'The Government is on very thin ice here if it's going down the affordability route'

Graham_Devon

HAMISH_MCTAVISH wrote: »

Shopping around for another one or two at the moment.

You haven't got one yet.

Let us know when you have bought though...we'll know house prices are about to tank

Prudent

HAMISH_MCTAVISH wrote: »

Don't forget with BTL your tenant pays for all or almost all of the mortgage in the early years,


It's impossible for that to be "less return than other investments". Show me any other investment where someone else pays for it on your behalf.... No matter what the percentage returns may be.

I have probably misssed the boat on the time factor in this one then as I am now mid 40s. I also strongly dislike personal debt and whilst a BTL is technically a business, I would still be responsible for the mortgage. I went to extreme lengths to pay off my own mortgages as I hated having one.

I did look at buying a property outright. The sums didn't really stack up. I would loose the interest/dividends on that money and not gain the tax advantage of being able to offset the mortgage interest. I was looking in early 2007, so retrospectively I am very glad I didn't buy. The investments have done ok, some of the properties I looked at have come back on the market at a lower price.

HAMISH_MCTAVISH

Graham_Devon wrote: »

Let us know when you have bought though...we'll know house prices are about to tank

I am an excellent leading indicator in that regard. :rotfl:

It won't be until winter, I live in a seasonal market and there is a pretty big difference between summer and winter pricing up here.

IronWolf

Stock market > BTL

Generali

I guess that the big assumption is that GDP can continue to rise at the same rate despite an aging population. That certainly hasn't been Japan's experience.

Also, pensions are only part of the cost of an aging population. There is also health and personal care to consider. I guess looking at the cost of pensions alone is like looking at the price of oil alone to decide on which car is going to be cheapest to run while ignoring depreciation, servicing, insurance etc.

Procrastinator333

HAMISH_MCTAVISH wrote: »

Sky news reported today that to get a £24,000 a year pension, the average worker would have to save a pension pot of £500,000. (all in today's money, plus inflation)

BTL looking more attractive by the day.....

Three flats and it's done, with other people buying all or most of your pension for you. Actually, given the inevitable real terms increase in house prices over the next couple of decades, 2 flats would be more than enough.

£500k for £24k income, that sounds like an indexd linked rate. Far from the best way of dealing with such a pot, but it is a good comparison to show how valuable public sector pensions are.

I strongly disagree btl should be used instead of a pension. Miss out on the tax relief. And something about all your eggs and one basket. Imo if you are on course to hve < £500k, u shouldn't use btl fir your pension.

I think it has many appealing qualities after that point. Myself, I fear how long the hr tax relief will be around for. I can see it going or being severely restricted in the future. So for the moment, we are pushing all we can in to the pension. Even after matching contributions, it is still great value to me. Between hr relief and sal sac, for £60 of net pay we get £112.80 into the pot. I'm happy to take an 88% gain on day 1. 5 years I can see hr limited to only £5k or £10k per year.

5 years time with hr gone, might be time to diversify. Until then, tax relief trumps the other options for me.

LydiaJ

Mr_Mumble wrote: »

The Sky report is nonsense!

Check page 128 of the latest OBR economic and fiscal outlook report. It shows gross expenditure for central government unfunded pension schemes rising by more than 29% between 2010-11 and 2015-16 from £26.1bn to £33.7bn.

I assume some dip at Sky has compared the entire public sector pensions cost of 2008-9 with that of the central government cost (ex-LGPS, police and fire) for 2015-16!

Interesting. Do you know if this kind of information is available for the various pension schemes separately anywhere?

Bullion_Baron

HAMISH_MCTAVISH wrote: »

No matter how you cut it, with BTL someone else buys you an asset.

Oh, so we should all BTL then and be millionaires. Oh wait, who would rent then if everyone was a LL?

HAMISH_MCTAVISH

Bullion_Baron wrote: »

Oh, so we should all BTL then and be millionaires. Oh wait, who would rent then if everyone was a LL?

Well obviously we can't all rent, and can't all buy.

Even at the peak of owner occupancy, 30% of the population couldn't afford to buy, and in other developed nations it's far lower still.

As to who will be renting, and who will their landlord, that's little more than economic Darwinism in action.

StevieJ

Mr_Mumble wrote: »

The Sky report is nonsense!

Check page 128 of the latest OBR economic and fiscal outlook report. It shows gross expenditure for central government unfunded pension schemes rising by more than 29% between 2010-11 and 2015-16 from £26.1bn to £33.7bn.

I assume some dip at Sky has compared the entire public sector pensions cost of 2008-9 with that of the central government cost (ex-LGPS, police and fire) for 2015-16!

On This Week, they were discussing how a chart from the Hutton report showed the the dwindling % of public sector pensions to gdp and how the Govt had quietly changed their tack from unnaffordale to untenable In fact due to the sacrifices already made the % fall from 2% in 2010 to stabilise at 1% in the future.