antony1969 Posted October 25, 2012 Share Posted October 25, 2012 Its official Dave Pelmets been shopping spending his stash , were out of the recession .......... or are we ? Link to comment Share on other sites More sharing options...
malc d Posted October 25, 2012 Share Posted October 25, 2012 antony1969 - 2012-10-25 6:33 PM Its official Dave Pelmets been shopping spending his stash , were out of the recession .......... or are we ? We MUST be if a computer programme says we are. ;-) Link to comment Share on other sites More sharing options...
Guest pelmetman Posted October 25, 2012 Share Posted October 25, 2012 Triple dip anyone? :D Link to comment Share on other sites More sharing options...
CliveH Posted October 25, 2012 Share Posted October 25, 2012 There are some encouraging signs. One interesting fact I saw yesterday is that European companies achieved less than 25% of their growth from countries outside the Eurozone in the late 1990's but last year that figure was up to 47%. This means that whatever the politicians in Euro la la la land say - the companies that exist within it have little faith in the "experiment" and are investing elsewhere. We are well placed - not being in the Eurozone - but we need to do a lot in the home market to get the recovery ball rolling properly. One thing that really does need sorting is the housing market - get that going and the trades within the UK will recover well. The big issue here is Stamp Duty - If they changed it so that the banding was not rate based to zero but banded like other taxes then the housing market would start moving. How can it be fair that a house sold for £120K the buyer pays no Stamp Duty but on one that costs £240K the buyer pays 1% ON THE WHOLE £240K! A whopping £2400 tax Then - if you get £250K for your house then your buyer pays 3% Stamp duty on the whole lot!! - that is a whopping £7500 in Stamp Duty Tax The middle section of house purchase is dead because of this tax. We need to have a tax that is 1% on the £125K to £249,999 and a further 3% on everything above £250K. That would be fair and acceptable. Until this is changed every business that is based upon or dependent on the housing market will be vulnerable. Link to comment Share on other sites More sharing options...
Mel B Posted October 25, 2012 Share Posted October 25, 2012 Stamp duty is an absolute joke, more like 'being held to ransom duty' ... I don't understand why it suddenly jumps from 1% to 3% anyway and, as you say Clive, why it is then chargeable on the WHOLE amount. For someone buying our place, say at £270k this is what the differences would be: With the current method it would cost: £8,100. It if was changed to Clive's method it would be: £1,850 0% on £0 to £125,000 = £0.00 1% on £125,00 to £250,000 = £1,250 3% on £250,000-£270,000 = £600 Total: £1,850 With my method it would be: £1,650 0% on £0 to £125,000 = £0.00 1% on £125,00 to £250,000 = £1,250 2% on £250,000-£270,000 = £400 Total: £1,650 Now you can see why the government won't be changing it any time soon!!! 8-) Link to comment Share on other sites More sharing options...
CliveH Posted October 26, 2012 Share Posted October 26, 2012 Totally agree Mel This tax is one of the main reasons the housing market is stagnant It is the classic case of where the tax is so harsh that it depresses the market it taxes such that the tax take is low. I believe the tax income from Stamp duty for the government would either stay the same or even increase if the tax is changed to how you and I set out because the market would recover. The housing market drives a number of other industries - which at the moment are in the doldrums exactly because this tax artificially depresses the market. Link to comment Share on other sites More sharing options...
Guest Peter James Posted October 26, 2012 Share Posted October 26, 2012 Cameron seems to be lurching from one crisis to another. The one bit of goods news - this claimed 1% increase in GDP, he even made to make a mess of that by announcing it early. What struck me was they admitted 0.2% was accounted for by Olympic ticket sales, which is a one off. But are tickets the only thing that visitors bought *-) Link to comment Share on other sites More sharing options...
Guest peter Posted October 26, 2012 Share Posted October 26, 2012 Wait till next month before you start breaking out the champagne. Then you'll see that it's just as bad as it has been for the last 2 Yrs +. Link to comment Share on other sites More sharing options...
Colin Leake Posted October 26, 2012 Share Posted October 26, 2012 One of our sons was considering changing house but when he worked out that then duty would be more than £80,000 he changed his mind and spent less than that on enlarging his existing house! Link to comment Share on other sites More sharing options...
Guest pelmetman Posted October 26, 2012 Share Posted October 26, 2012 Colin Leake - 2012-10-26 6:57 PM One of our sons was considering changing house but when he worked out that then duty would be more than £80,000 he changed his mind and spent less than that on enlarging his existing house! Sounds like he's got enough to retire on now Colin ;-)...................... Link to comment Share on other sites More sharing options...
Guest peter Posted October 26, 2012 Share Posted October 26, 2012 £80.000 stamp duty!. Where does he live, buckingham palace?. :D Link to comment Share on other sites More sharing options...
Brian Kirby Posted October 27, 2012 Share Posted October 27, 2012 Agreed stamp duty is onerous and unhelpfully structured, but a major impediment to sales? Surely the largest impediment to sales is the price of the property, not the tax on that price? I know it all adds fuel to the fire, but I don't think it is the main issue to worry over. Mortgage rules were relaxed to allow higher and higher multiples of salary. Self declaration of incomes was accepted. Dubious interest only packages were accepted. Then building societies ceased even holding the endowment/whatever as collateral. 120% mortgages were accepted. (Not all in that order!) The net effect seems to have been an excessive injection of cash into the housing market in general. That seems to have had the effect of causing land price inflation. That in turn seems to have persuaded the house builders to grow their land banks as a hedge against further inflation, so reducing the availability of land and increasing the price of the rest. Net result seems to have been that land is now so expensive developers will only build large, expensive houses. Then the crunch came, jobs were lost, incomes stagnated, mortgages became mainly repayment only, the policies backing the interest only packages failed to deliver, and although the interest rates fell, the societies/banks had no cash to lend, so could not lend. Meanwhile, those with mortgages are flirting with negative equity and insecure incomes. The increasing prices of houses merely placed even "starter homes" out of the reach of those they were aimed at, so sales fell, and the folk with houses stayed put. Sort of, perfect storm, one might say. Now, it seems the developers can't afford to develop their banked land to build lower cost property, because if they did, they'd lose on the land cost. I suspect that if the price of land were to fall (which IMO it badly needs to do), it would force a reappraisal of the value of those land banks, and a number of large housebuilders would suddenly find themselves bankrupt. Rather as happened with property bonds in the 70's. Simple truth, it seems to me, is that we all have wildly overvalued homes. Taking Mel's example of £270K (in Hull? :-)), a new house at that price would probably cost somewhere in the order of £100,000 to actually build, including its share of roads, drains, etc: the rest is land price, and planning and design, and marketing costs. On an estate, I'd be surprised if those costs would be much over £40,000 per house (guessing wildly, in truth I suspect much lower, too long since I had any reliable info), with the plot alone costing more than the house cost to build. Silly thing is, it does us no good anyway. Everything from a rubbish dump to a palace, via hospitals, schools, factories, offices, roads, railways, airports, farms, the lot, has its price inflated by the value of the land it sits on. That makes everything we buy more expensive, and every journey we make more expensive. It seems to me to be the most insidious price inflater, yet we tend to identify employment costs as the main cause of inflation instead, and pat ourselves on the back over the value of our property. We somehow need to buck this market, and get land prices down. I have not the faintest idea how, but if we are to be internationally competitive we need to lower our costs, and the price of all kinds of property cannot be excluded from that lowering. If the price of a house came down to within a sensible multiple of average earnings, the impact of stamp duty on sales, would be negligible and we should all, over time, become better off, and could all afford our homes. Due to lower land prices, houses in France are still sharply lower in price than in UK, and that follows through to all other land use associated costs. So, if France pays less for its property, it has more money to spend on other things, like TGVs, nuclear submarines, Sunday lunch - and bailing out Peugeot. All we seem to do in response is try to run faster, and take larger risks, instead of questioning this infatuation with expensive land, which takes us back, more or less, to my original point. :-) A'ternoon all! Link to comment Share on other sites More sharing options...
Guest Peter James Posted October 29, 2012 Share Posted October 29, 2012 Brian Kirby - 2012-10-27 5:03 PM Agreed stamp duty is onerous and unhelpfully structured, but a major impediment to sales? Surely the largest impediment to sales is the price of the property, not the tax on that price? I know it all adds fuel to the fire, but I don't think it is the main issue to worry over. Mortgage rules were relaxed to allow higher and higher multiples of salary. Self declaration of incomes was accepted. Dubious interest only packages were accepted. Then building societies ceased even holding the endowment/whatever as collateral. 120% mortgages were accepted. (Not all in that order!) The net effect seems to have been an excessive injection of cash into the housing market in general. That seems to have had the effect of causing land price inflation. That in turn seems to have persuaded the house builders to grow their land banks as a hedge against further inflation, so reducing the availability of land and increasing the price of the rest. Net result seems to have been that land is now so expensive developers will only build large, expensive houses. Then the crunch came, jobs were lost, incomes stagnated, mortgages became mainly repayment only, the policies backing the interest only packages failed to deliver, and although the interest rates fell, the societies/banks had no cash to lend, so could not lend. Meanwhile, those with mortgages are flirting with negative equity and insecure incomes. The increasing prices of houses merely placed even "starter homes" out of the reach of those they were aimed at, so sales fell, and the folk with houses stayed put. Sort of, perfect storm, one might say. Now, it seems the developers can't afford to develop their banked land to build lower cost property, because if they did, they'd lose on the land cost. I suspect that if the price of land were to fall (which IMO it badly needs to do), it would force a reappraisal of the value of those land banks, and a number of large housebuilders would suddenly find themselves bankrupt. Rather as happened with property bonds in the 70's. Simple truth, it seems to me, is that we all have wildly overvalued homes. Taking Mel's example of £270K (in Hull? :-)), a new house at that price would probably cost somewhere in the order of £100,000 to actually build, including its share of roads, drains, etc: the rest is land price, and planning and design, and marketing costs. On an estate, I'd be surprised if those costs would be much over £40,000 per house (guessing wildly, in truth I suspect much lower, too long since I had any reliable info), with the plot alone costing more than the house cost to build. Silly thing is, it does us no good anyway. Everything from a rubbish dump to a palace, via hospitals, schools, factories, offices, roads, railways, airports, farms, the lot, has its price inflated by the value of the land it sits on. That makes everything we buy more expensive, and every journey we make more expensive. It seems to me to be the most insidious price inflater, yet we tend to identify employment costs as the main cause of inflation instead, and pat ourselves on the back over the value of our property. We somehow need to buck this market, and get land prices down. I have not the faintest idea how, but if we are to be internationally competitive we need to lower our costs, and the price of all kinds of property cannot be excluded from that lowering. If the price of a house came down to within a sensible multiple of average earnings, the impact of stamp duty on sales, would be negligible and we should all, over time, become better off, and could all afford our homes. Due to lower land prices, houses in France are still sharply lower in price than in UK, and that follows through to all other land use associated costs. So, if France pays less for its property, it has more money to spend on other things, like TGVs, nuclear submarines, Sunday lunch - and bailing out Peugeot. All we seem to do in response is try to run faster, and take larger risks, instead of questioning this infatuation with expensive land, which takes us back, more or less, to my original point. :-) A'ternoon all! There is a lot of land banks with planning permission, but when you look into it you find there are so many conditions on that planning permission its uneconomic to build. So restriction of supply by planning constraints remains a major driver of housing costs. Add to that nearly every government 'initiative' under the guise of making housing more affordable has increased house prices by throwing more money at the same limited supply. Average agricultural land has also more than doubled in price since QE began, which is still feeding through to farm rents and food prices. Link to comment Share on other sites More sharing options...
Tony Jones Posted October 29, 2012 Share Posted October 29, 2012 Brian's quite right - in spite of Peter's comment about planning restrictions. Ever since the early 1980s (and arguably well before that) our who economy has been based on the assumption that the value of housing would wlays keep rising faster than inflation (and therefore faster than incomes). Inevitably, this has kept rents going up in parallel. Since housing is one of everyone's most basic needs, it doesn't take a PhD in economics to see that this was always going to be unsustainable. It was effectively a pyramid or Ponzi-type situation, resulting in one generation (or at least one sector of it) reaping benefits, while the next generation will be left to pick up the pieces (not to mention the tab). HOUSE PRICES NEED TO COLLAPSE - not the little glitches we've seen so far, but REALLY collapse, to the levels (relative to incomes) they were at in the 60s or 70s, but this will be painful for everyone who thought they'd made such a handsome profit. It will happen, though, as the demand side dries up with people priced right out of either buying or renting. Link to comment Share on other sites More sharing options...
Guest peter Posted October 29, 2012 Share Posted October 29, 2012 House prices collapse? I don't think so Tony. How on earth could someone sell his house for way less than he paid for it. Never mind the huge mortgage he has on it, putting them in negative equity. It's fine if all houses dropped by the same amount, so you could move on a par with the one your'e buying. But that only works for people who own their home outright, as we do. All it's going to mean is that people will not bother selling their house at all and will stay put. We have been trying to sell our house for over a year now and it's not overpriced either. We have two couples that want to buy it at full asking price, but they can't sell theirs either. If it hasn't sold by the time we get back from spain in april next year we're going to spend money on it to make it the house we want and then stay where we are. Somethings got to give, as the housing market it totally stagnant at the bottom end, which is holding up the whole market. Link to comment Share on other sites More sharing options...
Dave225 Posted October 29, 2012 Share Posted October 29, 2012 Tony Jones - 2012-10-29 5:00 PM Brian's quite right - in spite of Peter's comment about planning restrictions. Ever since the early 1980s (and arguably well before that) our who economy has been based on the assumption that the value of housing would wlays keep rising faster than inflation (and therefore faster than incomes). Inevitably, this has kept rents going up in parallel. Since housing is one of everyone's most basic needs, it doesn't take a PhD in economics to see that this was always going to be unsustainable. It was effectively a pyramid or Ponzi-type situation, resulting in one generation (or at least one sector of it) reaping benefits, while the next generation will be left to pick up the pieces (not to mention the tab). HOUSE PRICES NEED TO COLLAPSE - not the little glitches we've seen so far, but REALLY collapse, to the levels (relative to incomes) they were at in the 60s or 70s, but this will be painful for everyone who thought they'd made such a handsome profit. It will happen, though, as the demand side dries up with people priced right out of either buying or renting. I regret I do not agree. Yes, housing is a basic need but since vast numbers were destroyed by the War it was natural that new houses had to be built. It was also a route for the economy to recover from the shattering it had again received during the War and by allowing people to buy their homes therefore had a 2 fold benefit. Also much of the rented accommodation on offer was bluntly slum standards and health reasons alone dictated new builds. It is also incorrect to state that housing is a Ponzi Scheme. Anyone who bought a house since the 1950’s has paid interest rates far above what they are nowadays and I doubt anyone has ever actually paid much less than what their home is currently valued at unless they had really rich benefactors. I exclude Peter Mandelson and Tony Blair from my comments both of whom seem to be able to defy gravity. I know in my own case paying mortgage interest at up to 15% was certainly no joke and over the 25 years I bought my house over 3 times. It has certainly not increased a similar rate. Again I bought my house as a home and will be my legacy to my children, if they do not have to sell it to pay Care Home fees. If as suggested house prices are to collapse then of course even less will be available to pay Care for the current owners and so my friend may see other taxes rise as a result. One of the main reasons housing is such an issue is the number of people chasing them. Increasing the population of England by 5 million in a decade is bound to have an effect and will undoubtedly push indigenous young people down the pecking order. This increased demand is usually for cheaper properties and of course prices rise as a result. This will also be a natural driver of land prices as the land is a fixed area and as population increases more and more is required. The true answer is to control the population to something the land can support, but no one will do that until it is too late.. In addition, many of the young of today are very happy to stay at home as this allows them to splurge much of their cash on other less useful items. The excuse that they cannot get a deposit does not always wash when you look at the cars being driven and the clothes being worn and the holidays being taken, all of which I never managed, as I suspect neither did many of my generation. They also prefer single existences as this allows them more ‘fun’ and less commitment/responsibility and of course it is always easier to pay a mortgage with 2 salaries rather than 1. This blaming of the older generation for all the faults of today is being totally disingenuous. Houses are now cheaper to buy per salary than for many a generation but expectations of the young are now higher due to the malign influence of television and other advertising. Instant gratification is now the norm rather than possibly sacrificing something to get something else. Link to comment Share on other sites More sharing options...
Guest Peter James Posted October 29, 2012 Share Posted October 29, 2012 Dave225 - 2012-10-29 6:03 PM Houses are now cheaper to buy per salary than for many a generation. you're talking b*llocks http://www.housepricecrash.co.uk/graphs-ftb-average-house-price-to-earnings-ratio.php Link to comment Share on other sites More sharing options...
Guest peter Posted October 29, 2012 Share Posted October 29, 2012 That's the end if this thread then. Thanks Peter. :-( Link to comment Share on other sites More sharing options...
Brian Kirby Posted October 30, 2012 Share Posted October 30, 2012 peter - 2012-10-29 10:13 PM That's the end if this thread then. Thanks Peter. :-( Maybe, maybe not, but I echo his sentiments at least so far as south-east England is concerned! :-) Link to comment Share on other sites More sharing options...
Guest pelmetman Posted October 30, 2012 Share Posted October 30, 2012 Perhaps Antony's thread would of been more accurate if he said the.......South East & London is out of recession ;-).......... Will it reach the bulk of the UK is the question.........unlikely in my view with all the problems of the EU still waiting to hit the fan..............big time >:-) Link to comment Share on other sites More sharing options...
Guest pelmetman Posted October 30, 2012 Share Posted October 30, 2012 Peter James - 2012-10-29 8:26 PM Dave225 - 2012-10-29 6:03 PM Houses are now cheaper to buy per salary than for many a generation. you're talking b*llocks http://www.housepricecrash.co.uk/graphs-ftb-average-house-price-to-earnings-ratio.php :D :D :D ...........I'm thinking of buying this as a holiday home :D.. Yahoo! Finance UK - 12 Limetrees Close could become Britain's cheapest home tonight - it's for sale with a starting price of £750 - What could become the cheapest house in Britain is up for sale tonight - with a starting bid of less than £1,000. Robinsons estate agents, based in the North East, has this bargain property listed as "lot 55" last in its auction tonight - with a starting bid of just £750. "Ideal investment opportunity," the estate agent claims. You get a fair bit for your money - the auction catalogue describes the property as "semi detached" and comprising an entrance hall, lounge, dining kitchen, three bedrooms and family bathroom. You also get front and rear gardens. The property can be found on Limetrees Close, Stockton-on-Tees, Cleveland. Admittedly, it's a starting price only, but the site points out that "starting bid prices are published for each property and are a reflection of the price the vendor is trying to achieve". There is no reserve price on this property. There’s also a lot to do. "It is located on a decent plot but it needs a huge amount of work doing to bring it up to a decent standard,” Richard Watson, from Robinsons, told the BBC. "It has been vandalised to a very bad extent: all of the wiring has been taken out, there's no plumbing, there's no heating system, the kitchen has been removed, and the bathroom is an absolute mess." Full property details: GROUND FLOOR: ENTRANCE HALLWAY: LOUNGE:16’1 x 9’8 KITCHEN/DINER: 10’3 x 12’7 FIRST FLOOR: BEDROOM 1 (FRONT) 9’7 x 9’6 BEDROOM 2 (REAR) 10’4 x 6’4 BEDROOM 3 (REAR) 7’4 x 6’11 FAMILY BATHROOM EXTERNALLY: Gardens to front and rear. The auction begins at 18:30. Link to comment Share on other sites More sharing options...
antony1969 Posted October 30, 2012 Author Share Posted October 30, 2012 I'm telephone bidding , I have seen it and it's never worth that kind of money . I will go to £450.00 and no more . Link to comment Share on other sites More sharing options...
Guest pelmetman Posted October 30, 2012 Share Posted October 30, 2012 antony1969 - 2012-10-30 5:13 PM I'm telephone bidding , I have seen it and it's never worth that kind of money . I will go to £450.00 and no more . To be fair Antony your'e not comparing like with like ;-).............Stockton on Tee's is a much more salubrious area than Uddersfield :D Link to comment Share on other sites More sharing options...
antony1969 Posted October 30, 2012 Author Share Posted October 30, 2012 Dave , depending on what salubrious means either take back the insult or that's very funny . Link to comment Share on other sites More sharing options...
Guest pelmetman Posted October 30, 2012 Share Posted October 30, 2012 antony1969 - 2012-10-30 6:03 PM Dave , depending on what salubrious means either take back the insult or that's very funny . I apologies :$............... I would never knowingly call Huddersfield salubrious :D Link to comment Share on other sites More sharing options...
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