Accidental Landlords are starting to sweat.

chucky

StevieJ wrote: »

Is it not 18% now ? So you are paying capital gains even though the house is down in price:eek:

yep that's the beauty

Rochdale_Pioneers

Dan: wrote: »

The conservatives are in support of low interset rates whilst the UK remains in recession.

I'm sure they said the same thing during the last recession when rates were steady at 12%. Saying "We support X" isn't the same as "we're pursuing policies to make X happen".

Thrugelmir

SouthCoast wrote: »

A shortage of rental property is a myth in the four postcodes that
I track on RightMove.

Number listed:
April 08 136 52 154 26 = 368
June 08 160 50 208 36 = 454
Aug 08 177 80 271 58 = 586
Sept08 222 98 337 64 = 721
Oct 08 230 103 324 58 = 715
Dec 08 245 153 378 106 = 882
Jan 09 248 143 401 94 = 886
Mch 09 253 132 446 102 = 933

Which post codes are you monitoring?

A friend in Brighton is coming to the end of a 2 year tenancy and has been advised by letting agents to reduce the rent by £350 pm to attract interest. Apparently there is an excess of property across the board. Even letting rates for a single room are falling for students due to oversupply.

She and her partner are thinking of moving back and letting his property now to avoid CGT issues.

rent_and_buy

penguine wrote: »

So in about 3 years' time a lot of properties will come onto the market as accidental landlords realise prices aren't going back up anytime soon.

Maybe we will sell our house in three years maybe we wont, its valued at 150,000 pounds now and house prices by me have dropped 5-6% in the last year, i dont mind hanging on to it if the rent covers the mortgage i havent got anything to lose.

I only owe 50,000 on it, and its going to give me a nice deposit for my next property and ill still have over 30% equity in my rental property.

Having said that if people dont start dropping their prices by me i might not be renting my house out this year at all.

One thing i have decided though, whatever happens i will not be selling my property in the next three years, maybe longer, ill just see what the house prices are like in three years, and thats 3 years from when i buy.

John_Pierpoint

chucky wrote: »

yep - they're the ones. it's all in their favour if done correctly.

if you sell within the first 3 years of renting you don't pay any Capital Gains.

if you live in it for 5 years rent for 4 years owning the property for a total of 9 years you do have a Captial gains tax liability. however, you don't pay 40% Capital gains straight. you only pay four/ninths of the Capital Gain.

2008-09
There is a single rate of Capital Gains Tax of 18 per cent for individuals, trustees and personal representatives.

Are you thinking back to 07/08?

chucky

John_Pierpoint wrote: »

2008-09
There is a single rate of Capital Gains Tax of 18 per cent for individuals, trustees and personal representatives.

Are you thinking back to 07/08?

yes i was - apologies

boyse7en

StevieJ wrote: »

Is it not 18% now ? So you are paying capital gains even though the house is down in price i,e. the original value is from when you bought it not when you started renting:eek:

Not sure if it still the case, but when we moved out of our house and started renting it out (back in 2001) we had to have the house valued so that capital gains could be worked out based on any increase in value from that time, rather than the original purchase price. The period it was our principal private property is exempt from CG calcs.

John_Pierpoint

If the government was "clever" it would introduce a lets-start-again date for 2009 and then with a incentive to make a success of the economy it would look forward to raking in lots of CGT in years to come.

(Woops I've got that wrong, us tax payers would also need the return of indexation so we only got taxed on REAL gains).

Perhaps doing away with indexation was one of the first signs of labour perfidy.

SouthCoast

Thrugelmir wrote: »

Which post codes are you monitoring?

A friend in Brighton is coming to the end of a 2 year tenancy and has been advised by letting agents to reduce the rent by £350 pm to attract interest. Apparently there is an excess of property across the board. Even letting rates for a single room are falling for students due to oversupply.

She and her partner are thinking of moving back and letting his property now to avoid CGT issues.

They are BN postcodes, but not Brighton & Hove.

Local builders have been unable to sell their new build developments. They tend to try for about a year before capitulating and putting the properties on the rental market.

Thrugelmir

SouthCoast wrote: »

They are BN postcodes, but not Brighton & Hove.

Local builders have been unable to sell their new build developments. They tend to try for about a year before capitulating and putting the properties on the rental market.

That's what she said. One developement had only sold 8 of 30 odd units. So the remainder were being let. This meant it was hard to compete with newly built high spec property in the rental market.