Is house price inflation advantageous or a massive con?

andrewf75

economic wrote: »

are housing costs really that high? i dont think they are. even in london.

for people on average wages yes extremely high I would say

westernpromise

chucknorris wrote: »

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.

None of this stuff has had any appreciable effect on me. The 10% wear and tear was only for furnished, and the removal of the tax relief was trivial because my mortgage was only £3,000 a year. It's fallen following the interest rate reduction to 0.25% so I'm basically unaffected.

The thing about being in the £1 million rental property sector is that you get well-off professional tenants who can easily afford the rent. The risk of having three or four smaller properties with three or four lower rents is that you are economically dependent on the industry and employability of people like Crashy and Wind of Change, which is not a great place to be.

chucknorris

westernpromise wrote: »

None of this stuff has had any appreciable effect on me. The 10% wear and tear was only for furnished, and the removal of the tax relief was trivial because my mortgage was only £3,000 a year. It's fallen following the interest rate reduction to 0.25% so I'm basically unaffected.

The thing about being in the £1 million rental property sector is that you get well-off professional tenants who can easily afford the rent. The risk of having three or four smaller properties with three or four lower rents is that you are economically dependent on the industry and employability of people like Crashy and Wind of Change, which is not a great place to be.

TBH the loss of the wear and tear hasn't probably cost us that much either, but only because we are close to selling, so we will not be renewing items, other than white goods when they fail. in fact, after selling two properties this year, we have plenty spare furniture (we kept the best and gave away not so good furniture). Luckily they were plenty chest of drawers going spare, to store the unicorn food in.

economic

andrewf75 wrote: »

for people on average wages yes extremely high I would say

average includes those who have immigrated to this country from poor countries with next to nothing in wealth. average includes those who chose to work part time or retire early. average includes many poor people on benefits.

average is an irrelevant measure when looking at property affordability.

andrewf75

economic wrote: »

average includes those who have immigrated to this country from poor countries with next to nothing in wealth. average includes those who chose to work part time or retire early. average includes many poor people on benefits.

average is an irrelevant measure when looking at property affordability.

Ok, fair point, but I don't think the situation looks any better when you look at full time long-time resident workers in fields such as nursing, teaching or similar. The key to affording a home for many is their parents property wealth, which of course divides the country into those who have that and those who don't.

But again I don't think everyone should be able to afford to buy. I just think rents badly need capping and people who rent need more security. There is a world of difference between renting in the UK and in the rest of Europe and that is why people are desperate to buy here.

westernpromise

economic wrote: »

average includes those who have immigrated to this country from poor countries with next to nothing in wealth. average includes those who chose to work part time or retire early. average includes many poor people on benefits.

average is an irrelevant measure when looking at property affordability.

Even including all those people affordability is still pretty good. The average house is worth about £200k but it has average equity of £90k in it and the mortgage of £110k is being served by an average of more than one average salary of £27k. So the economics are not especially onerous.

If you want to buy such a place on one salary with no savings you are S.O.O.L., but then you always were.

Crashy_Time

westernpromise wrote: »

None of this stuff has had any appreciable effect on me. The 10% wear and tear was only for furnished, and the removal of the tax relief was trivial because my mortgage was only £3,000 a year. It's fallen following the interest rate reduction to 0.25% so I'm basically unaffected.

The thing about being in the £1 million rental property sector is that you get well-off professional tenants who can easily afford the rent. The risk of having three or four smaller properties with three or four lower rents is that you are economically dependent on the industry and employability of people like Crashy and Wind of Change, which is not a great place to be.

http://www.telegraph.co.uk/investing/buy-to-let/buy-to-let-tax-changes-will-cost-20k-year-this-going-do/

westernpromise

Crashy_Time wrote: »

http://www.telegraph.co.uk/investing/buy-to-let/buy-to-let-tax-changes-will-cost-20k-year-this-going-do/

My mortgage used to cost me £3,728 a year. That was deductible at 45% so net I paid £2,050 on the mortgage.

This year my mortgage will cost me £3,006, thanks to my base-rate-linked 20-year tracker, on which I'll pay tax of I reckon £1,841.

I also had a "negative void" on renewal. One tenant gave notice, paid a month ahead but moved out after 2 weeks. Another moved in at the start of week 4, paying me again for that week. Week 3 I used for a repaint, and as I was doing this anyway, I waived the offer of £200 towards repair of picture hanging holes etc from the outgoing tenants.

It's so nice dealing with pleasant professionals and not angry, embittered scutters.

chucknorris

ilovehouses wrote: »

I got to this bit and decided he's got a first world problem - the best sort to have.

He can probably recover his his additional tax, by cutting down on the number of peacocks that he keeps on his estate.

Unfortunately desperate times require desperate measures!

Crashy_Time

westernpromise wrote: »

My mortgage used to cost me £3,728 a year. That was deductible at 45% so net I paid £2,050 on the mortgage.

This year my mortgage will cost me £3,006, thanks to my base-rate-linked 20-year tracker, on which I'll pay tax of I reckon £1,841.

I also had a "negative void" on renewal. One tenant gave notice, paid a month ahead but moved out after 2 weeks. Another moved in at the start of week 4, paying me again for that week. Week 3 I used for a repaint, and as I was doing this anyway, I waived the offer of £200 towards repair of picture hanging holes etc from the outgoing tenants.

It's so nice dealing with pleasant professionals and not angry, embittered scutters.

Why do you feel the need to post details that no one really cares about, day in day out, on a forum read by about six people on a good day?