To think house price madness will have to end somewhere?

[Moomoomango]

House prices in my area ( and I understand most areas) have gone mad. My neighbour has just sold her bungalow with loft conversion for £415,000 - and it's not in great condition needs new flooring & a tidy up. We live in a nice area but nothing amazing like sea views etc , just a normal town with normal houses and normal people. I have many friends who cannot afford to get on the ladder at all so cannot start families etc. Aibu to think this has to end or is the shortage a sure sign prices will stay high?

I reckon government should step in, compulsory purchase whole blocks, and sell the land to be demolished and redeveloped as nice towers.

Phased over many years, naturally, to artificially keep prices high

@ ChazsBrilliantAttitude

Well I guess they'll just be spivs with a limited company then? Boy the BIK tax on that Evoque is going to be stiff!

But OK, you sound like you think the incorporated route is the silver bullet, so I suppose you want a more nuanced answer than that.

Lots of talk about that approach all over the place, in particular on certain - previously-referenced - Darwinian fora. Good luck with....

1. The stamp duty on transfer - if BTL LL's are in a position where the removal of the current tax subsidy will put them in financial difficulty, I doubt they'll be finding the SDLT needed to make the transfer on their portfolio lying down the back of the sofa. Tricky for starters.

2. Thinking they are "clever" and "just" transferring the beneficial interest, in an attempt to avoid the SDLT. Nice try but no cigar - totally against BTL mortgage T&C's, and lender would most likely call the loan/s in immediately (esp. UKAR, who want to wind down the book as soon as practical, and are itching for such an excuse to foreclose.) Oh - apparently some might not tell the lender, and there are suggestions of setting up a company with a similar name to their own, thinking the lender won't notice on the payment reference. ROFLMAO - Plain Simple Fraud, anyone?

3. GAAR... Transfer to a company vehicle, after years of reaping the benefits of individual ownership, would be clearly for the sole purpose of avoiding tax. Ergo against GAAR, and would get (deservedly) a right good slap by HMRC. And don't forget, these days HMRC take the money first and answer questions later - in the meantime your average over-leveraged spiv will be bankrupt anyway. But enjoy the last few months lording it over tenants in the Evoque - assuming one can afford to put petrol in it by that point...

You'll certainly be able to find an accountant or lawyer who will tell you what you want to hear, and make soothing noises that transferring to a company vehicle is fine - but look in their letter of engagement and advice, and note that they won't stand by it legally. You will be expected to "satisfy yourself that it is the appropriate course of action" and that's a hell of a decision to make - especially in the light of point 3.

Did you have any other questions?

B :-)

Buzzardo
Why the hatred for landlords? Supermarkets profit from selling us food; utility companies for supplying energy and water. All stuff necessary for life. Do you hate them for making money for supplying necessities?

What about the big landed estates that still own significant chunks of Central London? (Grosvenor, Howard de Walden, Cadogan, Portman & Bedford estates) Are they spivs too?

It pretty much stopped up North in 2008 bar a few hot areas.

chazs I've asked that question many times of the bleating landlord haters, and they never answer. Strange... or not really!

It's all about jobs though. I'm job hunting for academic/professional/managerial roles and am on sw/se border. If I look at se, over 12 000 jobs are listed. Sw, 2000. London, innit?

The scruffy house we bought 10 years ago for £250, 000 has just been valued at nearly half a million...ridiculous! That's crossrail inflation though.

Values on similar properties shows a 50% increase on our flat in five years - over £100k. We have about £250k in equity but can't afford a house, three bed semi in scruffy London outer borough cost £650k. The gap between two and three beds is impossible to bridge on a normal salary or two even with our huge potential deposit. There are flats springing up everywhere and families are squeezing into smaller homes. However there isn't as much increase in capacity of local services.

We are considering an extension. It would be a fraction of the costs to move even with the same floor space.

Interest rate rises will be interesting although painful. A necessary evil perhaps.

@ Chaz and Specialsubject

Supermarkets et al provide a service, and a supply chain to connect producers and consumers. They add value by distributing producers' goods, and making them available to consumers, who have a choice whether or not to buy from them. But in and of themselves the don't hoard or create artificial scarcity.

Landlords hoard an already scarce commodity, and in the process make it unaffordable for others (IO mortgages vs MMR, for example.) They add no value, rather they are just parasites on the backs of people who actually work for a living.

If someone who had access to limitless debt, to buy up and hoard all of any other basic life necessity (e.g. water) and then sold it on at a massive profit - including to you and your family - and there was no other way of getting a drink, then you might understand.

Don't kid yourself you're providing "a service." Nobody else believes that, and very soon many leveraged landlords are going to see the truth when they're renting themselves. That will be a moment of joyful irony for many young families in this country.

Does that help answer your question?

Cheers for now.

B

@ Chaz and Specialsubject

Supermarkets et al provide a service, and a supply chain to connect producers and consumers. They add value by distributing producers' goods, and making them available to consumers, who have a choice whether or not to buy from them. But in and of themselves the don't hoard or create artificial scarcity.

Landlords hoard an already scarce commodity, and in the process make it unaffordable for others (IO mortgages vs MMR, for example.) They add no value, rather they are just parasites on the backs of people who actually work for a living.

If someone who had access to limitless debt, to buy up and hoard all of any other basic life necessity (e.g. water) and then sold it on at a massive profit - including to you and your family - and there was no other way of getting a drink, then you might understand.

Don't kid yourself you're providing "a service." Nobody else believes that, and very soon many leveraged landlords are going to see the truth when they're renting themselves. That will be a moment of joyful irony for many young families in this country.

Does that help answer your question?

Cheers for now.

B

What about people who move to a different area and want to rent for 6 months to sound the area out Buzzardo? Or the people who want to rent whilst they're between selling or buying houses? Or the university students who rent a house together in their second year, third year, fourth year? Or the 20 something year olds moving out of their family home to rent a flat or house with their mates? Which properties are they all supposed to live in?

Don't kid yourselves you're providing 'a service' . What is it then?

What Buzzardo said.

If someone who had access to limitless debt, to buy up and hoard all of any other basic life necessity (e.g. water) and then sold it on at a massive profit - including to you and your family - and there was no other way of getting a drink, then you might understand.

I think you've just described every water company in the UK.

Buzzardo - your analysis doesn't address cash buyers - of whom their are many in the UK and among overseas investors. The doom and gloom stamp duty stuff doesn't have that huge an impact in the lower end of the market. (Instead of paying £0 stamp duty on the last place I bought, under the new rules I'd be paying £3750 - about 4 months' rental income on a house shared by three young, working tenants. I'd rather not pay it, but it's not exactly Everest.)

Those overseas investors, by the way, are still free to buy - rather than bar them / put a further financial levy on them / require them to seek licences to purchase a particular property a la Austria, the Gov't has chosen to go for local landlords. We may be part of the problem, but there are rather more obvious targets out there. The Gov't's failure to even consider that kind of move seems to suggest that they're more interested in making a populist gesture against the small-time landlord.

(They might also, if they were that way inclined, make moves to check LL affordability, as they did with the rest of the residential sector. That's a much more sensible, less populist approach. They haven't done that. That's likely coming in, but only thanks to European regulations coming in soon.)

I'm up for a reasoned debate on this, but the Range Rover-driving spiv (I have a sedan not much younger than me), greedy, overleveraged (it's 60% across my portfolio, with all mortgages being repaid), tax-avoidant-bordering-on-illegal rhetoric (I'm a solicitor) is a complete straw man. Frankly, if your hypothetical overleveraged spiv doesn't realise that taking on that much debt may be risky, let him or her wait and see what the market dictates. We're not all Rachman figures.

*there

The 2 bed terrace across the road from us with downstairs bathroom off kitchen and tiny courtyard garden went for about £379k the other day. A for sale sign went up, they had a open day on the Saturday and Sold sign by Monday! Crazy stuff. This is SE 15mins walk to station on a slow train line to London.

So lucky we bought back in 2010 when had a windfall of money. No way we could aford anything like what we've got if starting out now. It has to reach a peak at some point as wages aren't going up at the same pace.

Nadia you've missed a bit off

What Buzzardo said is mostly a load of bollocks.

Two bed maisonettes where I live are selling for £375-£400,000.

I bought a 5 bedroom semi last year, perfect, walk into condition, garden, great location, 18 minutes into the heart of the capital for £215K.

Which country pearly? Certainly not England's capital!

We bought in 2010 and up against a BTL looking to increase her portfolio. The owners sold to us as his brother and my sister live in the same random suburb in Australia. He saw it as a sign

We offered less too. My point being BTL don't have it over us, they're just doing their thing and yes, providing a service, as not every one wants to/can afford to/would even get a mortgage.

YANBU
Two bedroom terraced houses (about 60 miles from London) going for 450,000+
Cheapest three bed houses start at 350,000

...oh and over half of houses are sold to overseas buyers for buy-to-let.
Real housing crisis here now. Cheapest rent for crappy three bed is 1300