Do you think property prices will double in 10 years?

Ali120604

It really depends where your property is. In some areas, where there is a regeneration plan, prices are fairly low compared to the rest of the country and those areas could well see a large rise in say 10 years. You need to consider how interest rates will change and what the state of the economy will be.

For what it's worth, I doubt house prices will double in 10 years. Look at the web statistics on property prices and you will see that overall, prices always rise. Providing this is more than you would get by leaving the money in a bank, surely it's worthwhile.

Why are some people so worried about property investment? People will always live in property and bear in mind the population is set to grow over the next 10 years........

lynzpower

seraphina wrote:

Just a quick OT observation - I think we're a bit too harsh on shows like Property Ladder. I'd say between a quarter and a half of all people on that show wind up living in their "development" because they can't sell it at a good price. Sarah Beeny has always been very clear about what percentage of the final value can be attributed to a rising market - if viewers chose to extrapolate that to a blanket statement reading "all houses will increase in value all the time" that's their own problem.

and they barely ever mention capital gains tax.

Chichi_2

mi-key wrote:

Interesting point in that previous post 'even a dead donkey with a BTL could make money'

Exactly - most of these people who have 'made a killing' from property benefitted from freak rises in the property values - they made their money by selling the places they had bought cheap at very high prices. I bet 90%+ of these were just lucky.

Had prices not rocketed, they would still be renting them out and making a modest return, and planning to sell in 20 years when it would be worth it.

But now, all these amateur BTL investors are buying at the peak of a price increase, and still think they are going to make the same profits someone who bought 5 years ago did.

Partly I blame the 'Property Ladder' style TV shows, which have given the impression anyone who buys a house for any amount will always make huge amounts of money on it. /QUOTE]


I was most definitely an amateur BTL investor, 10 years ago you could easily achieve a gross yield of 17%. We didn't need to sell them even though the prices have rocketed as the income was sufficient to even buy more.

Yes, I do agree that we mustn't be swayed by what happened in the past as it was unusual for prices to have rocketed the way they have. When I bought property with someone 10 years ago, I never did it because I believed the price would go up dramatically, we simply wanted additional income. When prices did go up, it was an added bonus. I would NEVER advise anyone including my mum to invest in BTL unless the yield is at least 8%. What's the gain otherwise?

Some property shows do breed a false sense of security whereas other shows mention yields but don't seem to explain what a good yield is.

My advice: Good location, nicely decorated/furnished, transport links and 8% + yield.

Chichi_2

lynzpower wrote:

and they barely ever mention capital gains tax.

I'm glad someone mentioned this as no-one has up to now. When you dispose of a second property which you have never lived in the CGT can be 40% of the difference between purchase price and selling price. So if you buy at £100 and sell at £150K, give or take allowances, relief etc... you might have to pay 40% of approx £40K when you sell it.

However a good tax planner could advise on ways around this should you wish to sell the property. If it becomes your principal home for a set amount of time, CGT can be avoided altogether.

meanmachine_2

Chichi wrote:

However a good tax planner could advise on ways around this should you wish to sell the property. If it becomes your principal home for a set amount of time, CGT can be avoided altogether.

The way Gordo's going I wouldn't be surprsed if this tax loophole was closed soon.

ManAtHome

And with this years pension changes, he might twig that property is easier to tax than people.