Stamp duty 3% increase (2016 budget), and its effect on future house prices?

mystic_trev

http://www.cityam.com/236494/buy-to-let-tax-changes-a-perfect-storm-for-landlords-and-tenants?ITO=sidebar-the-forum

Thrugelmir

caronoel wrote: »

It can be no surprise that this will lead to a dramatic rise in rents and tax evasion, as happened when the Irish tried to introduced a similar tax grab in the late 90s.

HMRC have had a specialist unit targeting the sector for a while now. Some people are simply foolish given the penalties that are levied.

cells

CLAPTON wrote: »

Indeed, we should have built more in the past both for housing and general infrastructure and increased taxes to pay for all this:

however, today, we are where we are, and housing costs in London and the SE will continue to rise due to the numbers of immigrants.

Not much of a problem in parts of the north but the increase in immigration has a large negative impact on the young down south

why is it such a negative?

I know one family who very recently moved from London op-norf (actually the west midlands). They sold their home and all moved together pocketing over £500k from swapping their Hackney home to the new one. Im told most of that £500k was given to the kids (late 20s) to buy their own homes.

So the evil immigrants allowed this family to buy 4 homes and have some change left over and all they had to do was move a couple hours north. Dam those immigrants for allowing the kids of that ex-London family to buy homes mortgage free

cells

mwpt wrote: »

good news, it shows rents can go up 30% and still be within historic norms...

CLAPTON

cells wrote: »

why is it such a negative?

I know one family who very recently moved from London op-norf (actually the west midlands). They sold their home and all moved together pocketing over £500k from swapping their Hackney home to the new one. Im told most of that £500k was given to the kids (late 20s) to buy their own homes.

So the evil immigrants allowed this family to buy 4 homes and have some change left over and all they had to do was move a couple hours north. Dam those immigrants for allowing the kids of that ex-London family to buy homes mortgage free

Its a negative because it adversely affect young London born people
My concern is for people born and bred in the UK and not people born elsewhere.

pathtofreedom

mwpt wrote: »

Sorry but I this smells like bs to me. Where does the 20% figure come in? Were the landlords under-charging for years? The tax changes haven't even kicked in yet but landlords are getting their rent hikes in early (I know chuck did this).

We'll see how it works in the long run but I'm far from convinced that landlords can just pass all the costs on to tenants.

Not sure why you don't believe me but ok. As the changes come in from 2017 and onwards they were being given advance notice in a way, as that that is how they planned to recoup some of the money to make it still worth being a landlord.

One friend in particular the landlord has offered to sell him the flat, but as the flat needs a lot of work as the landlord hasn't maintained it that well, unless it is a good discount he's just looking at saving loads this year for his deposit and buying somewhere else.

Unless it says in the contract they won't raise the rent more than x% a year, then a landlord can put the rent up as much as they like as far as I know. I could be wrong though as I haven't rented for years, but I believe this is still how it works.

cells

CLAPTON wrote: »

Its a negative because it adversely affect young London born people
My concern is for people born and bred in the UK and not people born elsewhere.

well they were or are an Irish Family (do they count in your people born and bread in the uk?). I know that they have lived in London for more than 30 years and all the kids were born in London. Anyway the argument applies forget they are irish descendants

That household done very well out of the London immigrants pushing house prices up. They all now own a home each with no mortgage.
Most London families have benefited greatly from HPI even the yoof

Generali

pathtofreedom wrote: »

Not sure why you don't believe me but ok. As the changes come in from 2017 and onwards they were being given advance notice in a way, as that that is how they planned to recoup some of the money to make it still worth being a landlord.

One friend in particular the landlord has offered to sell him the flat, but as the flat needs a lot of work as the landlord hasn't maintained it that well, unless it is a good discount he's just looking at saving loads this year for his deposit and buying somewhere else.

Unless it says in the contract they won't raise the rent more than x% a year, then a landlord can put the rent up as much as they like as far as I know. I could be wrong though as I haven't rented for years, but I believe this is still how it works.

The landlord can but the rent up by as much as (s)he likes. The tenant can tell the LL to stick it and move elsewhere.

Rents will not rise by 20% plus inflation over the next 5 years. What will most likely happen is that rents will go up a bit and some tenants will seek alternatives such as cramming themselves into less or crappier space or buying instead of renting.

Landlords will meet some of the increased cost from tenants and some of the increased cost will come out of their profits.

Jason74

cells wrote: »

well they were or are an Irish Family (do they count in your people born and bread in the uk?). I know that they have lived in London for more than 30 years and all the kids were born in London. Anyway the argument applies forget they are irish descendants

That household done very well out of the London immigrants pushing house prices up. They all now own a home each with no mortgage.
Most London families have benefited greatly from HPI even the yoof

What you've done there, is take a single story , and extrapolate it to a conclusion that doesn't really hold water. I'm not disputing that the family you mention have done well from London HPI. I'm also not disputing that there is a significant minority that HPI has worked well for.

But "most", or even "a majority", not a chance. For starters, as you yourself point out, homeownership rates in London are only just over 50% and falling (a bad thing in and of itself of course), so that's close to half of Londoners who are worse off before we start.

And then we have the issue of how HPI impacts families across gnerations. Parents with a house that has gone up in value massively have done well on paper of course, but often at the huge cost of their children not being able to afford to buy a home anywhere near them. Now that's fine in the case of the family you describe, but many people would prefer to stay in the home they have been in ,and for their kids to be able to buy nearby.

London HPI makes that impossible in many cases, unless of course the parents are prepared to take on more debt at close to retirement age to fund their kids getting on to the property ladder. This does of course rather defeat the object of the gain in the first place.

London HPI has certainly been to the benefit of a lucky few. I know that, I'm one of them myself. But to suggest that it is on balance anything other than a bad thing for society is a long way wider of the mark.

mwpt

cells wrote: »

good news, it shows rents can go up 30% and still be within historic norms...

No, it shows caranoel's claim to be untrue. It's weird thats he read that HPC thread and came to the opposite conclusion.

Certain posters on here desperately want it to be true that a decrease in tax breaks for a relatively smallish set of landlords, the very highly leveraged landlords, who were always betting everything on black, can drive the entire rental market significantly.