Sellers' gloom over property market inactivity

stonethrower

Or maybe this is why he cant sell them.

http://www.bbc.co.uk/news/uk-14909066

Thrugelmir

IveSeenTheLight wrote: »

By having a higher mortgage, you release that equity for investment elsewhere and are then taxed on the smaller profit of £250.

How do you release equity?

Capital values in the main are are static or falling. May have worked between 1999 - 2007. No longer the case.

IveSeenTheLight

Thrugelmir wrote: »

How do you release equity?

Capital values in the main are are static or falling. May have worked between 1999 - 2007. No longer the case.

Ok, instead of the terminology of "releaseing" equity, is it clearer for you if I say that you don't tie up equity.

The whole post I made was looking at the difference of having a BTL with the maximum LTV and having a BTL with no mortgage (to show the extreme differences)

If you have a property valued at £200k, then it's about whether it's more practical to tie up £60k (30% deposit and £140k to invest elsewhere) or tie up £200k (no tax incentive on mortgage interest and no remaining value to invest elsewhere)

Thrugelmir

IveSeenTheLight wrote: »

Ok, instead of the terminology of "releaseing" equity, is it clearer for you if I say that you don't tie up equity.

That sidesteps the whole issue. BTL has been built on debt. Few investors have £'000's of pounds of available capital in cash to invest in property to make it worthwhile.

In 1998 there were only 30,000 commercial property loans for the purchase of residential property. Now there are around 1.2 million loans

Without capital growth there's no equity to leverage up on.

IveSeenTheLight

Thrugelmir wrote: »

That sidesteps the whole issue. .

It doesn't.
You questioned the tax incentive, which I've clarified.

Being able to claim back the interest on a sub 5% rate portion of the rental income is far better than paying 40% tax on the profit.

Thrugelmir

IveSeenTheLight wrote: »

It doesn't.
You questioned the tax incentive, which I've clarified.

Being able to claim back the interest on a sub 5% rate portion of the rental income is far better than paying 40% tax on the profit.

The danger is after a while one can believe ones propaganda. Rather than approach matters with a commercial logic.

IveSeenTheLight

Thrugelmir wrote: »

The danger is after a while one can believe ones propaganda. Rather than approach matters with a commercial logic.

LOL, watch out for those communist KGB agents

B_Blank

IveSeenTheLight wrote: »

Ok, let's be pedantic.

I foresee the increase in BTL mortgages and contraction of Owner Occupancy to continue whilst credit is restricted.

Is that clearer?

You obviously dont realise what happened to BTL during the credit crunch then.

IveSeenTheLight

B_Blank wrote: »

You obviously dont realise what happened to BTL during the credit crunch then.

Please enlighten, with links preferably.

Certainly the CML data seems to show this has expanded over time, albeit at different rates


Aug 11 & Aug 10
http://www.cml.org.uk/cml/media/press/3001

The number and value of outstanding buy-to-let mortgages continued to grow. At the end of the second quarter, 1.34 million buy-to-let mortgages, worth £154.5 billion, were outstanding, up from 1.26 million, worth £148.8 billion at the end of the same period in 2010

Feb 11
http://www.cml.org.uk/cml/media/press/2837

At the end of the year there were an estimated 1.3 million buy-to-let mortgages outstanding, worth £152 billion, accounting for 12% of the total value (11.5% by number) of mortgages outstanding.

Aug 08
http://www.cml.org.uk/cml/media/press/1857

The number of buy-to-let mortgages outstanding continues to rise: there are now 1,103,000 buy-to-let mortgages in the UK worth £132.5 billion
Buy-to-let mortgages represent 9% of the total number of UK mortgages outstanding and 11% of the value of mortgage stock.

Aug 07
http://www.cml.org.uk/cml/media/press/1251

By the end of June, the number of buy-to-let loans outstanding had reached a record 938,500. The value of outstanding loans totalled £108 billion
Buy-to-let lending now accounts for 10% of mortgage balances, compared to just 3% five years ago.

Sept 06
http://www.cml.org.uk/cml/filegrab/109-2006-buy-to-let.pdf?ref=4935

By Mid 2006, there were over 750,000 BTL loans outstanding with a value of £84 billion

Aug 04
http://www.cml.org.uk/cml/media/press/191

At the end of June, there were 473,000 buy-to-let mortgages outstanding, worth £46.8 billion, compared with 417,500, worth £39 billion, at the end of 2003.

Although buy-to-let has grown strongly in recent years, it still represents less than six per cent of lending overall

Flight2quality

morag1202 wrote: »

I think pensioners wanting to downsize will become the new BTL investors, like my late mother did in 1998.

She couldn't sell her house for what she thought it was worth and had found a nice bungalow so she took out a B & B BTL mortgage on her place, bought the bungalow outright, put the BTL with an agent and enjoyed an extra bit of income.

Thats if the new generation have any pensions in the first place. There will be no money left for my pension by the time I am old enough.