What would encourage you to divest property?

cells

mwpt wrote: »

Or does it suggest that people were not selling their previous homes but rather letting them out when they buy something else? I think the 3% surcharge will help with this particular issue.

It is not clear but by the look of it its roughly

100,000 with BTL mortgages
X with cash purchases
Y with people keeping their starter homes

Where all three combined equaled about 440,000 last year so X and Y greatly outnumbered BTL mortgage purchases which a lot of the crash wishers think the the only factor driving prices.

The additional stamp duty night make group Y sell rather than hold but then again it might not. For me if I was moving home the additional stamp duty would not put me off from keeping the old house.

The next 5 years will be interesting. Could go either way but I'm on the side thinking that the rental sector will continue to expand and rents and prices will go up asbtje underlying forces of high population growth and low house building have not been addressed

westernpromise

I would note that the crash wishers need to define someone as being in opposition to themselves. Because they want something that they expect will provide them a financial reward, it's important that those funding this anticipated reward be demonised and dehumanised as worthy of hatred, so they can feel better about the selfish greed they are exhibiting. There's no evidence that landlords' view of and hopes for the housing market are based on wishing anyone else ill, but the views of crash trolls most certainly are.

This is why they rage against what they call "boomers" and BTL landlords, and accuse them of wanting and indeed causing price rises. Of course in reality they are just people who did in the past what crash trolls want to do today. It's also why crash trolls often pose online as homeowners who are angry about the high value of their home and altruistically wish their house were lower for the benefit of others, though never enough to do the obvious and sell it for what they paid, of course.

Crashy_Time

westernpromise wrote: »

I would note that the crash wishers need to define someone as being in opposition to themselves. Because they want something that they expect will provide them a financial reward, it's important that those funding this anticipated reward be demonised and dehumanised as worthy of hatred, so they can feel better about the selfish greed they are exhibiting.

This is why they rage against what they call "boomers" and BTL landlords, and accuse them of wanting and indeed causing price rises. Of course in reality they are just people who did in the past what crash trolls want to do today. It's also why they often pose online as homeowners who are angry about the high value of their home and altruistically wish their house were lower for the benefit of others, though never enough to do the obvious and sell it for what they paid, of course.

Property prices were artificially inflated due to too much cheap credit and a concerted media campaign for the benefit of the banks which led to a giddy and thoughtless sentiment towards property, especially BTL. These inflated prices have been kept afloat (just) with a bubble on top for London by massive central bank intervention, but at much lower sales volumes. All I want is for the average person to be able to buy a liveable house/flat for about three or four times their salary, and not expect to sell it for much more. Not too much to ask, and not too difficult to understand? Many crash deniers get themselves all worked up simply because they swallowed too much bait, and are now hopelessly over-leveraged, therefore they try to make all sorts of wild claims about people who just want a sensible outcome for themselves and society. To all those who still think the bubble won`t pop big time I say..... let`s just sit back and watch the show......:money:

cells

Crashy_Time wrote: »

Property prices were artificially inflated due to too much cheap credit and a concerted media campaign for the benefit of the banks which led to a giddy and thoughtless sentiment towards property, especially BTL. These inflated prices have been kept afloat (just) with a bubble on top for London by massive central bank intervention, but at much lower sales volumes. All I want is for the average person to be able to buy a liveable house/flat for about three or four times their salary, and not expect to sell it for much more. Not too much to ask, and not too difficult to understand? Many crash deniers get themselves all worked up simply because they swallowed too much bait, and are now hopelessly over-leveraged, therefore they try to make all sorts of wild claims about people who just want a sensible outcome for themselves and society. To all those who still think the bubble won`t pop big time I say..... let`s just sit back and watch the show......:money:

But half the country is already about 4x wage or less so how does that fit into the bubbles prices need to fall?

Crashy_Time

cells wrote: »

But half the country is already about 4x wage or less so how does that fit into the bubbles prices need to fall?

Why have sales volumes not come back if that is the case?

westernpromise

Crashy_Time wrote: »

Why have sales volumes not come back if that is the case?

Because transaction costs are too high. SDLT makes the cost of a scarce thing higher. In the south the SDLT can exceed the cost of an extension large enough to make a house move unnecessary.

I don't understand why you think houses should return to 1970s salary multiples. In the 1970s we are all poorer and there were fewer dual income households, Where there were, the wife was treated as a chattel, a line item on her husband;s tax return taxed at her husband's marginal rate. This is where the 3 + 1 x salary idea came from.

Crashy_Time

[QUOTE=westernpromise;69936273]Because transaction costs are too high. SDLT makes the cost of a scarce thing higher. In the south the SDLT can exceed the cost of an extension large enough to make a house move unnecessary.

I don't understand why you think houses should return to 1970s salary multiples. In the 1970s we are all poorer and there were fewer dual income households, Where there were, the wife was treated as a chattel, a line item on her husband;s tax return taxed at her husband's marginal rate. This is where the 3 + 1 x salary idea came from.[/QUOTE]


Nothing to do with house prices then?

westernpromise

Crashy_Time wrote: »

Nothing to do with house prices then?

I don't think so, no. High house prices ought to incentivise people to downsize, i.e. should stimulate rather than suppress activity. The evidence is that they aren't doing so; downsizers see a big chunk of money wasted on stamp duty and don't bother.

Someone in a million pound house in north London who wants a bigger house elsewhere in north London but also for a million pounds will pay £44k in stamp duty, £20k in agents' fees and at least £5k in other costs just to do the deal. This is before doing anything to the new house that it needs.

For the same £70k they could have an extension, an attic conversion, a new kitchen and bathroom, and probably a garden makeover in the current house. They end up with a more valuable house, they haven't even had to move and every penny spent added value.

So let's see. Spend £1.07 million to end up with a £1 million house fitted out to someone else's taste; or spend £0.07 million and end up with a £1.07 million house fitted out to yours? I know what I'd do.

cells

Crashy_Time wrote: »

Why have sales volumes not come back if that is the case?

are you disputing the indisputable fact that about half the country terrace stock is priced at about 4 x full time male income or less?

confirmation bias to the max


As for transaction volumes. Stamp duty as mentioned but also I think one of the reasons transaction levels are lower is that more people are opting to keep their starter homes when they move and rent them out rather than sell them on.

That would explain how the rental sector grew at 440,000 last year but BTL for purchase was closer to 100,000 indicating more than 300,000 cash/equity purchases (or transfers)

HornetSaver

cells wrote: »

are you disputing the indisputable fact that about half the country terrace stock is priced at about 4 x full time male income or less?

In other words, somewhere approaching - or possibly surpassing - a majority of terraced houses (I.e. housing specifically targeted towards families on modest-to-average earnings) is unattainable for median earners? And that because of the geographic differential, in some geographically large areas of the country almost all are unattainable?

Stamp duty as mentioned but also I think one of the reasons transaction levels are lower is that more people are opting to keep their starter homes when they move and rent them out rather than sell them on.

Poor choice of phrase (I presume you mean "first home" rather than "homes bought under the government scheme in the last year or so"), but that seems a bit of a stretch. Yes, it's a financially efficient way of doing things, but the typical pattern is:

1. Buy whatever first home you can afford (what you refer to as a starter home)
2. Upsize to appropriate house when able.

Most people with the financial means to do as you suggest would probably have bought the correct sized house in the first place, and subsequently purchase the smaller one to let, I'd have thought?

Getting back to the thread