House price predictions

tomstickland

Some more pearls of wisdom from the one with a high opinion of himself

you can get a mortgage for however much you want but its whether you can afford it is the main thing.

you need to see a "friendly" mortgage advisor for this though.

Not fraud my friend just bending the truth and more and more will have to as house prices carry on going up.

I would like to say that all these people that bought houses.......a while ago, think if you'd have bought two, three, four houses!!

I think that there is one thing missing in these posts and thats having a bit of balls, its all well and good saving and scrimping and looking after things but if you don't take a few risks then you won't realise your true potential.

I would say to people instead of repaying money that youve borrowed in the first place put it into investments....start a business, buy a new house etc etc.

Your never going to lose money on a house if your careful I don't care what anyone says.

One last thing to those students that were told they can't do part time work......who would ever know and would they throw you off the course....I very much doubt it......take some chances!

Don't over complicate things id sink at least £150k into property id buy 20 houses with that. all earning me an income.

The simple maths is that

Property Prices = Up
Rental INcomes = Up
Mortgage Values = Down (Capital and Repayment)

THe only way is up!

Buy to lets are only high risk if you dont know what your doing if you research enough and do your maths they are very easy to run.

You need to know where to look for properties but they are out there!!

Gorgeous_George

BobProperty wrote:

Yes, they'll sell any asset, take on another job etc. etc. just to keep a roof over their tenant's head.

Tell me how you reclaim the 40% you lose when forced to sell then?

Yes, all repossessions have to remain empty for years by law.

As rising property prices are the main reason they are or have recently been buying into BTL, that's like saying shareholders aren't interested in shareprices.

BTLers who are in for the long term simply need to cover their costs through rent. This will be easier some years than others. Recent newcomers to the BTL market may not be able to cober their mortgage with rent and will suffer. They were warned so can only blame themselves.

If you currently could realise £100K profit on sale, you would be taxed £40K (ignoring CGT allowance and taper relief). Sell for zero profit and your gain is nil - a loss of just £60K rather than £100K. Anyone without equity in their BTL will obviously suffer the full loss but this can be offset againstother capital gains.

I remember many reposessed properties being empty for months last time round.

BTLers who bought in the hope of rising property prices are gamblers an not BTLers. If I bought for price rises, I wouldn't bother with the hassle of renting. Price rises are more a side-effect. Shareholders could be interested in dividends. Not all shareholders play the market for short term gain.



GG

BobProperty

Gorgeous_George wrote:

BTLers who are in for the long term simply need to cover their costs through rent. This will be easier some years than others. Recent newcomers to the BTL market may not be able to cober their mortgage with rent and will suffer. They were warned so can only blame themselves.

So when they can't, like they haven't been doing for a year or two what happens? I see them selling at a loss, you seem to think they can all subsidise their tenants for as long as it is necessary. No everyone was warning them and some people deliberately ignore the warnings.

Gorgeous_George wrote:

If you currently could realise £100K profit on sale, you would be taxed £40K (ignoring CGT allowance and taper relief). Sell for zero profit and your gain is nil - a loss of just £60K rather than £100K. Anyone without equity in their BTL will obviously suffer the full loss but this can be offset againstother capital gains.

That is so much rubbish. It's like the joke about running behind a bus to save the 90p bus fare when you could have run behind a taxi and saved £4.50. A loss is a loss. Dressing it up with tax relief doesn't stop it being a loss. Where are BTLers going to get all these "other capital gains" from when they are 100% in property?

Gorgeous_George wrote:

I remember many reposessed properties being empty for months last time round.

So do I, but then property doesn't sell fast in a recession. Why does that put more pressure on the rental market?

Gorgeous_George wrote:

BTLers who bought in the hope of rising property prices are gamblers an not BTLers. If I bought for price rises, I wouldn't bother with the hassle of renting. Price rises are more a side-effect......

So you just bought on the rental return? What is it compared to the current value of the property? Presumably if it is less than about 6% you will be selling the property and banking the money?

roswell

Just for info - Mortgage free at 26 - million pound property portfolio in less than 3 years with minimum of £300000 equity.

By my maths that means you are worth £300 000 wth £700 000 worth of debt and liability. I think that would look a lot better the other way round.

If hosues can raise in value 15% in one year they sure as hell can fall 30% in 2 years in that case you would be worth £0 with £700 000 in liabilities .. or my maths could be wrong.

ds1980

do i sense some jealousy around here?

I don't need to justify myself on here. Don't forget to take into account 3 businesses, successful ones at that. Art, fine wine and any probably investment you can think of. Money makes money and thats what ive got and thats what im doing! WHatever happens something in my portfolio will make me a fortune whether it be art originals or my stocks and shares doing well.

Keep up the good work guys

devils_advocate

Dear all, Is there any truth in that you can only pay tax on any 3 years gain, so the tax would only be the gain in the property price from 3 years ago until now?????????? I dont assume this be true but have heard it somewhere!!?!?!?!

You've got a business in 'probably' (I presume property) investment and you don't even know the basic taxation rules regarding it? How can you call it successful when you don't even know if an action you take will cause a liability to crystallise? And what makes you think that you're more successful than anyone here.

I'm sorry if it looks like this is a personal attack on you, ds. Its not meant to be, but it does worry me that some posters come in here and give the 'look at me, I'm stinking rich, and if you pile in to BTLs you can be stinking rich too! Oh and by the way, anyone who doesn't is an idiot.'

This site is wonderful in helping people out when they have problems or they wabnt a question answered. I've done BTL myself, made money and this cash is now sitting in a variety of other investments. I don't want to stop people getting in to BTL, but I'd prefer them to know of the downside risks before getting in to it, rather than afterwards. Look at the endowment mortgage fiasco - too long to go into taht one now, but it was a disaster waiting to happen. For BTL, there isn't going to be a compensation fund to limit the downside risk for all those who are in it.

So in summary, if someone is coming out with a story taht sounds to me like its too good to be true, like my username suggests, I want to test their assumptions in order to prevent others getting suckered in. Hopefully this explains my motives to you and especially the other good posters on the site. And if you want any business advice/ analysis, PM me and I'll see if I have time.

Alan_M_2

There's an awful lot that doesn't add up here, you don't get £700,000 in mortgages on a £20K a year income. Unless of course there's a guarantor or family money in there somewhere.

Fine art? This should be interesting, so after paying down all your borrowing, and taking into account your living expenses (which for the purposes of this post we'll assume are covered by excess rent), assuming you have no personal mortgage lets say your entire £20K salary is disposable income.....

So you have £1,250 a month to invest in fine art........exactly what fine art are we talking about here? Van Gogh, a couple of Venetian scenes by Canaletto? Or as I suspect.....Picasso in his bullsh1t period.

There's nothing wrong with dreaming, but make it at least plausible if you insist on posting it on an open forum....still gave me a chuckle at least.

Gorgeous_George

Hey Bob, I have read your posts before and I understand where you are coming from. Please do not confuse with DS.

BobProperty wrote:

So do I, but then property doesn't sell fast in a recession. Why does that put more pressure on the rental market?

My view is that people need to live somewhere. We already do not have enough homes for all the people who want to live in them (buying or renting). If many houses are empty, this adds to the problem. People who are evicted for failing to pay residential mortgages will look for somewhere to rent. Evicted tenants will also need somewhere to live.

So you just bought on the rental return? What is it compared to the current value of the property? Presumably if it is less than about 6% you will be selling the property and banking the money?

I was not talking about my personal situation. FWIW, I paid £15,500 for a 4 bed house in 2001 and currently rent it out at £85 per week. I'll let you do the sums and tell me where I'm going drastically wrong. It did cost a few grand to sort out before it was let in 2002 and I have had voids of about 20 weeks since then.

To sell now I would probably 'make' £60K in capital gains and pay £20K in CGT. I'm happy to hold on and not give my tenants notice to quit their home. I bought it as a long term investment where I'm happy to break even - even after tax.



GG

roswell

ds1980 wrote:

do i sense some jealousy around here?

nope not a sausage if you feel safe borrowing to invest then thats upto you,

personnaly its not for me I can rightfully say im potentialy worth £100 000 after deducting my £15 444 liability so fine your worth 3 times as much as me but its costing you a lot more and your risking a lot more.

Your comfort zone and my comfort zone are different but your assumption and arrogance that your "Million" is worth anything is wrong its only real when you hold that in cash with no debts. But cash isnt real anymore but thats a whole different kettle of fish.

PosterBoy77

Gorgeous_George wrote:

BTLers will suffer less than homeowners in a crash.

For example, a £10K drop in house price equates to just £6K for a BTLer due to the reduced CGT liability.

Of course, price falls will put a dampener on the 'business'. My only consolation is that there are millions of people who will be worse off than me - and I wish no-one any misfortune.

Repossessions = empty houses = more pressure on the rental market. Any BTLer not concerned about property prices will not lose out.

The most affected will be those owning small houses and flats. Nobody will want to buy a poky little one bedroomed flat or house when a two bed house is within their grasp.

As prices crash, builders stop building. They hold onto their land waiting for the upturn.

As for DS, I think it's BS.

AR:- CGT is only paid when you sell and make a profit.



GG

P.S.
I'm surprised that so many people have voted. 179 so far and the results are not as I expected with voting for a rise than a fall - despite IR increases.

A point to note. CGT liabilities can be reduced by taper relief. If you have held a property for 10 yeares or more 40% of the gain will be excluded from the CGT calculation. Even after 3 years there is a 5% reduction.