A £1.07 million pension pot is equivalent to around a £40k pension income, based on a 4% pa drawdown.Originally Posted by mr noble
It means you can afford to run a 5 year old beemer in your retirement, but hardly makes you rich.
Walk down any street in the modest streets of Fulham and there will be more untaxed wealth tied up in owning a 4 bed house than in most million pound pensions.
Rich is more about FU money, a lot made outside the PAYE system, which most of us with good pension will have been slaves to for at least 35 years.
I think the main issue with increasing the LTA is allowing the very wealthy to now avoid more IHT.
The money tied up in London property will end up subject to IHT; less the nominal allowances; or CGT if it's an investment property.
That said I'm not sure the Fulham set are representative of the UK as a whole.
I understand the IHT point, but for many and for me personally I don’t worry about IHT and it is not one of my drivers.
Very sad if at the age of 55, anyone is planning their tax affairs for death which may be 30 years later. And sacrificing spending now, so they can never spend it later.
I am sure it will not be on my mind when I am pushing up daisies.
If you are going to give away your wealth do it when your kids are younger and will make most use of it, while ensuring it does not curb their drive to succeed in life
IHT planning needs to start early if you are going to make a good fist of it.
I don't have any kids so I'm not that bothered about it; I guess we shouldn't be surprised that the Tories have given another tax break to the most wealthy ...
Depends on the child...if you have one with disabilities or learning difficulties and don't wish to leave them to the mercy of the state one day. I think it's entirely the right thing to do, to plan ahead, see them well taken care of. Though there's more to that than money alone.
I think it's OK to assume at 55, that you've maybe 30 more years, though probably doesn't hurt to remain mindful it's only an assumption, not a guarantee.
Last edited by Passenger; 21st March 2023 at 13:45.
Back on topic. This months inflation print jumped from 10.2% —to 10.4%. BoE is a joke.
Looks like interest/mortgage rates are still headed in one direction, and I will give a clue, it isn’t down.
Last edited by noTAGlove; 22nd March 2023 at 12:02.
Just like successive governments. No-one is prepared to put the good of the country first. Interest rates should have risen further and faster.
Only 10%!? We can top this with +2% inflation. I will not mention the reason because 'no politics' here. Still, I'm good with a 20yrs mortgage @ 1.8%. Overall, prices of houses tend to go down a little as a result of the mortgage interest rates (± 4.8% at the moment) but somehow, my property is still gaining value according to real estate websites.
It’s a buyers market very little is selling unless heavily reduced or advertised at pre Covid prices.
No different to the current watch market.
Unfortunately for some that is not true of my local housing market, with prices as much as 50% higher than pre-Covid levels.
& Another 0.25% added to base rates too today!
It's just a matter of time...
If we’re making bets, I’ll bet that this 0.25% hike is the last one we see.
It’ll stay flat until August or September and then we’ll start to see cuts before the end of 2023 or early in 2024.
Just a guess.
Same here, we bought in Jan after a long exchange/completion period and one of the identical flats in another block just sold at the pre interest rate rises 'going rate' same as ours. In fact it went for over asking though im not sure by how much. all the remaining 4 flats listed over dec/jan/feb have all sold but there is one that has been reduced a bit and i'm not sure why that's not gone but it needs total refurb and is low down and facing the wrong way for views/light.
3.1%. Hardly deserves the headline.
https://www.bbc.co.uk/news/business-65135405
Property price falls are now accelerating and actual falls coming in much worse the industry predictions. A typical pattern following a slow turn of the super-tanker.
https://news.sky.com/story/uk-house-...-2009-12846135
I am going to give myself a teeny pat on the back for my instinct on this one. Almost all contributors to the thread appear to be rampant property bulls, probably because they are too young to have ever seen any type of meaningful falls.
Now buyers are going to hold off even more, given the expectation of further price falls.
Hold on … you forecast a 30% crash … we have not seen that. Hold off on the self congratulatory posts.
3.1% is not much more than a softening …
I don’t think this thread is full of “rampant bulls” but if that’s how we are labeled for resisting the doom forecasts of a rampant bear so be it. ;-)
I think the market will continue to stagnate for a while but I don’t see the crash you forecast.
Go back 1989-95 Nationwide house prices (easily pulled from the internet) and you will see the exact same trend. It took well over two years from the start of the first recorded falls for the juices to really start flowing.
Price falls start off very slowly (1989), after a year the trend picks up a little pace (1990), but it is the next 5 years were you see the real carnage (1991-95).
It is following the same pattern for now. Whether we see the 1991-95 style slump, only time will tell.
But risks are most firmly to the significant downside IMO.
History doesn’t repeat itself, but it rhymes.
Inflation is over 10%. Real house price falls are -3.1% for the last 12 months.
Nominal house price falls (taking into account inflation) are now near -15% for the last 12 months.
So you're saying your forecast was inflation adjusted?
I never said, lol.
lolz rampant property bulls, hardly
Inflation isn’t over 10% for the last 12 months though, compare like with like! 😊
ONS give 9.2% over last 12 months.
You are just as much of a rampant bear to some of the rampant bulls on here. I don’t think anyone would disagree that the market will soften and drop a bit, but 30% is just not a realistic amount. People still have to move and people will still want to buy houses. It’ll hurt FTBs in the near future, but the market can’t survive without them, so it’ll return. I was a FTB July 2021, but my house has climbed massively in that period, so a market deflation won’t hurt me - doesn’t mean I want it to happen, but I’d clearly have a vested interest the other way.
RPI 13.8% for the twelve months through to Feb 23. CPI 10.4%
If my maths is correct, I’d say they are both above 10% and both the most common accepted measures of inflation.
https://www.ons.gov.uk/economy/inflationandpriceindices
CPIH at 9.2% only includes housing costs associated with owner occupiers.
Last edited by noTAGlove; 31st March 2023 at 12:58.
If you want to go down the complicated path of subtracting CPI or even RPI (why?) from the headline house price increase or decrease figure, then you ought to also add on the annual wage increase figure too. That’d give a better/truer indication.
The 3% average figure masks the detail. Undoubtedly some things are being harder hit, so UK following the US trend of city centre flats having a hard time.
At the other end of the scale could someone please tell the good folk of Manchester that they should be experiencing financial pain and prices notably cooling. Truly baffling how family housing in that market continues to be so resilient, despite the current headwinds and the spectacular price growth over the past 3 years. I'm following that market for a specific purpose and most decent stock is under offer within 14 days, at or close to asking.
Inflation is a separate discussion and it's destroying the true value of all our assets not just property.
I don't think we should massage figures with overlaying inflation on a forecast, this topic is discussing prices not the inflation adjusted values.
Anyway; the probate sale I am dealing with is not shifting so I have just dropped the price 5% ... hopefully it sells soon.
Out of interest, if the right proceedable buyer came along, what is the lowest % offer you would take from your new sales price?
As the proceeds are going to charity I don't actually care (within reason) it would be for the charities to decide ... the feedback I'm getting from the charities is they are pretty money grabbing and want the cash ASAP so I suspect they would drop further.
I am seeing the dark side of charities through this probate process ...
The RICS valuer valued it at £475K and we put it up for £500k ... we are now asking offer over £475k.
If we go under £475,000 I expect we will need the approval of the charities and as there are 5 of them it will likely get difficult to get them to agree. They are not easy or very nice to deal with; I have been put off donating to any of them in the future; and they are all worthy.
Interesting insight. It is always easy to think of charities as fluffy, warm institutions, but they have payroll, cash flow and have to run a business operation like anyone else.
I guess you would have thought they would handle all of this sympathetically, rather than with a money grabbing attitude.
I guess you don’t want to give too much of that information away to prospective buyers, as any cash buyer would certainly use that to screw the price down I’m sure.
Agreed, much more sensible to talk in nominal terms. Most people are more worried about equity vs mortgage than theoretical real returns.
I think most buyers would look to knock a probate sale ... par for the course.
With regards the charities, there is defiantly a dark side.
Slightly off topic but as it's raised ... my aunt had a solicitors appointment to change her will scheduled for the day she died ... so those wishes never made it into her official will, although I have all her notes that defined the changes she wished to make.
There were a number of changes but the main one was to include the wife of her step-son who had died of cancer ... as the will stood she got nothing, her wishes were to leave her £60,000. She will get zero ...
As this wish hadn't made it into the will is has fallen by the wayside. To implement it would have reduced the amount going to charity.
I has some informal dialogues with two of the five charities nominated and whilst they were sympathetic they didn't seem very interested in the thought of helping out the widow of the cancer victim even though they were clearly the wishes of the deceased.
I have simplified the situation a lot as we are off topic and I won't name the charities but the bottom line was that they want their money ... very disappointing.
I'm currently sole executor of a relatives will where 50% goes to a charity. In your case, I'd have thought the whole estate would be exempt from IHT because of the beneficiaries so it's not as though you had a formal valuation of £475k used for settling IHT as part of probate and would be selling at a "loss" for the estate if actual proceeds were less.
I'd be laying down the law as to who controls the process if they all want to disagree, the asset has been fully exposed to the market and presumably the will gives you the power to decide. As you'll be experiencing, it's a thankless task spending all the time and trouble to distribute to others when they are money grabbing, you just have to remember you are honouring the wishes of the bereaved in a ceremonial role.
There is no IHT to pay, my aunt was a bit cranky about the "taxman" and that is why the bulk of the estate is going to charity to avoid IHT.
She's managed the will quite close to gift up to her allowance and part of that is a property transfer, a shop, so we had to get valuation on that so I got the bungalow done as part of that so we had a audit trail for the charities.
It is a thankless task and in a way I'm disappointed because I am executing her will ... not her actual wishes as they didn't make it into a new will by a matter of days.
Anyway, I have got used to the fact now, it is what it is and I'm just working through it now.
I hope the property sells soon so I can close the book on the job ...
Those TV adverts won’t pay for themselves!
As a fellow executor who had done this a few times before I hear you!
If any are being a particular pain, threaten to step aside. That normally focuses their mind as it entails delays and potentially significant estate fees if there is no substitute named willing to take the executor role on part way through and essentially for free. I don't even recall being asked on my current assignment!
... or the directors substantial salaries ...
I'm not naïve; they have to run like businesses; but when the widow of a cancer victim misses out on a substantial sum by days against the obvious wishes of the deceased I had hoped to be able to accommodate that ...
Im seeing some properties that have been a round a while having some small reductions but they were priced high to start with imo and still not shifting.
Also seeing some new stuff come on (not much however) and some is priced sensibly and some still as if it was this time last year.
Id like to see where we are in 18 months time, maybe we might start hunting again.
As much as i would love it to, i dont think well see pre-pandemic prices again
Anyone in the market to buy using right move should install the property log extension in chrome. It really highlights the games some estate agents play there and why they don't use Zoopla which is more transparent. Putting the price up then reducing again the next so the screen shows it as a price reduction is one of their favourites
Or taking it off the market, then re-listing it again as a brand new property to market is another.
The fact that it sat for months on a different listing in the first place can be disguised. And all the previous price drops can be disguised too.
Presumably she could have left up to £325k (IHT threshold) to her rellies and the rest of the estate to charity, and that would have avoided IHT?
Yes she has made use of her allowance ... but the bulk is going to charity.
Her money and her choice but if I were her step-children I'd be a bit unhappy ... but maybe they should have made more effort with her ?? I don't know them so don't really know what the score was ...
Sorry, I was making light of the situation, I completely agree with you that their actions are a disappointment.
Part of the issue is that moving is expensive. It was fine when price increases wiped out the cost within a year but now it’s dead money. The market could get very stagnant.
Last edited by Rodder; 31st March 2023 at 19:07.
House prices rise for the third month in a row
https://moneyweek.com/investments/pr...m_medium=email
Asking prices.
Sold house price follow 6-9 months later.
Only fact I know is my aunts bungalow has still yet to receive any offers after 4 months and a 5% drop.
Would you consider the property usually desirable and in a desirable part of the country? I think you mentioned Kent(?) which is usually desirable.
My brother in law stuck his house on the market at the start of last month (Hinckley, East Midlands) at a price that was confirmed by more than one estate agent to be its value or thereabouts. He's had it up for 6 weeks without a single viewing taking place, trying to sell it for around 60% more than he bought it for in 2015 which is bonkers, considering he paid 10k LESS than it was originally sold for as new in 2004 and it's had barely anything done to the interior since then.
Similarly, my wife's cousin has a property in Stourbridge that was up for sale around the time of Trussonomics and had 3 viewings in the whole 12 week exclusivity period, has been on since January with their second agent with a 20k reduction and has had just 2 viewings so less than one a month for total time on market. Again, this has a 60% mark up on last sale in 2015 but has at least been fully redecorated and the garden landscaped.
Inflation is up almost 30% since Jan 2015.
If they take an offer of 10-15% off asking (given no viewings) and add that to the 30% inflation, the growth is not that spectacular.
Are they going to sell up and retire to a smaller house? If not, and they are trading up, their next buy is even further out of reach.
I thought we agreed to stop using inflation to muddy the waters...?
Venezuela had the best performing stock market.
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