Tuesday, 26 May 2015

"Forget pensions as bank accounts, your home is a cash machine"

Emailed in by MBK from CityWire: Forget pensions as bank accounts, your home is a cash machine.

Quite where that is supposed to leave younger people who can choose between handing over all their spare income as rent and/or mortgage repayments for the rest of their working lives was unclear at time of going to press.

Something like: "Forget pensions and bank accounts; you are your landlord's cash machine"?


Lola said...

Been going on for years - equity release that is.

But, ER only really 'works' off the back of ever increasing house, aka land, prices. So, yes, it is de facto at the expense of the next generation.

mombers said...

How about making equity release subject to VAT? Surely not as useful an economic activity as producing goods or services?

Random said...


mombers said...

@Random good article. Mortgage interest is not a cost of doing business apart from the portion that relates to the cost of the building. Land has no cost of production so why should you be able to borrow up to the hilt to speculate on it? Also landlording is not like any other business as it is not subject to VAT. Seems like the NRLA is picking and choosing its comparison criteria. And finally, the corker:
“To discriminate against landlords and remove these reliefs, which are offered to other businesses, would cut a swathe through their profitability calculations and prompt many to sell up and invest elsewhere. That would mean even higher rents for those forced to chase after a shrinking pool of rented housing,”
How are rents going to go up if every landlord who sells up removes a renter from the pool? Supply and demand reduced at the same rate - rents stay the same ceteris paribus

Random said...

Members, those poor landlords my heart is bleeding for them ;)
Of course we know DEBT IS BAD(!!!) but not when it comes to speculating on land.

Mark Wadsworth said...

R, I keep meaning to a Fun Online Poll on that topic.

M, excellent reader's letter in the ES! I will post later on.