House prices rose 7.3% this year, average now almost £250k

Status
Not open for further replies.
Caporegime
Joined
22 Oct 2002
Posts
26,810
Location
Boston, Lincolnshire
Smaller tech companies too. We're only 400 people but we let our office leases go last Summer and are seriously looking instead of office space into acquiring a building that can be mixed use office and "hotel". A bit like creating a campus where all the desks are hotdesks and lots of meeting rooms. The hotel part will allow our staff to live where they want but come down to the campus say for a few days every month to collaborate together and get some face time. We save a fortune on hotel expenses and people tend to enjoy working for long sessions together once in a while. Also effectively no one needs to live within commuting distance any more so we can buy it somewhere outside of the South East for a lot less. Ask your typical Brighton to London commuter in our place if they'd like to WFH 18 days out of 21, spend 3 on campus (staying overnight for two of them) and they can move a bit further out and have a bigger house and they all universally want it.

That will also flip the wages as well. People will not get their cake and eat it. Wages will get averaged out as being South or North will not make any difference.
 
Soldato
Joined
10 Jul 2008
Posts
7,684
I work in London (well normally). I would never live there, and post COVID, i'll hopefuilly only be in the office a couple of times a week.

Same. A huge shift will take place as companies wake up and realize that we can operate with people working from home to a good enough level. Floor space in London will be consolidated into smaller footprints with hot desking/wfh encouraged. A lot of offices will likely only have enough desks to have 1/3rd of the workforce in at one time to save cost. Even company conferences requirements (big rooms for the entire workforce) may become a thing of the past where we move to online/virtual delivery. It frankly worked better in our experience during lockdown, as everyone can be comfortable and see and hear the speaker/slides properly. This is already happening and has been before COVID anyway.

It will be interesting to see what happens with the extortionate train season ticket costs. Most train companies will have lost the majority of their season ticket income for the last year. Most unsurprisingly they are obviously going to have to rise again in their eyes to cover COVID and the lack of travellers going forward. It's a shame that the ticketing is so obviously skewed toward profitability by shafting anyone that breaks away from the traditional 5 day working week. i.e. People who wfh and travel 2-3 days a week are still better off often buying a full annual! I think you have to go down to 2 days a week to actually save money due to the high cost of buying day rate prices. I was thinking of ways to do it so that I have an A and a B week of alternating days and overlap a weekly ticket to minimize cost. I've not missed paying thousands to suffer the incompetence of South Western Railway.
 
Caporegime
Joined
13 Jan 2010
Posts
32,495
Location
Llaneirwg
It's easy to say that to 20 year olds that were brought up in London all their life and have everything there. "Yeah just move up north mate and say goodbye".

He has a point though.
Life isn't fair. And at 20 you have choice, friends /family or house. If you're low paid in the south.

It sucks but it is an option
 
Soldato
OP
Joined
6 Oct 2009
Posts
3,991
Location
London
Tax year 2019/2020 was the last year landlord got any relief on mortgage interest.

Wrong, there still is a 20% mortgage interest tax credit for landlords.

Personally, I'd penalise BTL mortgages, e.g. 3% annual tax on the mortgage amount. That's on top of a property and/or land value tax that should be on the place, combined with rent control to ensure that it's not passed down to the renter.
 
Soldato
Joined
20 Oct 2002
Posts
17,854
Location
London
Soldato
Joined
18 Oct 2002
Posts
3,506
Location
UK
Same. A huge shift will take place as companies wake up and realize that we can operate with people working from home to a good enough level. Floor space in London will be consolidated into smaller footprints with hot desking/wfh encouraged. A lot of offices will likely only have enough desks to have 1/3rd of the workforce in at one time to save cost. Even company conferences requirements (big rooms for the entire workforce) may become a thing of the past where we move to online/virtual delivery. It frankly worked better in our experience during lockdown, as everyone can be comfortable and see and hear the speaker/slides properly. This is already happening and has been before COVID anyway.

Agents keep trying to sell me London office space. Right now they reckon London office space is only running at 10% occupancy between empty unleased offices and leased offices that are wastelands. I think post-COVID it will be exactly as you describe. Previously un-enlightened employers who believed in presentee-ism realise how foolish it is. In fact savvy employers have worked out they get more from staff at home and in fact you need to start being more concerned about burn out as the lines between work and home get blurred almost always in favour of doing one more thing for work.

It will be interesting to see what happens with the extortionate train season ticket costs. Most train companies will have lost the majority of their season ticket income for the last year. Most unsurprisingly they are obviously going to have to rise again in their eyes to cover COVID and the lack of travellers going forward. It's a shame that the ticketing is so obviously skewed toward profitability by shafting anyone that breaks away from the traditional 5 day working week. i.e. People who wfh and travel 2-3 days a week are still better off often buying a full annual! I think you have to go down to 2 days a week to actually save money due to the high cost of buying day rate prices. I was thinking of ways to do it so that I have an A and a B week of alternating days and overlap a weekly ticket to minimize cost. I've not missed paying thousands to suffer the incompetence of South Western Railway.

My limited understanding of the well trodden solution to this, which most of the European railways do, is a flexible season ticket. You buy 50 trips a year for £x at a discount which you can use any time. The only drawback of this is that to keep the quantity and frequency of trains for commuters makes it unviable as a business model, which is why most operators abroad are part-Government subsidised.
 
Caporegime
Joined
22 Oct 2002
Posts
26,810
Location
Boston, Lincolnshire
Great. And what about the people that live in the other 19 unaffordable cities in this list, for example? Because the lowest on there is 7.2 times higher than the average salary (Gloucester) :rolleyes:

Telling people to move is like putting a plaster on someone who's arm has been cut off. Doesn't exactly solve the underlying issue does it...

Average house price in Manchester is £202k. I am sure work can be found there too plus there is plenty to do. You have the peak and lake District on your doorstep too.
 
Soldato
Joined
30 Mar 2007
Posts
2,723
Location
Essex
Yeah every landlord claims to be a really nice guy and fixes all his tenants problems at no cost to the tenant :p And says, "Don't listen to all those sob stories you hear from renters, they're all tosh/made up. Landlords would *never* behave like that!" :p

Back in the real world, many landlords do exactly as I described. If you ask for something to be fixed you'll end up losing your deposit ("you must have broken that boiler by using it wrong") or being turfed out ("entitled tenant expects too much") or simply finding your rent hiked.

As for the market not changing, again the statistics show that more people are renting and less people are buying their own place.

This is exactly what you'd expect when house prices rise and wages don't.

But statistics are "tosh" as well, aren't they? Poor BTL landlords, nobody understands how great they are for society, or how hard their life is. It's so difficult to have somebody less well off pay off your mortgage for you, where's the sympathy for landlords and their struggle? /s

So you think every landlord is that unscrupulous with their tenants - you surprise me . If it was that bad there would be far more boroughs issuing license for private landlords to operate - not seeing many of them around now are we.

I’m never going to win here really , not many private landlords can give an honest appraisal of what goes on . I was tying to .
 
Caporegime
Joined
29 Jan 2008
Posts
58,899
Tax year 2019/2020 was the last year landlord got any relief on mortgage interest.

Some will use a LTD company to get around this.

Wrong, there still is a 20% mortgage interest tax credit for landlords.

Personally, I'd penalise BTL mortgages, e.g. 3% annual tax on the mortgage amount. That's on top of a property and/or land value tax that should be on the place, combined with rent control to ensure that it's not passed down to the renter.

BTL landlords won't be the ones taking the main hit from any land value tax, developers sitting on unused land that could be developed or older retired people with limited income but living in say a family sized home that has risen substantially in price since they bought it decades ago etc.. will be the ones getting whacked.

If it is a replacement for council tax it's not clear they'd even be liable for it, tenants pay council tax, after all, they're the ones utilising the property or "land".
 
Soldato
Joined
18 Oct 2002
Posts
9,505
Some will use a LTD company to get around this.

Some, but many are now seeing a big drop is profits as the rate has been dropping for a few years now. 2019/2020 was the last year and that was just 25% of the interest.

From what I recall LTD companies work if buying new properties but it's not so easy to throw existing properties into them.
 
Caporegime
Joined
29 Jan 2008
Posts
58,899
Some, but many are now seeing a big drop is profits as the rate has been dropping for a few years now. 2019/2020 was the last year and that was just 25% of the interest.

From what I recall LTD companies work if buying new properties but it's not so easy to throw existing properties into them.

Yeah true re: existing, you'd be liable for CGT at the point of the transfer and your LTD co would need to pay stamp duty (which is a bit higher too).
 
Soldato
Joined
28 Jan 2008
Posts
6,024
Location
Manchester
It's easy to say that to 20 year olds that were brought up in London all their life and have everything there. "Yeah just move up north mate and say goodbye".

As 20 year old moving within a country it's easy, you can be back home in few hours whenever you wish. I moved 1000miles (as the crow flies) when I was 20. Sure, it wasn't easy to leave family and friends but it was an experience worth doing. These days it's even easier (okay not now during pandemic) with all the technology to keep in touch then it was 20years ago. Most of my family and friends didn't even have internet or mobile phones back then.
 
Soldato
Joined
7 Nov 2009
Posts
19,798
Location
Glasgow
As a landlord, I can confirm it was incredibly easy process and it’s minimal hassle. For bald eagle to claim it’s difficult, hard work or whatever is, in my experience, wrong.

I think that we need rent control, or a tax on BTL mortgages/rental income. How is it right that my tenant pays almost £600 a month in rent when the mortgage I have is £350? It’s not right and it keeps the renters renting as they can’t save the deposit.
I’m clearly a hypocrite as why don’t I charge him £350?... well, I don’t have a good answer. Greed? Probably.
There’s a concern when they move out I’ll need to pay thousands to fix it but that may not come true.

I’ll add, it was my property that I bought and lived in but then moved in with my partner so rented my place out. I bought in a less than ideal location, because it suited my budget. I accepted that I couldn’t afford where I truly wanted so went elsewhere. I do think there’s truth in the argument that people need to move out of their preferred areas but I also understand this can’t always work; especially in smaller towns.
 
Caporegime
Joined
21 Jun 2006
Posts
38,372
As a landlord, I can confirm it was incredibly easy process and it’s minimal hassle. For bald eagle to claim it’s difficult, hard work or whatever is, in my experience, wrong.

I think that we need rent control, or a tax on BTL mortgages/rental income. How is it right that my tenant pays almost £600 a month in rent when the mortgage I have is £350? It’s not right and it keeps the renters renting as they can’t save the deposit.
I’m clearly a hypocrite as why don’t I charge him £350?... well, I don’t have a good answer. Greed? Probably.
There’s a concern when they move out I’ll need to pay thousands to fix it but that may not come true.

I’ll add, it was my property that I bought and lived in but then moved in with my partner so rented my place out. I bought in a less than ideal location, because it suited my budget. I accepted that I couldn’t afford where I truly wanted so went elsewhere. I do think there’s truth in the argument that people need to move out of their preferred areas but I also understand this can’t always work; especially in smaller towns.

You would be a naive to charge £350 because it's all taxable minus expenses which don't include mortgage payments. Used to include mortgage interest but that's now been whittled down and removed completely.

So if they give you £350. You minus say 20% as expenses. You are then taxed on £280 at full rate of income tax. Let's just say that's 40% to keep things simple. You would be left with less than half of the £350 in your pocket at the end so you would therefore be paying majority of the mortgage yourself even with a tenant in place.
 
Soldato
Joined
29 May 2005
Posts
4,896
I feel very sorry for people trying to get on the property ladder.

I was 35 and my mother asked me, since I had a good job, why I wasn't yet living somewhere like our family home I grew up in, a four bedroom neo-georgian detached house in an affluent part of a well known commuter town in Surrey. My father had bought it at a similar age to me in 1979.

I said to Mum, how much did Dad buy it for? £90,000 was the answer. And if you don't mind me asking, how much did Dad earn in 1979. He was on a really good wage she replied - about £30,000
Average wage in 1979 was £6k/year

you should be feeling lucky for your situation as opposed to sad for current generations. Your dad was probably the top 1% earner at the time.

£90k for a house in 1979 was also expensive considering average uk house price was £20k.

your situation is fairly unique but I don’t disagree that houses were a lot more affordable that house prices were only a few multiples of an average person’s wage at the time.
 
Status
Not open for further replies.
Back
Top Bottom