We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
Debate House Prices
In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non MoneySaving matters are no longer permitted. This includes wider debates about general house prices, the economy and politics. As a result, we have taken the decision to keep this board permanently closed, but it remains viewable for users who may find some useful information in it. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Financial Transaction Tax - Does it make property more attractive to investors?
Comments
-
No response from GD as yet....0
-
RenovationMan wrote: »No response from GD as yet....
If and when it happens, maybe he'll get thanked as well.
We could be on the cusp of witnessing a historic moment in the life of this forum.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
You seem to be asking a lot of questions about what you should do.
I suggest that you might get better answers on the Savings and Investments, or Pensions, Annuities and Retirement Planning boards.Nice !
RM thanked me !
:beer:
We all know it probably won't, but please enjoy the "ceasefire" while it lasts.
If and when it happens, maybe he'll get thanked as well.
We could be on the cusp of witnessing a historic moment in the life of this forum.
Jeeze Derv, you seem to have been desperate for a rumble since I started this thread. You hardly post on the board and yet when I start a thread and suddenly every second post is from you. What's your problem? Not getting enough attention or something?0 -
To OP. I suggest you do all the sums. Right now BTL is not worth the hassle even if you have the cash to finance it rather than having the house mortgaged. Yields are not high enough, not any more than in a savings account plus you have the downside risk of your capital falling in value.
If we have a period of HPI then its worth it, but I don't see that happening for within at least a 5 - 10 period or until the economy comes off life support of QE and 0.5% base rates which is actually prolonging the agony.0 -
It's OK making all sorts of plans to be financially well off in retirement, but you have to consider that your health may not allow you to enjoy the fruits of your investments. And even if you do live 10, 20 or 30 years after retirement, you have to make sure you don't forfeit too much today for what may or may not happen tomorrow.
As JB has just said, you do have to make plans based on today, but it isn't quite as simple as that. As we have seen, planning for the future will always be a bit of a gamble. You have to assess the risks. I have simply stated a few of the risks.
Wise words of the day.0 -
MiserlyMartin wrote: »To OP. I suggest you do all the sums. Right now BTL is not worth the hassle even if you have the cash to finance it rather than having the house mortgaged. Yields are not high enough, not any more than in a savings account plus you have the downside risk of your capital falling in value.
If we have a period of HPI then its worth it, but I don't see that happening for within at least a 5 - 10 period or until the economy comes off life support of QE and 0.5% base rates which is actually prolonging the agony.
Interesting point about yields, though could you explain how you calculated the yield figures to come to the conclusion that they are not high enough?
As far as the HPI observation is concerned, I agree that house prices are going no where but I wouldn't be wanting to sell (and therefore gain from HPI) anyway as it undermines the purpose of getting a BTL, which would be to secure an income in retirement that does not rely on the stockmarket, etc.0 -
RenovationMan wrote: »No response from GD as yet....
What am I supposed to respond to?0 -
RenovationMan wrote: »I agree with your point about risk, putting a large proportion of retirement cash into an illiquid asset. It has been my position for many years now as I argued against BTL. However, as an increasing amount of regulation and taxation is hitting the traditional pensions industry I just think that perhaps the benefits are starting to outweigh the risks?
It would be interesting to see a comparison between the investment gain you coul receive from, say, £30k invested today into a pension plan and £30k invested into a BTL (i.e. as a deposit) and then to futher compare the retirement income that your pension could provide via an annuity and the retirement income from a mortgage free BTL property.
If you keep your money in cash, then it will be eroded by inflation.
Cash can't really be seen as an investment and only really keeps track of inflation at best.
The trouble is, BTL is as much a business as an investment and on top of that you are using leverage (debt) directly rather than indirectly if you buy shares (I say indirectly as most companies borrow money on your behalf as part owner). Also, costs are variable and unpredictable.
If you look backwards over the past 10 years or so, BTL will generally have been a spectacularly good investment in most cases. Will it be so for the next 10 years? We'll know in 2022!0 -
RenovationMan wrote: »In many respects, it's an advantage if the rent just covers the mortgage (including voids), management charges, maintenance, etc. because then you don't have to worry about increasing your income tax while you're working. The aim is to have an income in retirement, so as long as the BTL mortgage is paid off (or significantly paid down) at retirement age, then the rental income can become retirement income.
If the BTL property does not generate cash, i.e. after tax profit. Then the mortgage never gets paid off. Something which the majority of amateurs appear to have no conception of.
Many seem to have backed property much in the same way as backing a horse in the Grand National. With a pin.......0 -
If you look backwards over the past 10 years or so, BTL will generally have been a spectacularly good investment in most cases. Will it be so for the next 10 years? We'll know in 2022!
Property over a 10 year period has already fallen back. The market peaked 5 years ago and hasn't finished falling back in real terms yet.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352.2K Banking & Borrowing
- 253.6K Reduce Debt & Boost Income
- 454.3K Spending & Discounts
- 245.2K Work, Benefits & Business
- 600.9K Mortgages, Homes & Bills
- 177.5K Life & Family
- 259.1K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards