Thank Goodness Brexit will not halt immigration

kabayiri

We will be lucky if we get to 2050 without some form of war or major pandemic IMO.

It's not really worth worrying about whether your bed-box has a view of the garden.

Malthusian

triathlon wrote: »

There is no doubt in my mind that we are going a little more Japanese in the coming decades

No sex, no drugs, no wine, no women, no fun, no sin, no you, no wonder it's dark?

Sounds like something Remainers would put on the side of a bus.

MisterMotivated

MobileSaver wrote: »

Put it another way, if tomorrow we banned "foreigners" from buying UK property do you honestly think the country would somehow become "wealthier?"

Not make us wealthier but stop us becoming poorer. Plenty of countries have banned foreign property ownership as it helps ensure that homes - which obviously can't be boxed up, sent to the nearest port and exported to Asia/Middle East/wherever - are more affordable to local residents. Even China limits foreign buyers to one property, which must be for your residential use .

But, if it's solely outright wealth you and Triathlon are interested in, why don't we just sell every single house in the country to Saudi Arabia, China, UAE and whoever else wants a piece? Then we'll all have plenty of money to slowly give back to them in rent payments.

Your assumption seems to be that 100% of foreign owners will "in the long term" sell at a profit and then remove 100% of that profit out of the UK back to their homeland.

What else would they do? They may hold onto it for years, even decades, but the ultimate intention is to protect/grow their wealth, by either selling it at a profit and/or using it to generate rental income. Are you suggesting that they'll altruistically sell a flat in London at half the price they paid for it to a local buyer, then perhaps donate some of the money to the local hospice? They don't use local facilities so make little contribution to the local economy.

• Non-resident property owners don't shop at the local (UK) supermarket/retail park/high street.
• Non-resident property owners don't go to the local (UK) theatre/museum/art gallery
• Non-resident property owners don't buy their cars from the local (UK) Mercedes dealer
• Non-resident property owners don't drink at the local (UK) pub
• Non-resident property owners don't work out at the local (UK) gym

you seem to be suggesting that in 100% of cases that profit will be sufficient to cover all the upkeep, insurance and taxes paid on the property while under foreign ownership. It's nonsensical.

At no point did I suggest anything close to that. The cost of running the property will be the same regardless who owns it. But those costs will mostly be paid for by the tenant of the property, not the foreign owner. Similarly such costs have no relation whatsoever to the purchase or sale price. My argument is against it being implied that the house would not exist without the 'extra investment' from a foreign buyer. Of course it would; it would just be bought by a local instead.

MobileSaver

MisterMotivated wrote: »

• Non-resident property owners don't shop at the local (UK) supermarket/retail park/high street.
• Non-resident property owners don't go to the local (UK) theatre/museum/art gallery
• etc.

Well some do actually; you are confusing non-resident with never-visited.

non-resident (adj): A non-resident person is someone who is visiting a particular place but who does not live or stay there permanently.

MisterMotivated wrote: »

At no point did I suggest anything close to that.

You suggested exactly that by stating all the profit gets taken out of the country; if all the profit is not removed from the UK then there must be extra wealth for the country.

MisterMotivated wrote: »

The cost of running the property will be the same regardless who owns it.

Correct but as there are more properties thanks to foreign investor demand there are obviously more property costs hence "extra wealth" for the UK.

MisterMotivated wrote: »

But those costs will mostly be paid for by the tenant of the property, not the foreign owner.

Even if you are right about "mostly paid by the tenant" that still means some is paid by the foreign owner hence again not all the profit is removed from the UK so the UK does benefit.

The only way that the UK would not benefit from "extra wealth" is if 100% of the profits were removed and even you seem to admit that that is not the case. QED.

MisterMotivated

MobileSaver wrote: »

Well some do actually; you are confusing non-resident with never-visited.

Semantics, but even non-resident occasional visitors aren't a massive boon for the UK economy. I refer you to posts #2 and #3, which were the reason for my original comment.

movilogo wrote: »

There are people who own properties in UK who need visas to visit UK or never visited UK.

triathlon wrote: »

Nothing wrong with that, property like anything else is business pure and simple. Thank goodness they are investing in our country, I welcome the extra wealth

You suggested exactly that by stating all the profit gets taken out of the country; if all the profit is not removed from the UK then there must be extra wealth for the country.

Might want to read some books on business; profit is what is left after the costs (including landlord insurance, repairs, etc that the owner has responsibility for) have been paid. Therefore it is quite possible for all the profit to be removed after the landlord pays a number of bills related to the upkeep. Even if the landlord occasionally visits the UK and spends some of his profit on a Harrod's shopping spree, he's spending (profit) money that came from UK residents initially, not bringing extra money into the country.

Correct but as there are more properties thanks to foreign investor demand there are obviously more property costs hence "extra wealth" for the UK.

The demand from foreigners moving here is small, and not what I'm talking about. The demand from UK citizens will always be the same, i.e. dependent on the population of the country. Houses can't be boxed up and exported, they can only be used in this country by people in this country.

Even if you are right about "mostly paid by the tenant" that still means some is paid by the foreign owner hence again not all the profit is removed from the UK so the UK does benefit.

See above; the costs of running a business are not profit.

The only way that the UK would not benefit from "extra wealth" is if 100% of the profits were removed and even you seem to admit that that is not the case. QED.

Investor buys flat for £450,000 = £450,000 IN to the UK economy


Tenants rent flat for many years, paying rent to investor totalling £90,000 = £90,000 OUT of the UK economy
During rental time, investor pays bills totalling £35,000 = £35,000 IN to the UK economy

Investor sells flat to local buyer for a £1 profit at £450,001 = £450,001 OUT of the UK economy.

Let's do some sums
£450,000 + £35,000 = £485,000 IN
£90,000 + £450,001 = £540,001 OUT
= net loss to UK economy of £55,001

phillw

MisterMotivated wrote: »

Plenty of countries have banned foreign property ownership as it helps ensure that homes - which obviously can't be boxed up, sent to the nearest port and exported to Asia/Middle East/wherever - are more affordable to local residents.

I don't see that happening here, our economy is too reliant on free flowing of capital. Someone would set up a financial instrument where a UK company owns the property, which the foreigner buys into.

phillw

MisterMotivated wrote: »

Plenty of countries have banned foreign property ownership as it helps ensure that homes - which obviously can't be boxed up, sent to the nearest port and exported to Asia/Middle East/wherever - are more affordable to local residents.

I don't see that happening here, our economy is too reliant on free flowing of capital. Someone would set up a financial instrument where a UK company owns the property, which the foreigner buys into.

You can't take back control without destroying the economy completely.

MobileSaver

MisterMotivated wrote: »

Semantics

No, not semantics; you are trying to move the goalposts because you have realised you were simply wrong. First it was "foreign owned" then "Non-resident", next "foreigners who never come to the UK" and finally you're now implying you only meant "foreigners who never come to the UK and rent out their property to others and the others are exclusively UK residents." Keep digging that hole!

MisterMotivated wrote: »

non-resident occasional visitors aren't a massive boon for the UK economy.

"aren't a massive boon" is not the same as "does not bring 'extra wealth'." Thank you for confirming that you were wrong and that they do bring extra wealth to the country.

MisterMotivated wrote: »

Might want to read some books on business; profit is what is left after the costs (including landlord insurance, repairs, etc that the owner has responsibility for) have been paid.

As a businessman I don't need to read up on profit/costs but clearly you do! :rotfl:

Those costs for the foreign owner are income/profit for (almost certainly) UK businesses! Yet another example of foreign owners generating "extra wealth" for the UK.

MisterMotivated wrote: »

Therefore it is quite possible for all the profit to be removed after the landlord pays a number of bills related to the upkeep.

Yes it is possible but for your assertion that "being foreign owned does not bring 'extra wealth' to our country" to be true that would have to be true in 100% of cases. Clearly that's nonsense.

MisterMotivated wrote: »

landlord ... spending (profit) money that came from UK residents initially, not bringing extra money into the country.

So again, you're claiming that in 100% of cases foreign owners rent out the property and in 100% of cases they only rent to UK residents as that's the only way they can not be bringing extra money into the country.

MisterMotivated wrote: »

Tenants rent flat for many years, paying rent to investor totalling £90,000 = £90,000 OUT of the UK economy

Quite apart from you've ignored the 20% tax deducted at source for non-resident landlords (which, guess what, is paid into the UK's coffers), you are talking about a specific case of foreign ownership. You are also assuming wrongly that all foreign owners either buy with cash or else use non-UK mortgages.

phillw

MobileSaver wrote: »

Quite apart from you've ignored the 20% tax deducted at source for non-resident landlords (which, guess what, is paid into the UK's coffers),

Also the VAT on the maintenance of the property and any management fees (assuming a foreign owned property will employ the services of a property management company).

The biggest problem appears to be that foreign buyers have money and that isn't fair, but maybe it would have made sense to vote in the referendum for the outcome that would have given you more money.

I don't see the difference between a foreign buyer and someone who sells up their BTL portfolio and retires abroad.

MisterMotivated

MobileSaver wrote: »

No, not semantics; you are trying to move the goalposts because you have realised you were simply wrong.

The goalposts haven't moved at all:

movilogo wrote: »

There are people who own properties in UK who...never visited UK.

triathlon wrote: »

Nothing wrong with that...I welcome the extra wealth

MisterMotivated wrote: »

What extra wealth

I've always been talking about foreign owners who have rarely/never visited the UK.

"aren't a massive boon" is not the same as "does not bring 'extra wealth'." Thank you for confirming that you were wrong and that they do bring extra wealth to the country.

So perhaps saying 100% was inaccurate; maybe 99.9% would've been better. In terms of people who buy holiday homes here; they may contribute a tiny amount while they own the property and visit our shores, but who's to say they wouldn't holiday in the UK regardless and just stay in a hotel each time (bringing more wealth)? The rest of the time, they have an empty house taking up valuable land in this country, which they'll eventually sell on at a profit, effectively giving them free accommodation on every trip during their ownership and a profit to offset their holiday spending.

As a businessman I don't need to read up on profit/costs

So why is it you fail to understand that profits obtained from renting to people in this country are generated by taking rent money from people in this country and therefore do not contribute extra wealth to this country? They simply redistribute a portion of the wealth that was already here and extract the rest.

Those costs for the foreign owner are income/profit for (almost certainly) UK businesses! Yet another example of foreign owners generating "extra wealth" for the UK.

Income for UK businesses paid from profits earned at the expense of their UK tenants - again, no extra wealth into the country.

Quite apart from you've ignored the 20% tax deducted at source for non-resident landlords (which, guess what, is paid into the UK's coffers), you are talking about a specific case of foreign ownership. You are also assuming wrongly that all foreign owners either buy with cash or else use non-UK mortgages.

As were movilogo and traithlon. Any profits made from renting to someone in the UK will cover any income tax owing. Unless of course they run the business at a loss, though, no profit = no tax. In the case of those who simply buy and hold to sell on in future, they're highly unlikely to sell for less than they paid, even if they do take out a UK mortgage!