Buyers - wait till April for real bargains

dolce_vita

scope wrote: »

A drop in asking price doesnt mean a drop in house prices. I bought my house in March and have followed the market ever since. That includes rightmove and houseprices.co.uk, and am amazed prices are still going up. It seems prices have gone up about 20k in the last 6 months.

This is the price drop of the highest drop property in my area:

08 Jul 2007First day listed (price £410,000)08 Jul 2007Price changed from £299,995 to £315,000 08 Jul 2007Price changed from £350,000 to £410,000 08 Jul 2007Price changed from £315,000 to £350,000

Doesnt really seem right, does it? I'd take the numbers on propertysnake with a pinch of salt. Its showing as down 26% from 410k to 299k, but it all happened in the same day.. eh?

This poster gets my vote for the "stupidest person of the week award"

scope

dolce_vita wrote: »

This poster gets my vote for the "stupidest person of the week award"

LOL, why is that? Im just telling you what I am seing in MY area, prices have not gone down - and I have kept an eye on prices (sold and asking) over the past year.

And for the person who asked if it would be a problem if prices went down? Absolutely not - I have enough equity in the house to see prices tumble, and its not an investment, but our family home, so we are here for the long term. In fact if prices went down I would probably buy a second house for our kids, with todays prices I couldnt...

EdInvestor

Doc_N wrote: »

On 6 April 2008 the recently announced Capital Gains Tax changes take effect. From that date second/third etc home owners get a very large cut in the CGT they have to pay on the sale of a property.All the tax planning advice is telling them to wait until 6 April before selling, to minimize their CGT.

If they heed that advice, (and some of them won't be able to wait that long before bailing out) April is going to see another huge flood of BTL houses on the market.

Anyone who has obtained a large capital gain on their BTL such as to need to minimise CGT will have bought it a few years ago on a much lower mortgage and is thus unlikely to be a forced seller.Forced sellers indeed are unlikely to have made a capital gain at all.

The CGT change could however increase the number of new investors coming into the BTL market as it's now a significantly more attractive investment for higher rate taxpayers.

Doc_N

EdInvestor wrote: »

The CGT change could however increase the number of new investors coming into the BTL market as it's now a significantly more attractive investment for higher rate taxpayers.

Rents that don't cover costs, and an underlying asset that's falling in value? I don't think there are many 40% taxpayers who'll see that as much of an opportunity. Losses are losses, whatever the tax rate.

EdInvestor

Doc_N wrote: »

Rents that don't cover costs, and an underlying asset that's falling in value?

That's not the case in all areas or with all properties, though it's not as easy as it was. However don't forget people are using BTL as a substitute for a pension so they may not mind contributing a bit if necessary.Over the long term, values are still likely to rise so the CGT cut is welcome.

silvercar

Red_Cat wrote:

If my understanding of tax law is correct, within two years of owning an additonal propery, you have to declare one as your main residence. So a good strategy, for a seller would be to declare the second property as the main residence and sell without CGT liability at all.

That works well if the property is empty. You cannot declare a property that is tenanted to be your main residence.

michaels

m00m00 wrote: »

most of the people who will be struggling in BTL are the recent entrants who won't benefit from taper relief to any great extent.

the people who would gain most from taper relief are the people who will have bought before the current bubble, and the rents they are getting will certainly easily cover the mortgages and more, in most cases.

I may be being thick but the original post talked off more sales after the end of taper relief / reduction in CGT rate. Now you are saying it is recent purchasers who will all sell when they have less CGT to pay because they have made no profit...but if they have made no profit how can cgt be an issue? Whereas those who have held for a while and made good capital gains will hold on to their properties so that when they do do come to sell they have to pay more CGT on an almost certain profit?

poppy10_2

dolce_vita wrote: »

This poster gets my vote for the "stupidest person of the week award"

Why?

Maybe I'm stupid too, but I don't get it.

silvercar

Max taper relief was a reduction to 60% of the gain, for higher rate tax payers (or for those whose gain made them higher rate payers on this gain) the pay rate was 40% on this 60% gain ie 24%. The new rate will be 18%, so an automatic saving.