Suggestions for controlling house price rises

CLAPTON

caronoel wrote: »

Most or all of us on here are of the view that rapidly rising house prices are not sustainable in the long run.

My own view is that I would welcome house price rises of a couple of percent above inflation, but that 10%+ rises are not a good thing.

The rises over the past couple of years are meritted because house prices have been flat for many years, but we dont want to encourage another crash like 2008.

A few ideas to control excessive inflation:

1) Stamp Duty at 15% for non-EU resident buyers. Hong Kong has just introduced something similar to reduce the wall of money coming in from mainland China. Seems to taken some of the heat out of the market there, without exacerbating a fall

2) Help to Buy ceiling cut to £300k, and limited to FTBs

3) Lettings Relief for CGT cut to £20k.

Thoughts?

1. what percentage of purchases are from foreigners especially outside London?

2. my understand that very few HTB mortgages were above 200,000 anyway

3. most BTL people don't benefit from letting relief as it only applies to 'accidental' landlords (i.e. people letting out their former homes and not people specifically buying to let.


would these actions make any practical difference?

PasturesNew

CLAPTON wrote: »

1. what percentage of purchases are from foreigners especially outside London?

One anecdote covered on the BBC News Breakfast programme this week was that there's a huge block of flats being built - and every one of them had been bought, off plan, by a furrener. It's in Reading. I think one of the on-site interviews said Saudi, possibly even indicated one bloke bought the lot.... but can't be sure. Google it.

marlot

don't allow BTL landlords to offset mortgage interest against income for tax. Would deflate the market quite nicely.

CLAPTON

PasturesNew wrote: »

One anecdote covered on the BBC News Breakfast programme this week was that there's a huge block of flats being built - and every one of them had been bought, off plan, by a furrener. It's in Reading. I think one of the on-site interviews said Saudi, possibly even indicated one bloke bought the lot.... but can't be sure. Google it.

Yes, it was mentioned in one of our threads; however it only matters in the scheme of things if the numbers are significant:
personally I have no idea but I would guess that any effect is a London and SE effect.

Of course, presumably it will be welcomed by people who only want landlords to buy new builds.

And do we know if it is to be let out (thus increasing the housing supply) or simply keep idle?

PasturesNew

marlot wrote: »

don't allow BTL landlords to offset mortgage interest against income for tax. Would deflate the market quite nicely.

That's a tricky one as that's how all businesses work: income-expenses="your money".

The problem has been that most BTLers aren't "a business" but just some random Joe owning the house to make money and using this way of doing accounts to their benefit.

It's that blurred line between "making money" and "being an actual business".

antrobus

caronoel wrote: »

....Thoughts?

So building more houses isn't an option then?

antrobus

PasturesNew wrote: »

I think I read somewhere that by some magical stealth, offshore company ownership etc etc .... many rich bugg4hs actually pay NO stamp duty. Something to do with how/where an asset is held..... yes, asset, it stopped being a home somewhere along the line and became a tradeable item ...

No really all that magical.

The house is owned by some offshore company. When you want to sell the house, you sell the company, and because the house hasn't changed ownership there is no SDLT to pay.

caronoel wrote: »

....Would agree that a temporary imposition of 15% stamp duty for corporate and non-EU purchasers would be welcome.

Mmmm.

That nice Mr Osborne has already taken steps to close that particular 'loophole'. Stamp duty has been levied at a rate of 15% on corporate buyers since 2012; now applies to all properties over £500k. There is also an annual tax charge being levied in certain circumstances on such properies.

http://www.theguardian.com/uk-news/2014/mar/19/george-osborne-buy-to-leave-investors-stamp-duty

CLAPTON

PasturesNew wrote: »

And increasing houses available to be bought - many would-be buyers are finding it hard to buy a house as BTLers are "snapping" them up, with EAs often seeing a BTL sale as a more assured sale (commission).

The number of houses does not change, so no less people go without a bed for the night.... only the balance of opportunity and ownership changes.... and HPI is built on more sane foundations.

a house being let or occupied by owner occupiers is indeed still the same house

it would seem to me however, that rented houses have a higher occupancy rate (house/flat sharing etc ) that owner occupied.

so if a house that, say, was shared by 3/4 people becomes a OO property shared by a couple then the rental market will be disproportionately affected with an equal gain for OOs.


the solution is to build more houses

michaels

CLAPTON wrote: »

a house being let or occupied by owner occupiers is indeed still the same house

it would seem to me however, that rented houses have a higher occupancy rate (house/flat sharing etc ) that owner occupied.

so if a house that, say, was shared by 3/4 people becomes a OO property shared by a couple then the rental market will be disproportionately affected with an equal gain for OOs.


the solution is to build more houses

I was about to say exactly the same thing, a two bed property rented, both bedrooms are likely to be used, OO and only 1 may be. But is there any data to confirm this perception?

Generali

Build more houses. Simplz.