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Current property owner and first time buyer - help to buy conflict

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Comments

  • Goldcrypto
    Goldcrypto Posts: 104 Forumite
    haras_nosirrah wrote: »
    One other slight issue with your plan. Most lenders will not accept a gift from a non bloodline relative and those that do would not allow the giftor to move into the property.

    She would have to use the money from elsewhere - your brother can't gift her the deposit

    Not something they are going to consider. She has her own funds without needing and they would like a clear legal structure of ownership. Plus brother ideally needs to remortgage to release some equity.

    Plan so far is finding under market value property ideally 15% or so with contacts in that market or making competitive offers to offset any extra costs. They would just buy normally as a joint mortgage that they could get competitive rates with a decent down payment anyway.
    'Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway'

    W Buffett
  • studentguy
    studentguy Posts: 188 Forumite
    Goldcrypto wrote: »
    With me? Why would I be the problem (although I completely disagree the claim that some small number of people like my brother owning 1 property investment alone are the problem).

    Of course you don't think your brother is the problem, it's always someone else. Newsflash, your brother is contributing to the problem - of course I have no problem with that, providing he pays the extra stamp duty he rightfully should pay. If he tries to play the game to avoid it, then I have a problem.
    Goldcrypto wrote: »
    So you feel my brother should never have got on the property ladder as an investor with one property? As he could not lay down roots with a primary residence. So not doing so, he should have waited , god knows how many years until he knew gain he was going to be based in London and not out of UK, and in that time he should have continued working hard and saved cash earning no interest in the bank while London property prices continue to skyrocket (overseas investors flooding in!) so he is priced out of the market when he comes to buy? Or you and others did not think about that? In the meantime it allowed him to get into the property market and provided a service as a landlord for other professional people to live there.

    Firstly I don't think you understand how fortunate your brother is - most people can't afford to buy an investment property while they go do other things, so he's had a headstart. So he can either move in to his house, or buy another and pay the extra stamp duty.
    skyrocket (overseas investors flooding in!)
    I'd much rather an oversea investor who pays the correct stamp duty than a British person trying to fiddle it, thanks.
    provided a service as a landlord for other professional people to live there.

    You could argue that if he hadn't have bought it, another professional person could have bought it - but that's neither here or there, he's not a landlord for some social purpose, he's making good money out of them, so don't try and spin it into some kind of philanthropy.
    The property was not left empty like many overseas investors buying bulk properties in London and now other major UK cities. Many of those overseas investors have no interest to rent out as they are simply looking at storing their assets in a stable market and possibly looking for capital growth only with no interest rental yield. Those are the problems foe the UK property market. Vast empty residential buildings that could be used. It is overseas investors and those with vast property portfolios the government should be looking at controlling more. Not the hard working British person or retired couple who manages to get themselves into a position to buy just 1 other investment property for their retirement, plan to pass on in their family or rent out and provide a useful service. Some level of investment is healthy for real estate market.

    Look over there, those people are much worse!! Don't look at me and my family. Frankly I don't care what nationality you are as long as you pay the correct taxes. Secondly, your brother isn't exactly a hard working struggling to put food on the table person, he works in the city, so stop with the 'poor little him' act, it's not washing.
    Some level of investment is healthy for real estate market.
    No, not at the moment when we don't have enough houses it's not - you're just making the problem worse. Again, I don't mind as long as you pay the correct tax (and stop moaning about having to do so) to offset it.
    The point is many of these posts (only a few have provided useful factual information to the question) are just irrelevant views of people and not helpful. Simply they had a question and best way is to offer a solution. So answers are they can do option A or option B or option C but can not do option D etc Simply outlining the solutions without any background views. They are two hard working British individual professionals who continue to make a lot of sacrifices for their time with their careers and savings so as 'Dave Ramsay' says they can 'live like no one else'.

    You've had the answers, and you complain as you don't like them. You're rude with people that don't give you the answers you want to hear. You expect us to find inventive ways that you can avoid paying tax, or using Govt incentive schemes that we all pay for, many people here are less well off than your brother and you expect us to pay for him to get incentives to be able to keep an investment property in London, which again most people here could only dream of being able to buy a property in London, while buying a second property for him to live in. These schemes are designed for people struggling, not for rich people to take advantage of. So yes, it's immoral. Your brother has been very lucky, he should acknowledge that and pay his fair share and not abuse the system.

    Secondly if you don't want peoples views, then don't post on a bloody forum.
    Despite my name, I'm not a student any more
  • Goldcrypto
    Goldcrypto Posts: 104 Forumite
    bowlhead99 wrote: »
    [long train commute today so here goes for a long post...]

    But you already have the basic options, outlined in your earlier paragraph which you called "1. ..." and "2. ..."

    While I agree with some points you raised, also these replies are more useful in the discussion than some others, let me also address where I disagree.

    This forum is not really an investment forum and probably many people are not from that pool set so in future not a place best used to brainstorm investment ideas - other real estate investment forums / private equity / hedge funds / alternative investments etc will be best for that. What this site is good for is general money saving tips, products etc.

    That aside, yes, so far those two options for them. With option 1, probably going to be best with them. It is straightforward, clear ownership, they will get a competitive joint mortgage with a good down payment, no need to worry about extra SDLT (is actually not a great deal more for value of properties they are looking at especially if a 10-15% below market property value is found then they come in ahead) as looking for a below market property easily offsets costs as they have plenty of time to research/make new contacts in that market etc, clear exit strategies regarding what they can choose to do in the future.

    OR they can buy like any 'normal' couple and pool their resources and get a joint mortgage for the property they'll jointly own and live in. If they do the joint purchaser thing, there won't be any incentives applicable to buying a first time property

    This is probably, what they will be doing. No government incentive but they can make their own property financing and market condition ' incentive ' by have solid down payment for best joint mortgage rates and a good discount to market value when buying. They will probably be better than any government options anyway.
    If the couple who are looking to do the buying are interested in a better solution, they can do some research and pay for professional advice.

    My brother his partner are both very bright, and certainly will not be sitting back just for me to pop a few suggestions. They will be speaking to friends, colleagues, other city professionals, property consultants in the target market etc. Just like any person looking for good advice, we brainstorm some options (there will be a lot of irrelevant or nonsense advice in that process) and extract the relevant / beneficial points while disposing in the trash the other. If you want to be a successful doctor then you do not ask advice from your neighbour, family member, friend or group of people with no medical knowledge or clear understanding of the field. Same as if you want to be a successful investor you do not ask people who are not already as chances are they do not know how or they would likely be in the position themselves earning more or with better assets etc - you study those already achieving it to see what habits and methods they are applying or ask their advice.

    none of us have a vested interest in helping you structure a transaction to get around the pesky restrictions that the government have decided to impose on the various incentives (or lack of disincentives a the case may be)

    They were never looking to get around something, just consider what current options are available to them. For example each individual can only have one ISA - government incentive for people to save in a tax free savings package. However, there are other products out there that some may ask if they can also use while using the ISA. This is just another seeking advice for best way to structure the purchase for them.
    .
    You've tried to deflect the indignation on the thread by appealing to our xenophobia and saying that he is not some overseas investor, and you've tried to appeal to our common decency by mentioning that the couple are both hardworking - and presumably do not need to be ashamed of having savings and investments accumulated over time.

    It had to be highlighted that they made their positions through hard work and no doubt have another 25-30 years of hard work ahead. They are making sacrifices of time and this had to be highlighted to the nonsense of some of these replies. Regarding your claim of 'xenophobia' , that could not be further from the truth. For a start my family has both a mix of English and American. Plus his girlfriend is British American! I am not against some levels of foreign investment in the UK. It is very healthy both in commercial market and some levels in the residential market. Many London new residential complexes would probably not been built without it. However, there is a distinction when we get floods of overseas investors with portfolios of 20+ or so and leaving them empty. In comparison to a British individual investor with 1 property investment or a retired couple with 1 for their pension plan that are actively renting out and providing a useful service for would be tenants etc.
    'Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway'

    W Buffett
  • marliepanda
    marliepanda Posts: 7,186 Forumite
    Either you are your 'brother' or this is an incestuous level of creepy involvement in someone elses life...
  • Goldcrypto
    Goldcrypto Posts: 104 Forumite
    studentguy wrote: »
    Firstly I don't think you understand how fortunate your brother is - most people can't afford to buy an investment property while they go do other things, so he's had a headstart.

    People often make their own circumstances. Most of his has come from his own hard work, many years of study, studying a useful subject that adds value to a service he can be rewarded for his skills. Hard work, sacrifices and saving to invest. Becoming a property investor became about by a lack of stability in overseas travel so could not anchor foundations as most young people aim to do with their home. By not investing in a property a decade ago could have likely priced him out of the London market today (seriously limited his options), and he would have been a fool for doing so. The only smart option was to get in the real estate market and people like you thinking he is part of the problem are deluded. News flash, if every property investor left London, all properties would not be bought up by first time buyers. Every city needs a healthy balance of residential properties for a rental market. Some people do not want to buy, not out of lack of choice but like the freedom of moving to different properties and having a service where they are not responsible for maintenance and repairs etc. While investing their money in other assets besides just choosing to invest in a home. Simple real estate economics.

    Now if you had chosen a decent subject to study, spent less time complaining on here, then you might have a better investment action plan.

    I'd much rather an oversea investor who pays the correct stamp duty than a British person trying to fiddle it, thanks.

    Nobody is trying to avoid not paying anything. Also unlike UK buyers, many overseas buyers capital sources are much harder to determine. You may want to open your mind and be a little more concerned about that, next time you hear a Russian buying up £20 million of London real estate.

    he's not a landlord for some social purpose, he's making good money out of them, so don't try and spin it into some kind of philanthropy.

    He was offering a service and the tenants received a service - a home, managed and maintained. What is your problem with that? What is the problem with making money?

    You're rude with people that don't give you the answers you want to hear.

    No, just find it pointless people adding their 2 cents that is unrelated nonsense and nothing to do with the question. You are a prime example.
    You expect us to find inventive ways that you can avoid paying tax,

    Repeat, nobody is looking at not paying what needs to be paid!
    Secondly if you don't want peoples views, then don't post on a bloody forum.

    Relevant views to a question. Yes, we have established this is not an investment forum as per se. Despite, some have gladly provided advice or tried to be constructive.
    'Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway'

    W Buffett
  • PersianCatLady
    PersianCatLady Posts: 622 Forumite
    Goldcrypto wrote: »
    Glad you enjoyed, but are you a real estate lawyer or successful real estate investor that has input to the actual question?

    Regarding my views, they are irrelevant as the current legislation is in place - these do change so will see what happens in the future. Also, my view on this issue about property investment and implications for SDLT and help to buy are not solely focused on him but should apply to every UK citizen. I personally feel they should have the opportunity (if they are in the position to do so) to be able to get assistance on first residence property and not have additional SDLT on second property purchase (as an investment). Not everyone wants to invest the majority in the stock market with main investments etc. Maybe you think it would be fair if he (or similar people) had a few million and had 10+ properties then he could set up a company for the properties and not have to pay additional SDLT and have access to superior lending options? The government seems to be squeezing the small investor and giving advantage to the big players. Personally, I do not think it is fair for the average hard working British Joe just trying to progress.

    Regardless of peoples current political views on UK real estate policies, I'm here looking for actual technical answers to address the question only. So lets not digress.

    I have a English law degree but I think you are confused about English law as you are using American terms in your posts.
  • studentguy
    studentguy Posts: 188 Forumite
    Goldcrypto wrote: »
    People often make their own circumstances. Most of his has come from his own hard work, many years of study, studying a useful subject that adds value to a service he can be rewarded for his skills. Hard work, sacrifices and saving to invest. Becoming a property investor became about by a lack of stability in overseas travel so could not anchor foundations as most young people aim to do with their home. By not investing in a property a decade ago could have likely priced him out of the London market today (seriously limited his options), and he would have been a fool for doing so. The only smart option was to get in the real estate market and people like you thinking he is part of the problem are deluded. News flash, if every property investor left London, all properties would not be bought up by first time buyers. Every city needs a healthy balance of residential properties for a rental market. Some people do not want to buy, not out of lack of choice but like the freedom of moving to different properties and having a service where they are not responsible for maintenance and repairs etc. While investing their money in other assets besides just choosing to invest in a home. Simple real estate economics.

    Now if you had chosen a decent subject to study, spent less time complaining on here, then you might have a better investment action plan.

    You have no idea about my personal circumstances thanks, I did choose a decent subject to study and I have a very good professional career earning way above the national average, not that it matters. I also am in the process of buying a decent sized house... soo I'd shut up about assuming things about other people.
    Nobody is trying to avoid not paying anything. Also unlike UK buyers, many overseas buyers capital sources are much harder to determine. You may want to open your mind and be a little more concerned about that, next time you hear a Russian buying up £20 million of London real estate.

    I don't understand why this is relevant. Stop diverting from your family's circumstances with other irrelevant examples.
    He was offering a service and the tenants received a service - a home, managed and maintained. What is your problem with that? What is the problem with making money?

    You're obviously incapable of reading. I have no problem with people making money, and fair play to him for doing so - but to imply he did it because of a social good which is what you implied originally is rubbish. I also have no problem with him having an investment portfolio if that's what he wants to do, but that comes with costs, such as the additional stamp duty. If he doesn't like it, he should just move into his house and keep one property.
    No, just find it pointless people adding their 2 cents that is unrelated nonsense and nothing to do with the question. You are a prime example.

    So you want our (taxpayers) money and incentives but you don't want our opinions... right.
    Repeat, nobody is looking at not paying what needs to be paid!

    Well in that case it's simple isn't it. Get them to buy a house together and stop worrying about Help to buy schemes and the additional stamp duty. The fact they're not doing that is why you are trying to avoid what needs to be paid.
    Despite my name, I'm not a student any more
  • Soundgirlrocks
    Soundgirlrocks Posts: 745 Forumite
    First Anniversary Name Dropper First Post Combo Breaker
    I'm just smiling thinking of all that lovely capital gains the Brother will have to pay when he eventually sells that wonderful London investment.:rotfl:
  • studentguy
    studentguy Posts: 188 Forumite
    Soundgirlrocks wrote: »
    I'm just smiling thinking of all that lovely capital gains the Brother will have to pay when he eventually sells that wonderful London investment.:rotfl:

    Don't worry Goldcrypto will be back asking how to avoid paying capital gains as it's unfair on people with 1 investment property which they've worked really hard to get, and everyone should be allowed to have 1 investment property don't ya know, poor little brother.
    Despite my name, I'm not a student any more
  • marliepanda
    marliepanda Posts: 7,186 Forumite
    studentguy wrote: »
    Don't worry Goldcrypto will be back asking how to avoid paying capital gains as it's unfair on people with 1 investment property which they've worked really hard to get, and everyone should be allowed to have 1 investment property don't ya know, poor little brother.

    Someone died. The brother did not work hard!
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