Is house price inflation advantageous or a massive con?

GreatApe

Crashy_Time wrote: »

The 2008 situation has no bearing on todays situation.

You mean the 2008 crash where landlords bought 800,000 additional properties over 3 years has no baring on the future crash you day dream of most nights. No doubt

Any future crash will be different but it not at all easy to claim that the next crash will see the tenants buy up big houses for small money while the landlords all go crying to bankrupts court. That works in the collective fantasies of hpc I doubt it will become reality.

If only your tribe was half as smart as they think they are they wouldn't be in the meas they are in.

Waiting for a crash is stupid. Mortgage rates are about 2% while renters typical pay 6% rent. Over a five year period you need at least a 20% nominal crash (which would be more like a 30% real crash) just to break even. But they don't want to break even they want to be proven correct they want at least a 20% crash to make their sacrifice worthwhile. That means they need a 40% nominal (50% real) crash to just about make the decision worthwhile. It isn't going to happen they have already failed thanks to their collective group think and confirmation bias.

GreatApe

I've said this before, someone needs to invent house price crash insurance.

Charge 1% pa of the value of the house. If house prices are down more than 15% at year 5 the insurance will pay the difference if you sell. Would be like taking candy from a baby and it might save a few thousands crash cheerleaders from themselves

worried_jim

It's going good for me. I'm on track to slow down at 55 and will sell up in Brighton and move back to Leicester. I'll sell my two bed flat and buy a three bed detached house and somewhere in the Sun.

Crashy_Time

GreatApe wrote: »

Yes voids would make landlords sell up if they were excessive.
However in the south east the areas I know voids are small.
My voids are about 1% that is to say on average a property is only empty for 3-4 days of the year.
Or more accurately a tenant rents for about 5 years and then its empty for 2-3 weeks.

The additional taxes have put off some BTL purchases but also put off some BTL sales.
However it's nearly 1.5 years since the additional taxes were put in place. Yet during the last 1.5 years house prices haven't crashed in fact in a lot of the country house prices are higher than they were two years ago.

According to this it is about 5 months....?


http://www.section24.org.uk/landlord-tax/

Windofchange

Crashy_Time wrote: »

According to this it is about 5 months....?


http://www.section24.org.uk/landlord-tax/

Pretty much sums it up hey. This guy is a landlord we are lead to believe. What's a S24 will be the next question - some sort of new Audi?

GreatApe

Windofchange wrote: »

Pretty much sums it up hey. This guy is a landlord we are lead to believe. What's a S24 will be the next question - some sort of new Audi?

S24 was announced in 2015
W&T removal and the +3% stamp duty were put in place in April 2016

Glad to see the crash cheerleaders confirm their biases.

chucknorris

GreatApe wrote: »

S24 was announced in 2015
W&T removal and the +3% stamp duty were put in place in April 2016

Glad to see the crash cheerleaders confirm their biases.

It was obvious to me what you meant, i.e. that 'put in place' didn't mean implemented, merely scheduled, in fact, as the mortgage interest is being phased in over 4 years, and this is only the first of those years, it will be another 3 years before it will be fully implemented.

I've noticed that the bears tend to overlook the loss of the wear and tear allowance, this was not insignificant, and it had a more significant impact for us than the reduction in claiming mortgage interest as an expense, although that is because we have particularly low LTV mortgages. Also of course rather than an increase in tax, it is the loss of an over generous benefit. I wish that they had simply reduced it to a more realistic figure, say 3% (from 10%) as the change creates more admin for those that didn't elect to claim actual net replacement costs (the 10% was only an option to doing that anyway).

chucknorris

GreatApe wrote: »

Yes voids would make landlords sell up if they were excessive.
However in the south east the areas I know voids are small.
My voids are about 1% that is to say on average a property is only empty for 3-4 days of the year.
Or more accurately a tenant rents for about 5 years and then its empty for 2-3 weeks.

The additional taxes have put off some BTL purchases but also put off some BTL sales.
However it's nearly 1.5 years since the additional taxes were put in place. Yet during the last 1.5 years house prices haven't crashed in fact in a lot of the country house prices are higher than they were two years ago.

In over 26 years, and over multiple properties, we have never had a void, apart from one for 3 days, and that was just to suit the timescale of a friend that wanted to rent one of my properties. Although I have created my own voids to carry out periodical maintenance, like replacement kitchens and bathroom suites, and the like. I'm also not counting when selling after the tenant moves out, because it was my decision to sell rather than re-let.

But when doing my appraisals at the time of buying, I still used to factor voids in though, just in case (better safe than sorry).

Arklight

There is nothing more futile than having half your country employed in precarious poorly paid jobs, to rent temporary overpriced accommodation from the other half, who will use most of it to pay for care home fees.

The only people for whom hpi wasn't a con were those who cashed out when they were still young enough to enjoy it, and the bankers who've made a killing charging us to live on our own country.

chucknorris

Arklight wrote: »

There is nothing more futile than having half your country employed in precarious poorly paid jobs, to rent temporary overpriced accommodation from the other half, who will use most of it to pay for care home fees.

The only people for whom hpi wasn't a con were those who cashed out when they were still young enough to enjoy it, and the bankers who've made a killing charging us to live on our own country.

I don't understand why you think HPI is a con? It isn't as if you have been persuaded to invest into something that turned out to be a scam.

I also don't believe that the majority of people end up going into care homes, and even if they do, isn't it better to be able to purchase better care, than having to move into cheaper, less luxurious care homes?

Also it isn't just landlords who own BTL properties who benefit from HPI, it is also owner occupiers downsizing later in life, commercial property owners and those who invested in REITS (I have quite a bit invested there myself).