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Property & Brexit
King Lodos
Posted: 28 October 2018 20:36:06(UTC)
#11

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The problem with Labour policies, empowering tenants, is that although they seem socially conscious, the effect is that they make letting property even less attractive.

This means more empty investment properties – which describes huge swathes of West London .. And the reason they're either empty or substandard is because yields are so low .. It's just not worth a 2% return – often before tax and an estate agent cut (if they're managing) – plus the obligation to fix boilers, plumbing, chasing up unpaid rent, evictions, finding the copper pipes ripped out the walls..

So build more houses to lower property prices? Well 100,000's a drop in the ocean – and there are already many times more than that empty, but in the wrong locations .. It wouldn't win votes, but the best thing would probably be to gives landlords a tax break, because that would open up the rental market
3 users thanked King Lodos for this post.
Aidan MacGinley on 29/10/2018(UTC), Tim D on 01/11/2018(UTC), anglo29 on 12/11/2018(UTC)
Tim D
Posted: 28 October 2018 21:14:01(UTC)
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We would probably sell the rental property (and plenty of tenants have expressed interest) if we only had to pay 18% CGT on the significant gains since the 90s. But I choke on paying 28%.
2 users thanked Tim D for this post.
Jon Snow on 28/10/2018(UTC), Nigel Harris on 29/10/2018(UTC)
philip gosling
Posted: 28 October 2018 22:15:25(UTC)
#14

Joined: 06/01/2013(UTC)
Posts: 1,191



Maybe there are 2 property markets London and the rest. Our Central London flat is easy to let out but normally to overseas people 50: 50 EU /rest of World. But selling has softened in Westminster by some 10%+ in past 2 years - probably due to fewer international professionals coming to the finance and banking centres in London as their companies are setting up off shoots in EU to keep EU access after BREXIT. Of course large capital gains makes it difficult to sell anyway and need to take our holidays in London in the future as the tax take keeps rising for Landlords. In Edinburgh and perhaps many other University Cities - hundreds if not thousands of 1/2 bed blocks of flats are springing up everywhere - amazing and sales of Georgian homes are back to Overs Over prices (which means 10% or more extra) whereas 3-5 years ago it was fixed price or offers around.


With large department store buildings going for a song and now Debenhams heading smaller I worry about Real Estate Investing of any kind - shopping centres or going to the bank or insurance company personally is reducing because of online, video conferencing etc.

Next big over supply will be cheaply built and expensive to maintain new student flats and empty insurance/banking complexes.

King Lodos
Posted: 28 October 2018 23:13:23(UTC)
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I found in Kensington (where there are streets of unoccupied properties) people wanted to pay £1,000/month for a studio flat .. But for that to be a 2% yield, before any other costs, you'd have to buy the flat for £600k .. Low end of what I could get in Ealing.

Margins are razor thin, and a few months unpaid rent or a broken boiler, and they're wiped out .. So NS&I bonds at 2% made more sense – unless you think property values can keep rising above the rate of inflation.

So this is why I only really invest in logistics .. Maybe a crowded trade, but there is limited space for distribution around cities, and as cities grow, you're going to need more of it

3 users thanked King Lodos for this post.
Tim D on 29/10/2018(UTC), Jenki on 29/10/2018(UTC), Aidan MacGinley on 12/11/2018(UTC)
sandid3
Posted: 29 October 2018 07:51:10(UTC)
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King Lodos;71769 wrote:
This means more empty investment properties – which describes huge swathes of West London .. And the reason they're either empty or substandard is because yields are so low .. It's just not worth a 2% return – often before tax and an estate agent cut (if they're managing) – plus the obligation to fix boilers, plumbing, chasing up unpaid rent, evictions, finding the copper pipes ripped out the walls..

So build more houses to lower property prices? Well 100,000's a drop in the ocean – and there are already many times more than that empty, but in the wrong locations .. It wouldn't win votes, but the best thing would probably be to gives landlords a tax break, because that would open up the rental market
The sensible alternative would be to tax these zombie investment properties out of existence. Making it far more expensive to hold an empty investment property would force sales and lower prices, which would be in the public interest. (The same applies to land banking by builders.)
2 users thanked sandid3 for this post.
Tim D on 29/10/2018(UTC), Jenki on 29/10/2018(UTC)
anglo29
Posted: 29 October 2018 09:38:38(UTC)
#16

Joined: 04/12/2015(UTC)
Posts: 779

What I find alarming is the number of "luxury" riverside apartments going up along the banks of the Thames at silly prices, which have been found to have the same cladding material as Grenfell. On one such development in Greenwich the unfortunate leaseholders found their £800,000 apartments are now worth around £50,000 until the rogue cladding is stripped away and replaced, which the leaseholders are expected to pay for. (The construction company having "conveniently" sold on the freehold to an investment company).

Another worrying aspect to London becoming a replica of Hong Kong Harbour, is the number of tall blocks apparently being built on land regarded as a "flood plain". With climate change and rising sea levels I would not care to be in one of them.

After the "technology bubble", are we heading for a similar property bubble burst?


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