Will what goes up ever come down?

I thought it depended on how much Viagra one took.... Ooops, did I just say that!

*giggle* *snort*

Johnboi..

This is my last upgrade.... after this my system will be finished...:-)

Here on the south coast, the first time buyer market has stalled and my brother-in-law was told by the Abbey National mortgage advisor that he was the first FTB'er they had sold a mortgage to in three months!! When the FTB'er market dries up, the rest stalls, and house prices in the difficult 500k stamp duty threshold region have dropped 10-15% in the past month. Things are not selling unless heavily price slashed. FTB'er flats here that were 160k are now generally 110-115k. It can't go lower. Don't forget that this is an engineered interest rate increase and not due to an economic collapse - so it is nothing like the crash of black Wednesday. It is extremely unlikely that the government will want it to drop out lower, but are probably wanting to maintain it at this level if possible. House prices are probably as low as they will go, because people are still working it out - when they get used to the new situation the houses will start selling again. This is a good time to buy (ironically) while sellers are still confused - if you have the balls. Developers are lapping it up right now.

average property prices in Q2 in suburban borough still around £250,000. Mortgage ratio of 3.5 means average salary of around £71,500 - I don't think so.

Low interest rates/low inflation does not mean that life time costs of mortgages are lower, only that the early costs seem lower but the mortgage burden will remain high unlike the high interest rate/high inflation scenario where initial costs are crippling but after a few years they are minimal. If house price stay where they are there are going to be a lot of people who will be stuck in one bed flats with no ability to move.

Matthew

Word to the wise ... inheritance tax ... know what I mean? May take a few years to bite, but bite it will.


That said supply and demand implies prices will stay high.


Won't somebody think of the first time buyers?


Low unemployment and a stable economy that'll keep them up.


Buy to lets will start selling.


Long term investors are bolstering their pension plans, where else can they invest?


...

quote:

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Originally posted by reductionist:
Buy to lets will start selling.
...

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And who will buy? Other buy to lets, first time buyers?

If the buy to let buyers decide to stop buying and start selling it could get really messy.

I am considering selling my flat and buying my first house. The gap between the two looks more manageable than whenever I've looked before, and they don't appear to moving too quick. No idea how hard it will be to sell our place though.

In contrast, run down townhouses in Brighton seem to still be being fought over. I guess this is because if you register with the uni housing scheme, you can cram them full of students and still make good money.

I have know several people who have empty houses (in one case, he has several) who just leave them without tennants - and at a time when the council here are allowing building on any bit of land they can find.

They often get left these by houses by relatives, don't need the cash and (quote) 'Can't be bothered to do anything with the house'.

Here is what I think the government should do.

Tax house sales unless the sale is used to buy another main residence.

Make people who own empty houses either -

Sell the house.

Lease to the local council who can then refurbish the house and rent it out.

If the owners won't or don't do either of the above, they should be forced to sell to the local authority.

Force councils to refurbish/sell/rebuild derelict houses and provide the money from tax.

Tax people with second homes at least at the council tax rate to encourage them to sell or let.

The reason prices are high is the lack of available houses - raising interest rates will not help, as people will do almost anything to have somewhere to live. It is stupid to make mortgages more expensive, as that ony damages people who are struggling.

Take a walk around your local area and see how many houses are empty.



Stephen

The government does tax house sales, whether it's for your main residence or not.

They also charge VAT on renovations but not on new builds. This clearly skews the market.

Paul

quote:

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Originally posted by alexgerrard:
The proceeds of sale of your main residence are currently outside the scope of Capital Gains Tax.

How else are these proceeds taxed?

ag

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I think Mr. Ranson was alluding to stamp duty.

Taxing the profit made from selling a house (main residence), even at a low 2 or 3 percent would very quickly stabilise the housing market imho.

When a house is sold the government collects tax. It doesn't matter who pays, it comes from the same 'pot'.

It would be typical of government (and especially this government) to see rising house prices as a problem and use additional tax to treat the problem. It's like treating persistent headaches with a lobotomy. The underlying issue is that alternative forms of long term saving are being discouraged rather than encouraged and property is seen as a safer long term investment.

Paul

quote:

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Originally posted by Paul Ranson:
When a house is sold the government collects tax. It doesn't matter who pays, it comes from the same 'pot'.

Paul

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Alex Gerrard,

Told you so.

Of course. And my negotiation on price will bear in mind the Stamp Duty adjustment. Makes no difference who actually writes the cheque, you're paying somehow.

Paul

Yer gettin there folks, yer gettin there.


Fritz Von Lollypopladies

quote:

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Neatly making my point, I the purchaser, am paying the tax, not you the seller.

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And if there's an additional uniform tax on sales you will still be paying it. I don't see how an additional tax will change the market in a way that adjusting stamp duty wouldn't.

Paul

I had a dog once !

The proceeds of sale of 'buy to let' are surely taxed at 40% already? You'd also presumably offer 50% tax allowance on any loss incurred?

Anyway I think this is all treating the symptom rather than the actual problem.

Paul

Be more specific John, which Tax are we talking about here ?