[Politics] Spreadsheet Phil's Budget

[Tom Hark Preston Park]

That doesn't help solve the stock issue, it simply means more people could buy. In fact, I suspect that if house prices drop then we'd see fewer homes bring built.

All that said, the housing market in this country is soundly screwed - As long as we see our homes as vehicles of wealth creation and therefore obsess about owning them, we'll have a problem.

The wealth creation thing never used to be a thing. Most people just wanted to own their own home. Most still do.

 

[Tom Hark Preston Park]

How can it be justified to stop someone buying something?

How much do you think a £350K semi (typical price round here) needs to drop in price so someone on £20-25K a year (typical round here) can afford to buy? I'll tell you. About £275K. That's about 80%.

Stopping people buying and renting a property for £600-£800 a month (typical here) is not going to trigger the sort of readjustment you imagine.

And ironic you imagine market forces (readjustment) will automatically lead to a favourable outcome following your decidedly, centralist, socialist intervention.

Moreover what about all the multiple ownership now? If folk are forced to sell off their current rental stock they will not do so at knock down prices. Why should they? Unless you force them.

Why not go the whole hog and simply take money from the rich as a sort of readjusting windfall measure

Think post #40 - just down the road from you - says it better than I ever could.

 

[beorhthelm]

Would Absolutely Love It (said in a Kevin Keegan type voice) if budget measures forced landlords to wholesale ditch theiri 'Property Portfolio' so individual families can afford their own home. Ditch your Property Portfolio and get a proper pension like the rest of us instead of profiteering on the backs of others. Creeps.

who will provide rental property to those that dont want to or cant afford to buy?

 

[mikeyjh]

I am going to make a massive assumption that you live in an area where rents are relatively low. My 3 bed house in Sittingbourne costs me £950 per month. For reasons I don’t wish to go into here I am not able to get a mortgage but know for certain the cost to buy my house would have been considerably less per month.

I'm sure you're correct but (as you imply) every town and city will be different, in some places renting will simply be more affordable.

I looked at properties in Sittingbourne - One could buy a 3 bed semi in 'Spring Wood Park' for 275k, or rent one for £1,150 a month. If one happened to have a £35k deposit and borrowed £240k, you be looking at an introductory rate that would cost you about £1k a month which, on paper, fits what you're saying but it doesn't include all the other costs of maintaining a house. Once that rate reset to 4% or whatever, which is still historically very low, your mortgage repayments would be looking more like £1,300 a month. I know it's fag packet economics but my very original point is that a healthy rental market is no bad thing.

 

[Harry Wilson's tackle]

Think post #40 - just down the road from you - says it better than I ever could.

He said "I am going to make a massive assumption that you live in an area where rents are relatively low. My 3 bed house in Sittingbourne costs me £950 per month. For reasons I don’t wish to go into here I am not able to get a mortgage but know for certain the cost to buy my house would have been considerably less per month."

This doesn't answer my point at all. I said:

"How can it be justified to stop someone buying something?

How much do you think a £350K semi (typical price round here) needs to drop in price so someone on £20-25K a year (typical round here) can afford to buy? I'll tell you. About £275K. That's about 80%.

Stopping people buying and renting a property for £600-£800 a month (typical here) is not going to trigger the sort of readjustment you imagine.

And ironic you imagine market forces (readjustment) will automatically lead to a favourable outcome following your decidedly, centralist, socialist intervention.

Moreover what about all the multiple ownership now? If folk are forced to sell off their current rental stock they will not do so at knock down prices. Why should they? Unless you force them.

Why not go the whole hog and simply take money from the rich as a sort of readjusting windfall measure"

The fact of the matter is that unless you earn roughly 33% of the total cost of the property each year, you won't get a mortgage. Forcing people to sell rental houses they own, won't resolve that. In fact, if you like, [MENTION=33649]darkwolf666[/MENTION]'s comment shows that there is such a demand for rental properties that renters can charge a premium. [MENTION=33649]darkwolf666[/MENTION] is in a peciliar situation given he has the money to pay a monthly mortgage repayment (one assumes - since he is paying it) but cannot buy a property (for private reasons) that (according to his research) would cost him less a month to service than his current rent. Let us imagine that instead of £950 a month rent he was paying £800 a month mortgage. Yes, a big saving. BUT he would have had to have paid a deposit on any place he bought. Also, property is cheaper in Sittingbourne than in Faversham. Below is the cheapest 3 bed I can find in Sittingbourne:


https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION^1211&sortType=1
3 bedroom terraced house for sale
5 Cortlands Mews, Milton Regis, Sittingbourne, Kent
*Guide Price : £145,000 - £150,000 + Fees Public Auction at The Clive Emson Conference Centre : Monday, 29 October 2018, including Freehold Residential Investment Price Information *Guides are provided as an indication of each Seller's minimum expectation. They are not necessarily figures at...
Added on 05/10/2018 by Clive Emson Auctioneers, Maidstone
Clive Emson Auctioneers, Maidstone Logo
03339 391102
Local call rate

And in Faversham


https://www.rightmove.co.uk/propert...yDisplayPropertyType=houses&includeSSTC=false
£225,000
Guide Price
3 bedroom terraced house for sale
Minster Road, Faversham
A rare opportunity to acquire this spacious 3 bedroom Victorian home (formerly a shop), in need of renovation. CHAIN FREE.

Typical prices are MUCH higher. A mate of mine is selling a mid terrace 3 betroom victorian house in a cracking area, but house in need of total renovation, for £250K. If you had no house of your own to sell, you would need to be on £80K a year with at least £10 cash deposit to be allowed a mortgage on that.

I see absolutely no justification to specuate that if all landlords were forced to sell their rental property that the great mass of folk currently unable to buy would miraculously suddenly be able. Like I said, a typical £250K house round here would need to drop to around £60K for that to happen. AND curent landlords would have to be forced to sell their portfolio at the same loss. If that's socialism then I'm out.

Life is generally quite complicated and simplistic solutions to complex problems are usually wrong. Fact.

 

[vegster]

Jam! ........ Not tomorrow but hopefully eventually.

 

[Westdene Seagull]

I knew the Tories were tight but really ....

 

[pb21]

How can it be justified to stop someone buying something?

How much do you think a £350K semi (typical price round here) needs to drop in price so someone on £20-25K a year (typical round here) can afford to buy? I'll tell you. About £275K. That's about 80%.

Stopping people buying and renting a property for £600-£800 a month (typical here) is not going to trigger the sort of readjustment you imagine.

And ironic you imagine market forces (readjustment) will automatically lead to a favourable outcome following your decidedly, centralist, socialist intervention.

Moreover what about all the multiple ownership now? If folk are forced to sell off their current rental stock they will not do so at knock down prices. Why should they? Unless you force them.

Why not go the whole hog and simply take money from the rich as a sort of readjusting windfall measure

Well it can be justified if stopping someone buying something (whatever it is) benefits everyone else sufficiently because they can’t then buy it (whatever it is). There is then a net benefit.

In terms of your example a £350k property would likely require a deposit of ~£100k and a mortgage of £250k, based on two people buying on reasonable salaries. The mortgage level is fixed so whether or not you can afford it depends on your ability to stump up the deposit. If he price went down £50k (15%) to £300K the deposit would be half as much, making it much more likely for a couple to be able to afford. There is no need for 85% reductions.

Also if you limited the number of people who could buy a second property at £350k by preventing them buying, but increased the number who could buy at £300k, the price wouldn’t then go back up to the same level, as the people who can afford £300k can’t afford £350k. The price is determined by how much people are prepared to and can pay, not just the size of the market.

 

[darkwolf666]

I'm sure you're correct but (as you imply) every town and city will be different, in some places renting will simply be more affordable.

I looked at properties in Sittingbourne - One could buy a 3 bed semi in 'Spring Wood Park' for 275k, or rent one for £1,150 a month. If one happened to have a £35k deposit and borrowed £240k, you be looking at an introductory rate that would cost you about £1k a month which, on paper, fits what you're saying but it doesn't include all the other costs of maintaining a house. Once that rate reset to 4% or whatever, which is still historically very low, your mortgage repayments would be looking more like £1,300 a month. I know it's fag packet economics but my very original point is that a healthy rental market is no bad thing.

You have been quite selective with prices. I was talking from my own experience and can give specific examples.

The house I live in was bought for me to rent and cost £125000 in October 2012. 6 years later an identical house on the same road has sold for £235000. I would estimate of the 60 houses on my road probably 60%of them are rented as they can accommodate reasonable numbers of people (not just families).

This to me is where the problem lies - if you can’t get on the property merry go round you are shafted...

 

[darkwolf666]

So an extra 5.4% on the tax allowance at the lower end of the allowances and 7.87% at the top end of allowances.

Usual Tory fair then!

The rich get richer while the poor bump along at the bottom...

 

[boik]

So an extra 5.4% on the tax allowance at the lower end of the allowances and 7.87% at the top end of allowances.

Usual Tory fair then!

The rich get richer while the poor bump along at the bottom...

I'm sure I read a while ago that the proportion of the tax burden paid by rich people had been increasing over the last decade or so. Doesn't affect me as I'm too poor to pay tax.

 

[Weststander]

The country needs 4,000,000 new homes. That’s new units.

Concentrating on bullying or engineering BTL landlords to sell will create zero new homes. It will simply change the freehold title to some of them. (I own no other properties btw).

The country simply needs to get building, far more than it does currently, to start solving this housing crisis. Then market forces, the ability to raise rents above general inflation will dissipate.

 

[studio150]

Jam! ........ Not tomorrow but hopefully eventually.

But will it be before the best by date

 

[Weststander]

Well it can be justified if stopping someone buying something (whatever it is) benefits everyone else sufficiently because they can’t then buy it (whatever it is). There is then a net benefit.

In terms of your example a £350k property would likely require a deposit of ~£100k and a mortgage of £250k, based on two people buying on reasonable salaries. The mortgage level is fixed so whether or not you can afford it depends on your ability to stump up the deposit. If he price went down £50k (15%) to £300K the deposit would be half as much, making it much more likely for a couple to be able to afford. There is no need for 85% reductions.

Also if you limited the number of people who could buy a second property at £350k by preventing them buying, but increased the number who could buy at £300k, the price wouldn’t then go back up to the same level, as the people who can afford £300k can’t afford £350k. The price is determined by how much people are prepared to and can pay, not just the size of the market.

Using your figures, but knowing that a 20% deposit opens up many borrowing avenues.

£350k house - £70k deposit.
£300k house - £60k deposit.

The buyer has to find a similarly high deposit in either case. The value is the price paid.

The buyer

 

[pb21]

Using your figures, but knowing that a 20% deposit opens up many borrowing avenues.

£350k house - £70k deposit.
£300k house - £60k deposit.

The buyer has to find a similarly high deposit in either case. The value is the price paid.

The buyer

Yes you're right, you need a %ge of the total price as the deposit

But then that is what the Government have got with the 'help to buy scheme'. they offer up to 20% of the price of a new build in terms of a loan towards the deposit, for first time buyers. This helps those who struggle with the deposit and incentivises new homes to be built.

Still think though that limiting the number of people who can afford to pay more than the average person for a house, as an investment rather than a home, is a good thing.

 

[beorhthelm]

So an extra 5.4% on the tax allowance at the lower end of the allowances and 7.87% at the top end of allowances.

Usual Tory fair then!

The rich get richer while the poor bump along at the bottom...

good spot, the rich will be about £200 richer.

end of PFI only real headliner that wasnt already announced i think. tax on non-recyclable plastic positive if it doesnt just mean we all pay a bit more.

oh and the brexit 50p is real

 

[nicko31]

Jam! ........ Not tomorrow but hopefully eventually.[/QUOT

Indeed

If there’s a no deal Brexit today’s budget is irrelevance.

 

[Weststander]

So an extra 5.4% on the tax allowance at the lower end of the allowances and 7.87% at the top end of allowances.

Usual Tory fair then!

The rich get richer while the poor bump along at the bottom...

Because every £500 rise in the personal tax allowance costs many £B times that of a £500 rise in the basic/higher rate cut-off threshold.

Which is not a “top end allowance”. The top end thresholds for tax bands are at £100,000 and £123,700, where effective tax rates of 60% and 45% kick in.

 

[highflyer]

Because every £500 rise in the personal tax allowance costs many £B times that of a £500 rise in the basic/higher rate cut-off threshold.

Which is not a “top end allowance”. The top end thresholds for tax bands are at £100,000 and £123,700, where effective tax rates of 60% and 45% kick in.

Pretty clear who really benefits from these changes though:

 

[darkwolf666]

Because every £500 rise in the personal tax allowance costs many £B times that of a £500 rise in the basic/higher rate cut-off threshold.

Which is not a “top end allowance”. The top end thresholds for tax bands are at £100,000 and £123,700, where effective tax rates of 60% and 45% kick in.

Ok, my mistake using the phrase top end allowance. however the basis is still the same, the individual on the higher rate quoted, will individually be better if than the individual at the lower end of the tax rates. Your response only goes to further demonstrate that the rich "individually" will benefit more from this change.