Property predictions 2022

[King Penda]

12 hours ago, haroldshand said:

They are the greatest example of people thinking they could see the world as it really was and slagged off so many other websites for being "sheeple" as they called them. They had the greater knowledge from as far back as the early 2000's and their reasoning was beyond doubt and where they banned dissenters on the spot for questioning them.

Two decades later and no apologies and so many lived fucked because of their 100% wrong prediction

I called them out and got banned 9 years ago in October when I admitted I’d bought a hovel and I did not see the crash geting any worse in effect I called the bottom I was getting it at 28% less than the guy I had paid bought it for .so if I’d of rented it would have been 110 x 425 a month just sky of 47k I’m being generous with the 425 they rent for between 400/525

[sancho panza]

30 minutes ago, With a crooked smile said:

I fully admit that I've been lucky until now. I've taken a few chances gone with my gut and do far its worked out. I firmly believe that one day the table will change but if anyone genuinely knew when that day was they would make a killing. 

We took some 100% losses on some oil calls going into Sept 20,then made some 100% gains on some Mar calls.Them's the breaks,You have to be in to win.I sue my gut isntinct for timing far more than I would readily concede.

I'm playing agaisnt the same monetary policy as the property invesotrs but you get a lot less heat for it.Property has become an emotional topic as well as an economci one and I'm as guilty of that as anyone.

[Bobthebuilder]

59 minutes ago, Bus Stop Boxer said:

The Fox?

Yes. Started there, then ended up at a house in the village.

[Bus Stop Boxer]

1 hour ago, Bobthebuilder said:

Yes. Started there, then ended up at a house in the village.

I reckon you might know a few people i knew back in the day.

I did a gig in the Fox in 1986. This really odd concept of a pub that was in the middle of Dorset nowhere, doing great food, and yet quite happy to put on gigs thru the week for new bands.

Though i didn't know any local locals.

I know 2 fellas who were around PJ before she got famous. One in Dorset and one in London, though the one in London hailed from Gosport.

I also did a festival gig with Automatic D'lamini in a field in Evercreech, some of whom ended up in her band later on.

John Parrish was one. I remember battered Castrol GTX cans being used for percussion.

Great times.

Ramble.....Off.

[Bobthebuilder]

21 minutes ago, Bus Stop Boxer said:

I reckon you might know a few people i knew back in the day.

I did a gig in the Fox in 1986. This really odd concept of a pub that was in the middle of Dorset nowhere, doing great food, and yet quite happy to put on gigs thru the week for new bands.

Though i didn't know any local locals.

I know 2 fellas who were around PJ before she got famous. One in Dorset and one in London, though the one in London hailed from Gosport.

I also did a festival gig with Automatic D'lamini in a field in Evercreech, some of whom ended up in her band later on.

John Parrish was one. I remember battered Castrol GTX cans being used for percussion.

Great times.

Ramble.....Off.

Similar time, late 80s. I never gigged the fox as far as I can remember but, I do recall the great food, the first time I had a juicy Lucy burger with the cheese inside, plus Ansty ale was legendary.

I ended up moving to the smoke and hanging around with Newcastle boys in the Old Street area.

[Bus Stop Boxer]

I moved up to E17 in 87.

I say "up" it was more "across" really.

[Bobthebuilder]

2 minutes ago, Bus Stop Boxer said:

I moved up to E17 in 87.

I say "up" it was more "across" really.

I moved to E8, Dalston. I am now South of the river. Still keep a close eye on Dorset mind.

[spygirl]

11 hours ago, Bobthebuilder said:

I was asking as a 30 year+ self-employed person. I stand every chance of a hmrc visit at any time, and was asking if it stands up in the eye of the law.

I dont expect you to know the answer, but I might have to house a relative soon, so looking for options.

PS. I meet the lovely women in your avatar many years ago in Ansty, Dorset.

Rentaroom lodger will cover that, and youll be fine.

The issue about lying  with property, say resi mortgage on a btl or holiday let, is if anything goes wrong - and it does with rentals/FHLs.

Is that you invalidate your house insurance and the mortgage company will ask for the money back, instantly..

Again,. Im aware of this happening a few times recently.

[spygirl]

10 hours ago, sancho panza said:

Fascianting insight,as you say,I can;t imagine the HMRC would be bothered as long as you're filing holiday let returns(i udnerstand there are some differences from a taxation point of view).

In terms of mrotgage fraud,unless it's specifically laid out in the T+C's,then it doesn't appear to fit any of the criteria herein but I'm not a lawyer

https://www.stuartmillersolicitors.co.uk/sentences/sentence-for-mortgage-fraud/

 

There appear to be some benefits to hliday lets ie that you can use it yourself.

https://www.holidaycottagemortgages.co.uk/holiday-let-or-buy-to-let/

• Following punitive tax changes to the way income tax is calculated on buy to let properties, landlords can claim only a portion of their mortgage interest as offsetable against profits. For landlords with large mortgages, this can amount to very substantial changes to net profit, and in many cases, turns the business case from positive to negative.
• As furnished holiday lets are considered by HMRC to be a business, there is currently no limit on the amount of mortgage interest incurred that you can offset against your profits. For higher rate tax payers, this can reduce your income tax bill considerably and save many thousands of pounds.
• If you sell a holiday let, you might be able to benefit from certain capital gains tax reliefs, such as Entrepreneurs Relief, which would reduce the tax on the sale to 10%. Compare that to capital gains on buy to let properties, which currently stands at 28% for higher rate taxpayers.
• Lastly, whilst HMRC is currently contesting this point, holiday let properties are considered to be Business Property for the purposes of inheritance tax, and as such, would be up to 100% exempt upon transfer.

 

HMRC expect you to make a profit.

The hurdle on days available and let to qualify for FHL tax relief is quite high.
 

 

The availability condition

Your property must be available for letting as furnished holiday accommodation letting for at least 210 days in the year (140 days for the tax year 2011 to 2012 and earlier).

Do not count any days when you’re staying in the property. HMRC does not consider the property to be available for letting while you’re staying there.

The letting condition

You must let the property commercially as furnished holiday accommodation to the public for at least 105 days in the year (70 days for the tax year 2011 to 2012 and earlier).

Do not count any days when you let the property to friends or relatives at zero or reduced rates as this is not a commercial let.

Do not count longer-term lets of more than 31 days, unless the 31 days is exceeded because something unforeseen happens. For example, if the holidaymaker either:

• falls ill or has an accident, and cannot leave on time
• has to extend their holiday due to a delayed flight

If you do not let your property for at least 105 days, you have 2 options (known as elections) that can help you reach the occupancy threshold:

• the averaging election – if you’ve more than one property
• a period of grace election – if your property reaches the occupancy threshold in some years but not in others

 

If youre lucky youll get school holidays plus a couple of cheap weeks, which will scrape thru the HMRC hurdle.

If you are unlucky youll be empty August cos youve price the week too high.

Then youll need to make up the weeks next year.

Fail that and all the tax relief will have to be paid back.

And youve got to show a profit.

UK FHL do really bad in slowdowns. UK holiday is normally the 2nd or 3rd holiday, shitcanned to save money.

Price too high and youll be empty.

Price too low and youll not cover the finance.

Im expecting the SBRR to be removed at least partially, so FHL are liable for 50%-100% business rates - about 7k/y

As it stands, I dont think you can run the typical FHL with a lot of debt. Its just too risky/not enough cash to cover bad years.

Just picking the first obvious (and grossly overpriced) FHL that pops up on the listing -

https://www.onthemarket.com/details/11109404/?utm_source=home_co_uk&utm_medium=cpc&utm_campaign=home_feed

Three bedroom cottage bursting with character and charm

Modernised throughout

Very successful holiday let

Town centre location

Sold as a going concern with ongoing bookings and furniture included

Im pretty sure the place is what was the auction room -

https://houseprices.io/?q=YO21+3DB

27/09/2016£210,000Lot 3, The Old Auction Rooms, The Paddock, Whitby, YO21 3DB

22/09/2016£135,000Lot 2, The Old Auction Rooms, The Paddock, Whitby, YO21 3DB

02/09/2016£211,500The Loft, The Old Auction Rooms, The Paddock, Whitby, YO21 3DB

05/08/2016£190,000Lot 4, The Old Auction Rooms, The Paddock, Whitby, YO21 3DB

22/07/2016£225,0006 The Paddock, Whitby, YO21 3DB

15/07/2016£150,150Lot 1, The Old Auction Rooms, The Paddock, Whitby, YO21 3DB

So, allowing for ~12 months for a refurb, this place has only been running for ~4 seasons.

https://www.directwhitby.co.uk/paddock-cottage.html

Of those, 2 years have been covid.

Skimpy bookings for 2022 - ~6 weeks so. Need another 5 to make the FHL hurdle.

Assuming they are carrying a lot of debt - which explains the stupid asking price - then they'll be gushing cash.

They are not using one ofthe main agents, who take 25% of the booking. Scma but they do get people thru the door.

Basically, FHL are being sold as IO BTL liek what it used to be.

Except its not.

 

 

 

 

[Innkeeper]

50 minutes ago, spygirl said:

Rentaroom lodger will cover that, and youll be fine.

The issue about lying  with property, say resi mortgage on a btl or holiday let, is if anything goes wrong - and it does with rentals/FHLs.

Is that you invalidate your house insurance and the mortgage company will ask for the money back, instantly..

Again,. Im aware of this happening a few times recently.

Agreed.

Lying to HMRC, mortgage lenders, insurance companies etc is widespread - I think that can be safely said.  Some people know lying to these organisations is a gamble, some don’t care (can skip the country, go back home etc) while a great deal of poor saps believe their best mate, bloke down the pub, brother in law or whoever telling them “I’ve always done it for years, they’ve no way of knowing”......

Problem is that relatively few people do get caught out so it can be difficult to actually know anyone it’s happened to.  Which makes the decision a lot easier..

[spygirl]

Just now, Innkeeper said:

Agreed.

Lying to HMRC, mortgage lenders, insurance companies etc is widespread - I think that can be safely said.  Some people know lying to these organisations is a gamble, some don’t care (can skip the country, go back home etc) while a great deal of poor saps believe their best mate, bloke down the pub, brother in law or whoever telling them “I’ve always done it for years, they’ve no way of knowing”......

Problem is that relatively few people do get caught out so it can be difficult to actually know anyone it’s happened to.  Which makes the decision a lot easier..

You cant lie to HMRC with property - they know. Theyll get round to you at some point, knowing they can compound the fine over the years and have 20 years.

In terms of mortgage/bank then the bank could find out but is too lazy/stupid.

You cant lie to an insurance company - and make a claim. First claim and theyll be sniffing.

 

 

[Hancock]

14 hours ago, sancho panza said:

I don't think there's any need for personal abuse like that at all H,there was nothing in the the comment to jsutify a response like that.

Its a response to his prolonged condescending ways ... and the blunt comment is exactly what leveraged landlords in the UK are.

If i could go back 25 years, i'd no doubt have bought myself a load of BTL's as it beats working for a living, though at least i'd have the self awareness to see my parasitic actions for what they would have been, and not join HPC website to gloat at those priced out.

Of course we've all got to do what we've got to do to get by, just what the leveraged BTL brigade have done has royally screwed over future generations and helped destroy the settled way of life for millions of families.

Every landlord i've met has been an absolute smug cunt, my brother with his portfolio of what would otherwise be family homes being a prime example. They're a breed apart.

[BurntBread]

15 hours ago, haroldshand said:

But it's not down to them individually to be the moral compass in society, that is supposed to be the government.

No, I think the law sets an absolute floor on behaviour, but it is up to us to be the moral compass of society, otherwise we are pissing on our heritage. Governments are not benign, even in a democracy, so we shouldn't be looking to leaders with their own interests to decide what is acceptable behaviour: we decide, and where there are opposing views, politics is where the compromises should be negotiated.

It's obviously difficult, morally, when there are gains to be had from something you think to be immoral, and it's easy to hide behind the excuse that "somebody else would do it if I didn't"; an excuse which is indeed perfectly true in many cases. What seems to have happened is that society and local communities have actually been destroyed over the last 50 years by transient lifestyles, the need to migrate for work even within the country, and government taking over the role of parents for many people. The death of society has happened rather quietly. In a more tight-knit community, BTL may be legal, but it would be pretty socially unacceptable beyond the small rental sector that is needed. That disapproval would emerge because of the problems caused both to and by (certain) renters (I say that as a renter myself).

@sancho panza, I think I am saying there is a role for something beyond "The govt sets the rules and the players play the market." Folding that into financial decisions is probably very foolish, financially, but maybe not everything can be reduced to money. I know you put an awful lot back into society through what you do, so happy to be told that you keep financial decisions free of irrational thinking.

@With a crooked smile, I suspect we have very different views on what is acceptable in the field of property, and that's fine. I may have misjudged the damage caused by excessive BTL (for example), and I can certainly be a hypocrite on other matters when I get on my high horse. I guess the main thing is that property investment is not free of consequences for other people (in the way that, say, buying second-hand oil stocks is pretty much free of moral consequences). I would therefore like it to be the case that anyone who got into property investment at least thought about the effects, even if they came to different conclusions to me.

Obviously, the whole subject is bound to raise heckles, as posters here have been on opposite sides of decisions and trends for many years, and felt the effects personally. I hope we can keep the debate going, though, without it getting too acrimonious. Thank you for taking the darts thrown in your direction very levelly, @With a crooked smile.

[eek]

18 hours ago, Andersen said:

It's the first time I've heard that many of the current problems have been caused by LL's being *less* greedy than they could have been  It's still the LL's fault tho' 

Footnote: I'm tempted to agree with you, many LL's are struggling to break even which makes you wonder why they're in the game (or why they haven't exited already)

Because they are stupid and the annual return never mattered for your average landlord because capital gains made it worthwhile.

 

[eek]

3 hours ago, spygirl said:

HMRC expect you to make a profit.

The hurdle on days available and let to qualify for FHL tax relief is quite high.
 

 

The availability condition

Your property must be available for letting as furnished holiday accommodation letting for at least 210 days in the year (140 days for the tax year 2011 to 2012 and earlier).

Do not count any days when you’re staying in the property. HMRC does not consider the property to be available for letting while you’re staying there.

The letting condition

You must let the property commercially as furnished holiday accommodation to the public for at least 105 days in the year (70 days for the tax year 2011 to 2012 and earlier).

Do not count any days when you let the property to friends or relatives at zero or reduced rates as this is not a commercial let.

Do not count longer-term lets of more than 31 days, unless the 31 days is exceeded because something unforeseen happens. For example, if the holidaymaker either:

• falls ill or has an accident, and cannot leave on time
• has to extend their holiday due to a delayed flight

If you do not let your property for at least 105 days, you have 2 options (known as elections) that can help you reach the occupancy threshold:

• the averaging election – if you’ve more than one property
• a period of grace election – if your property reaches the occupancy threshold in some years but not in others

 

If youre lucky youll get school holidays plus a couple of cheap weeks, which will scrape thru the HMRC hurdle.

If you are unlucky youll be empty August cos youve price the week too high.

Then youll need to make up the weeks next year.

Fail that and all the tax relief will have to be paid back.

And youve got to show a profit.

UK FHL do really bad in slowdowns. UK holiday is normally the 2nd or 3rd holiday, shitcanned to save money.

Price too high and youll be empty.

Price too low and youll not cover the finance.

Im expecting the SBRR to be removed at least partially, so FHL are liable for 50%-100% business rates - about 7k/y

As it stands, I dont think you can run the typical FHL with a lot of debt. Its just too risky/not enough cash to cover bad years.

Just picking the first obvious (and grossly overpriced) FHL that pops up on the listing -

https://www.onthemarket.com/details/11109404/?utm_source=home_co_uk&utm_medium=cpc&utm_campaign=home_feed

Three bedroom cottage bursting with character and charm

Modernised throughout

Very successful holiday let

Town centre location

Sold as a going concern with ongoing bookings and furniture included

Im pretty sure the place is what was the auction room -

https://houseprices.io/?q=YO21+3DB

27/09/2016£210,000Lot 3, The Old Auction Rooms, The Paddock, Whitby, YO21 3DB

22/09/2016£135,000Lot 2, The Old Auction Rooms, The Paddock, Whitby, YO21 3DB

02/09/2016£211,500The Loft, The Old Auction Rooms, The Paddock, Whitby, YO21 3DB

05/08/2016£190,000Lot 4, The Old Auction Rooms, The Paddock, Whitby, YO21 3DB

22/07/2016£225,0006 The Paddock, Whitby, YO21 3DB

15/07/2016£150,150Lot 1, The Old Auction Rooms, The Paddock, Whitby, YO21 3DB

So, allowing for ~12 months for a refurb, this place has only been running for ~4 seasons.

https://www.directwhitby.co.uk/paddock-cottage.html

Of those, 2 years have been covid.

Skimpy bookings for 2022 - ~6 weeks so. Need another 5 to make the FHL hurdle.

Assuming they are carrying a lot of debt - which explains the stupid asking price - then they'll be gushing cash.

They are not using one ofthe main agents, who take 25% of the booking. Scma but they do get people thru the door.

Basically, FHL are being sold as IO BTL liek what it used to be.

Except its not.

 

 

 

 

It's not another 5 weeks required - it's 16 weeks (so all 13 weeks of school holidays + at least 3 other weeks).

[spygirl]

21 minutes ago, eek said:

It's not another 5 weeks required - it's 16 weeks (so all 13 weeks of school holidays + at least 3 other weeks).

Sorry, I'll clarify.

If you dont price stupud, you can - and still count on 10 weeks let - 2 half term + 2 weeks Easter +6 weeks.

That's about the limit.

If your lucky you can get a handful of weeks either side of the school holiday - as long as they are priced to go.

Bumping up to 105 is far beyond what the average FHL gets.

[With a crooked smile]

2 hours ago, BurntBread said:

Obviously, the whole subject is bound to raise heckles, as posters here have been on opposite sides of decisions and trends for many years, and felt the effects personally. I hope we can keep the debate going, though, without it getting too acrimonious. Thank you for taking the darts thrown in your direction very levelly, @With a crooked smile.

No problem I only have 1 b2l someone on here  has been calling me a landlord which while technically true I wouldn't really regard myself as. I think he's mistaken the fact that I have a commercial mortgage for the fact that I might have a string on properties. In actual fact the commercial mortgage is for an 11 bedroom hotel. 

What people like the person critising me dont see is the struggle to get where I am now. There were times for instance when we slept on the floor having rented our own bedrooms out. I regularly work 7 days a week and that is draining. 

I'd also point out that during covid we gave our tenant in the b2l a free pass on much of the rent as she split up with her boyfriend and then lost her job in the creative industries. 

I am however likely to buy a second buy to let in the next 12 to 18 months. 

I'm not asking for sympathy. I'm happy and grateful for my lot. It's been a combination of taking a bit of risk, working hard and good old fashioned luck that's got me here. 

My day job is in sales so if someone anonymous on the Internet wants to call my anonymous avatar a cunt it really is water off a ducks back. 

[With a crooked smile]

As for property predictions for next year. I'm going to say up again. It appears you can now get 7 times earnings. I didn't think you could get more than 5 due to government regulations but it appears I'm wrong https://amp.theguardian.com/business/2021/dec/27/fears-of-higher-uk-home-prices-as-habito-launches-7x-mortgage

[With a crooked smile]

3 hours ago, BurntBread said:

suspect we have very different views on what is acceptable in the field of property,

Possibly it might be my upbringing. My dad was the son of an immigrant who got naturalised after fighting for British navy in WW2. My dad did really well became the 2nd person not privately educated in one of the big 4 accountancy firms to become a partner. 

The Guardian or the Observer years ago discribed my dad or a tax scheme that he created as 'a threat to democracy' he's always lived a bit on the edge of the law. I think I'm a bit more immoral than my dad if I'm honest. He believes in pushing it to the absolute limit. I'm prepared to cross that line as I feel I pay so much in and get little out eg no child benefit and this year due to doing very well at work it looks like I'll have no tax free allowance. 

I have my own moral code and I'm always there for my friends. 

[spygirl]

38 minutes ago, With a crooked smile said:

As for property predictions for next year. I'm going to say up again. It appears you can now get 7 times earnings. I didn't think you could get more than 5 due to government regulations but it appears I'm wrong https://amp.theguardian.com/business/2021/dec/27/fears-of-higher-uk-home-prices-as-habito-launches-7x-mortgage

No you cant.

Habito is a work of fiction. See thread.

[eek]

56 minutes ago, With a crooked smile said:

As for property predictions for next year. I'm going to say up again. It appears you can now get 7 times earnings. I didn't think you could get more than 5 due to government regulations but it appears I'm wrong https://amp.theguardian.com/business/2021/dec/27/fears-of-higher-uk-home-prices-as-habito-launches-7x-mortgage

7x income on a very niche mortgage that makes zero actual sense given it's headline rate compared to other options. 

[With a crooked smile]

Just now, eek said:

7x income on a very niche mortgage that makes zero actual sense given it's headline rate compared to other options. 

I'd agree, the guardian article says its public sector only. If they limit it to specific jobs in PS then I could see it as not to big a risk to say give a junior doctor with a defined career path 7 times salary as I imagine they will quickly move up the ladder /  salary branding. 

[Boon]

To me it strikes me as irresponsible. 

We have the strange situation in the country where those with vested interests already know this but they won't say anything against it because they indirectly benefit.

Thus shit like the 7x mortgage comes in rather than anyone arguing against why we have gotten to this point.

It's plainly obvious what Habito is to me. The owner missed out on a massive payday with Wonga as that went tits up before IPO. But here we have a business which won't suffer from poor public perception as much.

Gameplan should be to aggressively market themselves to chase loans at any cost, so it looks like they can 'scale up'. IPO and cash in some chips - hundreds of millions of worth. Business becomes stagnant shortly after. See Funding Circle for the template.

The risk takers will be the poor sods who take out these mega mortgages as they bear all the counterparty risk. If in 5 years interest rates are 4% and Habito goes bust, what happens then? The administrators would seek to sell the loan book but it might well be cheaper for an aquirer to liquidate the properties rather than honour the commitment for the next 35 years.

[spygirl]

17 hours ago, Boon said:

To me it strikes me as irresponsible. 

We have the strange situation in the country where those with vested interests already know this but they won't say anything against it because they indirectly benefit.

Thus shit like the 7x mortgage comes in rather than anyone arguing against why we have gotten to this point.

It's plainly obvious what Habito is to me. The owner missed out on a massive payday with Wonga as that went tits up before IPO. But here we have a business which won't suffer from poor public perception as much.

Gameplan should be to aggressively market themselves to chase loans at any cost, so it looks like they can 'scale up'. IPO and cash in some chips - hundreds of millions of worth. Business becomes stagnant shortly after. See Funding Circle for the template.

The risk takers will be the poor sods who take out these mega mortgages as they bear all the counterparty risk. If in 5 years interest rates are 4% and Habito goes bust, what happens then? The administrators would seek to sell the loan book but it might well be cheaper for an aquirer to liquidate the properties rather than honour the commitment for the next 35 years.

I doubt if habito have sold any of its own mortgages.

 

[spygirl]

On 26/12/2021 at 09:10, spygirl said:

One of my feckless sisters reckons shes getting a mortgage net year.

150k-200k will do her, apparently.

I dont know nothing, apparently. Banks are going to lend her the money.

My 75yo mother assures me my sister is right - Of course she get a mortgage.

Im being a fucking idiot. She knows what to do apparently, shell know how to answer the questions.

She earning all of ~500/m PT cleaning. And thats a recent thing, work. Thats the peak of her 30 years as an adult.

Assuming the lazy  cow gets off her arse - and hes not for 30 years - then its going to be popcorn time.

Sometime in summer I expect the idiot will come up with scheme by which I take on the mortgage - Dont worry, Ill pay it, shell say. Just the banks dont  want to lend to me...

If the  lazy cow had don what I suggested when she came back to the UK 10 years ago - get a FT job,. quickly and save, then the stupid cow would not be in the situation.

She could have have 50k (first 6 years was being paid for by her now ex BF) easy and ~25k job.

But that would involve working.

Just rung mothas.

Mam n sisters are all gathered around a laptop 'looking' at property.

Mams retired on state pension. She could not get a credit card. Thankfuck.

Sisters combined earning is 1k/m. In a good month, where they show up for work.

I could hear them saying 'Well, if I stop this pt cleaning, then get a 60k job, I'll buy that .

Local median income pans out sub 24k. That's 60% of working people basically not earning enough to get a 50k mortgage.

Theyll be down the EA office in new year, arranging viewing.

I think theyve already had 2 or 3 free valuations in 2021.

I'm also an idiot and dont know anything. The EA says their house is worth xK. Sadly the LR shows nothing selling anything near that.

But the EA is 'qualified' 'knows what hes doing' etc.

I dont mind. They can waste each others time n money for as long as they like.