybe some forced house selling at fixed prices or some outright house confiscation will happen! Whomever owns the property, they can expect to pay more tax! The government is too hungry for revenues not to try this, and if done wisely, it might be the BEST way to tax, especially if they can cut income tax if they tax it wisely To avoid a big tax: Downsize, and live more frugally ! Keep your wealth in "portable form", and do not have a big carbon or housing footprint. Link to comment Share on other sites More sharing options...
romans holiday Posted August 12, 2009 Report Share Posted August 12, 2009 Meanwhile in NZ the government is getting nervous about a newly levitating housing market. It is no exaggeration that in NZ, housing was the only thing you "invested" in. Besides a hopeless stockmarket, what helped to spur the speculation on was a lack of capital gains tax. The NZ economy is looking shaky at best and the govt now are thinking of finally introducing this tax to dampen down the housing market... and no doubt to help fund the country. Higher taxes are coming. http://www.nzherald.co.nz/business/news/ar...jectid=10590321 A premature housing boom would not be good for the economy and the Government will consider ideas, possibly a capital gains tax, to avoid one, Finance Minister Bill English says. == "In the long run the economy needs to shift away from spending and borrowing on housing to more exporting. The signs at the moment are that it's not making the shift that we would want to see, so we need to look at whether there's any policy mix that might make the right shift." == It would be a pretty hard job to persuade us to make significant change to the current system but clearly there are some lessons from our last economic boom that we don't want to repeat." The case for change would have to be strong because the Government could not afford tax cuts. "We can only look at the mix of taxes and simplifying taxes and changing the mix. To do anything significant you'd need a pretty strong case for change and we haven't seen that yet." Link to comment Share on other sites More sharing options...
id5 Posted August 12, 2009 Report Share Posted August 12, 2009 An attack on Property wealth coming? ... Do you think this is unfair? The only unfair thing is HOW the money has been spent. But, of course, the SOLUTION must come from taxing property more heavily. Do you see any other choice? If you want to own property, you better buy it in a country with low debt, and sensible spending. This would not be the UK, or the US either ! Do I think it is unfair? I do at a local tax level where you pay for your services depending on the value of the property that you live in not for the services that you consume. The problem with this type of taxing property is that it taxes un-earned wealth, wealth that does not exist. Tax sales and purchases but not un-earned wealth, you might as well start taxing future earnings as well, rather like the film Minority Report but for money rather than crime. Do I want to own property? After nearly a decade of renting, my answer would be 'Not unless I am to retire into it, otherwise I will only purchase to rent to others when it becomes a financially sound investment' Do I see another choice? Not with today's politicians, personally I would do away with the majority of taxes, have a single flat income tax for all, and then increase VAT on purchases. You buy a bigger house, car, you consume more services, etc, you pay more. You buy less, use public transport, produce less waste you, etc, you pay less. Link to comment Share on other sites More sharing options...
TrueNorth Posted August 14, 2009 Report Share Posted August 14, 2009 Foreclosure wave gets bigger There is no second foreclosure wave coming, says Sam Khater, senior economist, First American CoreLogic. “To say there is a second wave implies the (current) wave has receded,” Khater told me. “I don’t see that the wave has receded.” Khater shared his historical data of 90-day delinquency rates for Orange County, as well as the foreclosure-in-process rates and rates of REOs, or foreclosures on banks’ books. The 90-day rate includes all outstanding first mortgages at least three months late but not yet foreclosed. The foreclosure rate is just first mortgages with a notice of default or trustee’s sale filing. (Previously the person who distributes the report for First American told me the two rates did not overlap, but Khater, who compiles the data, said they do.) If you look at the 90-day rate it has been heading straight up — it has not receded. . . . . Link to comment Share on other sites More sharing options...
G0ldfinger Posted August 14, 2009 Author Report Share Posted August 14, 2009 Foreclosure wave gets bigger It's more like a Tsunami. Link to comment Share on other sites More sharing options...
drbubb Posted August 14, 2009 Report Share Posted August 14, 2009 Do I think it is unfair? I do at a local tax level where you pay for your services depending on the value of the property that you live in not for the services that you consume. The problem with this type of taxing property is that it taxes un-earned wealth, wealth that does not exist. ?? Wealth taxes exist in Sweden. I would rather tax property wealth than income, but the vested interests would fight that Link to comment Share on other sites More sharing options...
meow Posted August 14, 2009 Report Share Posted August 14, 2009 Weird, I just clicked through a couple of graphs off of Goldfinger's sig. And I found this one which seems interesting... http://gold.approximity.com/HP_UK_in_gold_1973.PNG It's almost as if it's closley mirroring the price graph in GBP but 2 years ahead, in which case the dead cat in the GBP graph would land at the end of Q4 09 and then plummet nearly 50%. Hmm... Or am I just reading it wrong / mad.... ? Link to comment Share on other sites More sharing options...
Mr Pipples Posted August 14, 2009 Report Share Posted August 14, 2009 UK housing market, the untold story - http://ftalphaville.ft.com/blog/2009/08/14...e-untold-story/ Link to comment Share on other sites More sharing options...
Member100 Posted August 14, 2009 Report Share Posted August 14, 2009 UK housing market, the untold story - http://ftalphaville.ft.com/blog/2009/08/14...e-untold-story/ Interesting article. Boulger seems to worry about those who cannot move, because either: .. They have negative equity, or .. They have only 0-15% equity in their homes (not enough to get new loans), or .. They rely on self-cert mortgages, which are not now available He says, their only way out of the trap is: = To see house prices rise, or = To sell out and rent My comment: They CHOSE their trap, and so they should sleep in it!, to coin a phrase. What about those who cannot move (into a home they own) unless prices fall ?? Link to comment Share on other sites More sharing options...
drbubb Posted August 15, 2009 Report Share Posted August 15, 2009 JUSTICE ? Mortgage lenders turn backs on those in ‘risky’ businesses Mortgage lenders are routinely blacklisting buyers according to their occupations, with applications from workers in property and finance at the top of the reject pile. Brokers said yesterday that there was an “almost blanket ban” on staff in certain jobs, including high income earners, despite an apparent upturn in the housing market and a rush of interest from hopeful buyers. In a twist for some of those regarded as responsible for the boom, the borrowers who are most likely to face rejection today are property developers, closely followed by investment bankers and hedge fund managers. Any person that a bank considers at higher than average risk of redundancy or other loss of income could be denied a loan purely on the basis of their job and will be considered only if they can provide a huge deposit, plus proof of stable income and assets from other sources. High income earners are increasingly being refused if a proportion of that income is based upon commission or a bonus, brokers said. They added that lenders now take into account which bank a borrower works for, with those in “safer” banks such as Barclays more likely to be approved than someone who works for Citigroup, for example. Applications from property developers would be declined in 95 per cent of cases, according to Knight Frank Finance, while estate agents, surveyors and — ironically — mortgage brokers, also face greater scrutiny of their financial affairs than those in lower-risk jobs, such as doctors and accountants. Simon Gammon, of Knight Frank Finance, said: “The biggest hit has been for workers in the property industry. Next are investment bankers, although it depends which bank.” Mark Harris, a director of Savills Private Finance, another broker, said: “There has been an almost blanket ban on developers, closely followed by investment bankers. Lenders are not yet showing signs of adjusting to improvements in the market.” /more: http://business.timesonline.co.uk/tol/busi...icle6797069.ece = = = One investment banker said: “I applied for a 65 per cent loan for £650,000 from RBS for a five-bedroom detached house in Essex. It was a bit of a surprise to be rejected. Even though my salary is six figures, a significant part of that is a bonus. I can understand why lenders are doing what they are doing, but ultimately they will lose out if they don’t lend to big earners in the City. The culling at my bank has now finished, so I should be safe.” Haha. Maybe not. Pity he did not buy in the current INCREASED Price market Link to comment Share on other sites More sharing options...
G0ldfinger Posted August 15, 2009 Author Report Share Posted August 15, 2009 ... One investment banker said: “I applied for a 65 per cent loan for £650,000 from RBS for a five-bedroom detached house in Essex. It was a bit of a surprise to be rejected. Even though my salary is six figures, a significant part of that is a bonus. I can understand why lenders are doing what they are doing, but ultimately they will lose out if they don’t lend to big earners in the City. The culling at my bank has now finished, so I should be safe.” Haha. Maybe not.... Exactly my thoughts. Link to comment Share on other sites More sharing options...
G0ldfinger Posted August 17, 2009 Author Report Share Posted August 17, 2009 This is a catastrophe in the making. If rates go back up to 16%, where will the repossessions be at? http://blogs.telegraph.co.uk/finance/files.../08/reposs1.jpg Link to comment Share on other sites More sharing options...
id5 Posted August 17, 2009 Report Share Posted August 17, 2009 This is a catastrophe in the making. If rates go back up to 16%, where will the repossessions be at? http://blogs.telegraph.co.uk/finance/files.../08/reposs1.jpg That looks a horrifying future! Even if they sink the pound to oblivion there is still no guarantee that rates will stay low. Link to comment Share on other sites More sharing options...
nicejim Posted August 17, 2009 Report Share Posted August 17, 2009 That looks a horrifying future! Even if they sink the pound to oblivion there is still no guarantee that rates will stay low. Rates would surely go up as per Argentina, but what could make wages rise fast enough for people to make the new higher payments? Link to comment Share on other sites More sharing options...
id5 Posted August 17, 2009 Report Share Posted August 17, 2009 Rates would surely go up as per Argentina, but what could make wages rise fast enough for people to make the new higher payments? De-regulated banking? Because it sure is not going to be exports Link to comment Share on other sites More sharing options...
TrueNorth Posted August 18, 2009 Report Share Posted August 18, 2009 That chart of repossessions is something else. I am delighted I don't have a mortgage, but feel for my friends who do. One friend has a mortgage of £287,000 on a property that's on the market for £299,000. If it sells for the asking price, she will just about have the funds to pay off the mortgage plus the various fees triggered by the sale. If she gets an offer for less, she would be subsidising the buyer by taking a loss on the place. I really hope she gets any offer and takes it. I expect interest rates will rise next year, and even people like her on a good salary will have trouble meeting their increased mortgage costs. I think more people are in this position than I realised. Pretty much anyone who bought in the last few years in treading water at best. Link to comment Share on other sites More sharing options...
id5 Posted August 18, 2009 Report Share Posted August 18, 2009 That chart of repossessions is something else. I am delighted I don't have a mortgage, but feel for my friends who do. One friend has a mortgage of £287,000 on a property that's on the market for £299,000. If it sells for the asking price, she will just about have the funds to pay off the mortgage plus the various fees triggered by the sale. If she gets an offer for less, she would be subsidising the buyer by taking a loss on the place. I really hope she gets any offer and takes it. I expect interest rates will rise next year, and even people like her on a good salary will have trouble meeting their increased mortgage costs. I think more people are in this position than I realised. Pretty much anyone who bought in the last few years in treading water at best. But there are some that you just can't feel sorry for. I have a friend who owns his own house outright, has a small portfolio of mortgaged rentals which he lets predominately to people he employs and is just about to exchange on a new house with a mortgage. He believes that the market will only go up from here and cannot see that if his company’s revenue takes a hit so will his portfolio, etc. Link to comment Share on other sites More sharing options...
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