Is this the right or wrong time to buy a house?

[Tony 10]

The chronology of Stamp Duty rates is quite interesting.

 

- May 74 the upper rate was doubled to 2% by Labour.

- March 84 the upper rate was dropped back to 1% the Conservatives.

Nothing changed until the election in 1997 and in 96/97 (the last year of Tory government) Stamp Duty revenue was £675million.

 

Then... !

 

May 97 Labour came to power.

- July 97 the upper rate became 2%

- March 98 the upper rate became 3%

- March 99 the upper rate became 3.5%

- March 00 the upper rate became 4%

 

In the financial year 04/05 the amount of stamp duty collected by the government was £5.5 billion

 

So in the last 10 years Gordon Brown has increased the Stamp Duty tax take by over 8x !!

[Cyclone 10]

obviously he has increased it somewhat, but as max said, a lot of the change is due to the change in the value of housing, and no concurrent change in the threshold of the tax.

By the tax rate alone he'd have only quadrupled it.

[Tony 10]

So why not reduce the rate?

 

I think that the answer can be found in the phrases "tax and spend" and "size of civil service"

[trav15_1 10]

i hope not we r hopefully buying ours and want it to rise in the next 5 yrs lol

[Tony 10]

... and whilever that's the general sentiment they will continue to rise

 

Providing the market keeps on finding ways to adapt (and it always has done) long may it continue.

[Cyclone 10]

no one is ever likely to want the market to drop after they've purchased.

But that's never stopped a market before. The difference is (I think) that in some markets, never investment can just stop dead. With housing, we all need somewhere to live at the end of the day, and whilst it may be difficult even twinkies want to leave home.

[Cuey 10]

It will come to a point where it has to stop. The market is adapting by lending more and more money. 4x salary 5x 6x there comes a point where you can't pay it back. When that happens bang the first time buyers stop. At that point people at the bottom have to lower there price and it cascades all the way. In some ways i hope it does happen. Those that bought a house to live in have no really problem because they can ride it out until the price restabalises. Those that have 3 or 4 houses let out and huge mortgages go to the wall and we all laugh at them for the problems their greed has caused to the market.

[Tony 10]

Whilst you may not realise it, within those few short lines you have identified a problem, posed a question and given the current working answer.

 

In the process you've demonstrated how a modern flexible market has already adapted before a crisis was reached.

 

Isn't capitalism clever

[rustyfunk 10]

Whilst you may not realise it, within those few short lines you have identified a problem, posed a question and given the current working answer.

 

In the process you've demonstrated how a modern flexible market has already adapted before a crisis was reached.

 

Isn't capitalism clever

 

Remind me how the clever capitalist market adapted at the end of the 80s, and indeed, after any market bubble, ever...

[Lemony 10]

How about people buying houses as investments because they feel pension funds aren't safe? Surely that must have something to do with it... brick and mortar as they say.

[Tony 10]

Remind me how the clever capitalist market adapted at the end of the 80s, and indeed, after any market bubble, ever...

It adapted by developing and adopting measures to avoid traditional boom and bust cycles. Isn't that the point of this thread?

[riptony 10]

Can we agree that in the long term houses prices will rise? Is this true? Am i correct in saying that if you buy now, your house will have increased in value in 10 yrs? People are put of buy to let because of fluctuations in house prices. Ignore this look at the long-term.

 

If this is true, how can buy to let be a poor investment? if you do your research you can buy and have a mortgage below the rental income, at the moment i believe buying of plan best achieves this. If you buy intelligently you will be able to keep the property tenanted.

 

IR will rise but so will rents choosing the right mortgage is very important.

 

Buy-to-let is always a good investment........works for me anyway