Temporarily Suspend Stamp Duty?

ntlbell

stamp duty is running at 5% now is it?

do you think if you woke up tomorrow and there was a cross the board 5% drop things would start to move?

You're in dream land.

astrofool

No, but it's starts things moving faster than it would otherwise.

Do you seriously think that prices coming down 5% overnight won't help us reach the bottom faster than if we didn't? Seriously?

Blackjack

What about the Government coffers?. Remove the Stamp altogether, just to get the housing market kicked off?.

How does Stamp then get re-introduced?.

gurramok

dats_right does not seem to understand how the housing market works as you need FTB's for the thing to work properly.
You can throw all kind of solutions at it regarding stamp duty but it will have a tiny affect if FTB's do not buy, let me explain in plain english.

Joe has an apt selling for 230k and wants to upgrade to a 2bed hse for 300k so puts apt on market.
Mary has a 300k 2bed hse up for sale as she wants to expand her family with children on the way so is on the hunt for a 400k 3bed semi.
Jack has a 400k 3bed semi for sale and wants to move to a more upmarket area to buy a 500k 4bed semi for his big family.
Jill has a 500k 4bed semi for sale and wants to move to a posh area having a great paying job and wants to buy a 600k mansion.
Rupert has a 600k mansion for sale and wants to rent/emigrate etc

Joe is having problems selling his apt at 230k as no new buyers will buy his apt at that price which is pitched at new entrants so he has to reduce price to entice a buyer called Patrick and still waits but Patrick still cannot afford the apt as he has not enough savings for a 92% mortgage plus he cannot get the 211k mortgage from the bank as he simply does not earn enough to qualify for that amount.

Mary, Jack & Jill are all waiting for a buyer in the chain but sales are falling through as Joe is holding things back in the chain who blames Patrick.
Rupert is just frustrated, his mansion is pitched at Jill's demographic but Jill cannot sell because Jack is holding things back for her due to Jack not being able to shift his gaff.

Jack is frustrated at Mary and Mary is frustrated at Joe along the chain and start cursing the estate agents as well as viewers for lack of movement.

As Patrick pays no stamp duty anyway, he is blamed by the media and vested interests for waiting on the fence due to no fault of his own.
Joe, Jack, Mary, Jill cannot sell their houses and no stamp duty ends up getting paid, they all blame Patrick.

Get it?

dats_right

gurramok wrote: »

dats_right does not seem to understand how the housing market works as you need FTB's for the thing to work properly.

I am a solicitor who until recently worked mainly in property (commercial and residential), who now spends more time working in litigation/employment/debt collection and probate, so I think you could safely say I am at the coalface, and unlike many of the posters on here who depend on George Lee or ESRI stats that are months out of date before they are released for their opinions, I have real experience of what is actually happening not anecdotal evidence!

On this basis, I think that I understand the market better than most lay observers, and I fully accept the importance of FTB's to the market, but they are by no means the be all and end all, in fact the vast majority of activity even during the boom was not FTB related! So whilst FTB's are important there is a whole lot of others out there who might be tempted back into the market if stamp duty was to be suspended for 6-12 months, as I've said now ad nauseam, the people who may be enticed by such a move to come back tothe market are trader-uppers and commercial entities.

Astrofool has hit the nail on the head:

That's over a whole year if not more, reforming stamp duty can drop another significant % of those prices overnight. (as well as increasing market mobility and stability of tax returns in the long run).

It seems that some commentators are falling into the same trap that they did when prices were increasing enormously, when they told us these price rises and boom would continue forever and that the "fundamentals" will ensure this, now they are telling us that owing to the 'new fundamentals' property is more or less doomed and only head cases would buy now.. Whereas history has shown us that the reality is that these things move in cycles, we may not have reached the bottom of this one yet but we will and then as time ticks by things will increase again. I don't have a glass-ball so I don't know how long it will take for people to regain confidence in the market, indeed some may never regain confidence at all, and it may well take a full generation but one thing is as sure as I'm sitting at my computer typing this reply is that the property market will at some time in the future be part of another boom-bust cycle.

I have no doubt that as soon as the banks have some money to lend again that things will start to function on some level again. On this point NTLBell, have you actually attempted to draw down any money from a bank recently? Sure, I've had problems with banks who have issued loan offers to extremely wealthy clients, the sort of people who banks wet themselves over usually, who were taking out a mortgage with a LTV of about 35% and banks doing everything then can to impede them. I can assure you that they, the banks, will put every hurdle in your path to prevent you and then when you've cleared them all they will throw in a few more 'whammies' in there just for good measure! The banks have lied all along, so why do you suddenly believe them now anyway?

Guys, THIS THREAD IS NOT ABOUT FTB's, so can I please urge those who want to focus on that particular issue to start another thread on that point.

In reply to Blackjack, who asked:

What about the Government coffers?. Remove the Stamp altogether, just to get the housing market kicked off?.

How does Stamp then get re-introduced?.

1. Government coffers? the whole point is that the market has seized anyway and virtually no activity is taking place (=no tax take). This lack of activity is also costing the jobs of people directly and indirectly connected with the market, when they hit the dole queues is that going to help the coffers? And besides the government can claim 21.5% vat on the fees charged by both solicitors and the estate agent, so it can be argued that some money is better than none.
2. I didn't say remove it altogether, I said temporarily suspend and nor did I limit it to just the housing market, I said across the board, so that businesses who may be in a position to buy can do so and save 6% in the process. And what would be wrong with a stimulus to help things get back to normal, afterall isn't that what Governments are there to do? Or would you rather they sit back and watch as thousands of jobs are lost in the sector (not referring to construction related).
3. How does stamp duty get re-introduced? Simple the same way any other tax is introduced i.e. from midnight on a particular day it now becomes payable, just like the 1% employment levy recently introduced.

ZYX

gurramok wrote: »

dats_right does not seem to understand how the housing market works as you need FTB's for the thing to work properly.
You can throw all kind of solutions at it regarding stamp duty but it will have a tiny affect if FTB's do not buy, let me explain in plain english.

Joe has an apt selling for 230k and wants to upgrade to a 2bed hse for 300k so puts apt on market.
Mary has a 300k 2bed hse up for sale as she wants to expand her family with children on the way so is on the hunt for a 400k 3bed semi.
Jack has a 400k 3bed semi for sale and wants to move to a more upmarket area to buy a 500k 4bed semi for his big family.
Jill has a 500k 4bed semi for sale and wants to move to a posh area having a great paying job and wants to buy a 600k mansion.
Rupert has a 600k mansion for sale and wants to rent/emigrate etc

Joe is having problems selling his apt at 230k as no new buyers will buy his apt at that price which is pitched at new entrants so he has to reduce price to entice a buyer called Patrick and still waits but Patrick still cannot afford the apt as he has not enough savings for a 92% mortgage plus he cannot get the 211k mortgage from the bank as he simply does not earn enough to qualify for that amount.

Mary, Jack & Jill are all waiting for a buyer in the chain but sales are falling through as Joe is holding things back in the chain who blames Patrick.
Rupert is just frustrated, his mansion is pitched at Jill's demographic but Jill cannot sell because Jack is holding things back for her due to Jack not being able to shift his gaff.

Jack is frustrated at Mary and Mary is frustrated at Joe along the chain and start cursing the estate agents as well as viewers for lack of movement.

As Patrick pays no stamp duty anyway, he is blamed by the media and vested interests for waiting on the fence due to no fault of his own.
Joe, Jack, Mary, Jill cannot sell their houses and no stamp duty ends up getting paid, they all blame Patrick.

Get it?

So in the mean time Patrick is homeless or have you missed out on something?:)

ntlbell

astrofool wrote: »

No, but it's starts things moving faster than it would otherwise.

Do you seriously think that prices coming down 5% overnight won't help us reach the bottom faster than if we didn't? Seriously?

Not fast enough to make it worth while no. as we have all ready established SD isn't a problem for FTB's who don't pay stamp duty and these are the people we need buying again to get things moving...

around in circles we go...

ntlbell

ZYX wrote: »

So in the mean time Patrick is homeless or have you missed out on something?:)

Hopefully Patrick is using the nogging has moved into a nice apartment as rents are dropping enabling him to keep saving so when where he wants to live becomes affordable he will not only have a deposit but be able to put more money off the asset reducing his monthly outgoing pay less in interest and to sustain his current lifestyle.

dats_right

ntlbell wrote: »

stamp duty is running at 5% now is it?

do you think if you woke up tomorrow and there was a cross the board 5% drop things would start to move?

1. No, you are way off. Stamp duty rates for residential property (owner occupiers and investors) are at 7.5% on amounts over first 125k (which is exempt) up to 1 million and 9% on amounts over that and 6% for non-residential.

2. Yes, to some extent I believe it would, whilst I don't think it would be a magical cure, but I do certainly think it may encourage some of the many people who are presently holding off from buying to consider getting involved in the market again as naturally people would rather put money directly towards the purchase price of a property rather than towards buying an expensive Government sticker/stamp to go onto the Deed of Transfer. Say for example a house that was previously 1.2m can now be bought for say 750k, the stamp duty on such a purchase would be a staggering €46,875, if that was temporarily suspended it would undoubtedly entice some people to consider purchasing.

Presently businesses have to pay 6% on the entire purchase price/ consideration. Remember that not all businesses are suffering from the current economic climate and may well take such an opportunity to purchase a new premises or maybe even purchase their existing rented one from landlord and by so doing make significant savings. Example ABC & Co., have been renting under a 35 year lease with 5 yearly upward only rent review clauses and no break clause (all three are very common in commercial property), they approach landlord to sell freehold to them, as landlord can do with massive cash injection rather than slow and steady cash over prolonged period decides to sell, the property is sold for 1.75m (stamp duty would usually be 105,000k) every body walks away happy. And the Government recoup some money from the 21.5% vat charged on the professional services of Surveyor, Auctioneer, Solicitor and of course Land Registration fees, as well as helping to keep these people in jobs and not joining dole queues. What is your problem with this?

ZYX

ntlbell wrote: »

Hopefully Patrick is using the nogging has moved into a nice apartment as rents are dropping enabling him to keep saving so when where he wants to live becomes affordable he will not only have a deposit but be able to put more money off the asset reducing his monthly outgoing pay less in interest and to sustain his current lifestyle.

So does he rent from Joe, Mary, Jack, Jill or Rupert?

ntlbell

ZYX wrote: »

So does he rent from Joe, Mary, Jack, Jill or Rupert?

he rents from canny mc savvy

blah

ntlbell wrote: »

he rents from canny mc savvy

Who bought a house in Ranelagh in 1972 for nigh on £6, 4s and 2d

gurramok

dats_right wrote:

On this basis, I think that I understand the market better than most lay observers, and I fully accept the importance of FTB's to the market, but they are by no means the be all and end all, in fact the vast majority of activity even during the boom was not FTB related! So whilst FTB's are important there is a whole lot of others out there who might be tempted back into the market if stamp duty was to be suspended for 6-12 months, as I've said now ad nauseam, the people who may be enticed by such a move to come back tothe market are trader-uppers and commercial entities.

Again, you do not seem to understand.

Each buyer/seller is dependent on another for activity. FTB's are indeed a minority of activists but everyone else on the ladder depends on them to get activity returning again so yes FTB discussion in this thread is 100% relevant.
Once activity returns based on this, you will get your stamp duty suggestion applied.

No offence but if you claim to be a solicitor who is/was at the coalface of the property market, it does not show good light on your profession not to understand the property ladder.

ntlbell

gurramok wrote: »

Again, you do not seem to understand.

Each buyer/seller is dependent on another for activity. FTB's are indeed a minority of activists but everyone else on the ladder depends on them to get activity returning again so yes FTB discussion in this thread is 100% relevant.
Once activity returns based on this, you will get your stamp duty suggestion applied.

No offence but if you claim to be a solicitor who is/was at the coalface of the property market, it does not show good light on your profession not to understand the property ladder.

To be honest gurramok you're just a lay observer so your opinion doesn't hold much weight around these here waters.

It's not like your Austin Hughes.

astrofool

gurramok wrote: »

Again, you do not seem to understand.

Each buyer/seller is dependent on another for activity. FTB's are indeed a minority of activists but everyone else on the ladder depends on them to get activity returning again so yes FTB discussion in this thread is 100% relevant.
Once activity returns based on this, you will get your stamp duty suggestion applied.

No offence but if you claim to be a solicitor who is/was at the coalface of the property market, it does not show good light on your profession not to understand the property ladder.

FTB's are needed to fill empty houses, people can still move house without an FTB being involved at all (and this still generates work, and allows people to move countries, move jobs etc.).

Macha

ntlbell wrote: »

To be honest gurramok you're just a lay observer so your opinion doesn't hold much weight around these here waters.

It's not like your Austin Hughes.

And we all know where blindly following the self-determined "experts" has gotten us. There's education and then there's common sense.

This is a chat board for everyone to express their opinion, not just people with a title or certificate on their wall.

ntlbell

taconnol wrote: »

And we all know where blindly following the self-determined "experts" has gotten us. There's education and then there's common sense.

This is a chat board for everyone to express their opinion, not just people with a title or certificate on their wall.

It was tongue and cheek as dats_right was calling people here layman observers with austin being regarded as comical austin it was just a bit of nuddging to gurramok I know very well how good a poster he is.

whizzbang

Like all good pyramid schemes you always need new people joining at the bottom. Its that simple. Once the new joiners dry up it all collapses down until some new joiners are found.

Macha

ntlbell wrote: »

It was tongue and cheek as dats_right was calling people here layman observers with austin being regarding comical austin it was just a bit of nuddging to gurramok I know very well how good a poster he is.

Doh...so sorry. I forgot to turn on my sarcasm radar this morning.

Apologies.

A good site for showing up the experts is the quotes that come up on www.irishhometruths.com/

gurramok

astrofool wrote: »

FTB's are needed to fill empty houses, people can still move house without an FTB being involved at all (and this still generates work, and allows people to move countries, move jobs etc.).

Good point. Somebody banded a figure about that FTB's buy around 50% of housing as new builds.
Point about Patrick still stands to help the 2nd hand market get moving again and support the OP's point about stamp duty.

ntlbell wrote:

It was tongue and cheek as dats_right was calling people here layman observers with austin being regarded as comical austin it was just a bit of nuddging to gurramok I know very well how good a poster he is

Thank you

Now, Patrick should buy because Austin and Sherry Fitz says so :rolleyes:

dats_right

gurramok wrote: »

Again, you do not seem to understand.

Each buyer/seller is dependent on another for activity. FTB's are indeed a minority of activists but everyone else on the ladder depends on them to get activity returning again so yes FTB discussion in this thread is 100% relevant.
Once activity returns based on this, you will get your stamp duty suggestion applied.

No offence but if you claim to be a solicitor who is/was at the coalface of the property market, it does not show good light on your profession not to understand the property ladder.

I really don't know why I am bothering, because for whatever reason you seem to have a very closed outlook on the problem and an unhealthy obsession with FTB's.

1. It is you who has the difficulty understanding. I suggest you re read my posts very carefully.

2. Where did you learn about 'chains' was it from an A-Z of the Property Market in the Irish Independent or something? Not every sale/purchase is dependent on a chain, and even the ones that do for the most part aren't dependent on any FTB's.

3. It's laughable that you are telling me I don't understand the property ladder. I suppose that one time you bought a house makes you an expert?

You are of course entitled to your opinions but you have not expressed any views other than those referring to FTB's, which is not who I am referring to. Anyway, I don't intend responding further to you on these same points.

NTLBell, I would suggest that my remark about lay observers was factual and in no way tongue in cheek as you put it, as I would imagine that that's exactly what most posters are, that's not to say however that they can't have a valuable input, just that their experience is dependent on second hand sources and hearsay. Whereas Gurmok's remarks where far more personal and critical of me, and his armchair expert analysis obviously outweighs mine and others actual experience and knowledge.

And as for Austin Hughes being an expert? His bank is well and truly in the sh*t and all but shut to new business, so I wouldn't be putting to much faith in good old Austin! It's easier to get blood from a stone then to drawdown money from them..

CAN WE PLEASE NOW FORGET ABOUT BLOODY FIRST TIME BUYERS!!

Macha

dats_right wrote: »

CAN WE PLEASE NOW FORGET ABOUT BLOODY FIRST TIME BUYERS!!

ie, you want to have the last word on the subject.

Your comments re learning from the Irish Indo/buying one house are condescending and unnecessary confrontational. Opinions expressed on "amateur" websites like the Property Pin have been far closer the the mark than those of banks, politicians, estate agents and other vested interests.

MicraBoy

Now is a good time to abolish or reduce SD to say 1% flat rate across the board, because it during the boom time any reform would have simply been absorbed into house prices by sellers. In the falling market this will not happen. it is an opportunity that should seized upon.

It might have a stimulating effect on some sectors of the market, for example people trading up from there first home who are relying on equity in there homes to pay the SD for the trade up, can now make the move inspite of having lost a certain proportion of that equity.

I'd agree though some other measure would need to be introduced to compensate the states coffers. Council tax? Water charges? :eek::eek::eek:

ntlbell

dats_right wrote: »

NTLBell, I would suggest that my remark about lay observers was factual and in no way tongue in cheek as you put it, as I would imagine that that's exactly what most posters are, that's not to say however that they can't have a valuable input, just that their experience is dependent on second hand sources and hearsay. Whereas Gurmok's remarks where far more personal and critical of me, and his armchair expert analysis obviously outweighs mine and others actual experience and knowledge.

And as for Austin Hughes being an expert? His bank is well and truly in the sh*t and all but shut to new business, so I wouldn't be putting to much faith in good old Austin! It's easier to get blood from a stone then to drawdown money from them..

CAN WE PLEASE NOW FORGET ABOUT BLOODY FIRST TIME BUYERS!!

You seem to have an issue with following posts. I never said your comments were tongue and cheek I said mine were to Gurramok.

How do you know what they're basing their opinion on? maybe they're just using a bit of common sense? it's not rocket science.

Let me put it to you like this based your posts here I would make the assumption you haven't the first clue about what's really going on and I would prefer to pay Gurramok for his "laymans" opinion that pay you for your professional one.

again the Austin was the tongue and cheek joke that you missed.

You can't have this conversation without talking about FTB's they're vital to all the steps on the ladder above.

subway

without FTB's all you have left are investors.
investors with cheap credit fuelled the bubble, and now the bubble is bursting they are all getting burned.
maybe already, maybe in 12 months time when prices have dropped further, but sooner or later most property speculators from the last 5-6 years will get burned by negative equity.
with rents dropping and tenants dissapearing they will need to sell, and as the stock for sale increases the prices will drop.
there are already 330,000 empty houses in this country that arent selling, add the second houses to that and see what you end up with. a shed load of over priced stock.

any investor with half a brain wont buy into that and sales wont happen.
investors will get back in when there is money to be made.
trader uppers will move when they can sell their house and get good value on the trade up
FTBs will buy when they can afford it.

so, in reverse order -
FTBs will start to buy again, kicking off chains
trader uppers will be able to sell their homes completing chains.
Investors will see a market that is liquid and will buy in if there is money to be made.

there is no other way about this, reduce the price, clear the stock overhang, restore liquidity to the market.

Blackjack

dats_right wrote: »

Guys, THIS THREAD IS NOT ABOUT FTB's, so can I please urge those who want to focus on that particular issue to start another thread on that point.

In reply to Blackjack, who asked:

1. Government coffers? the whole point is that the market has seized anyway and virtually no activity is taking place (=no tax take). This lack of activity is also costing the jobs of people directly and indirectly connected with the market, when they hit the dole queues is that going to help the coffers? And besides the government can claim 21.5% vat on the fees charged by both solicitors and the estate agent, so it can be argued that some money is better than none.
2. I didn't say remove it altogether, I said temporarily suspend and nor did I limit it to just the housing market, I said across the board, so that businesses who may be in a position to buy can do so and save 6% in the process. And what would be wrong with a stimulus to help things get back to normal, afterall isn't that what Governments are there to do? Or would you rather they sit back and watch as thousands of jobs are lost in the sector (not referring to construction related).
3. How does stamp duty get re-introduced? Simple the same way any other tax is introduced i.e. from midnight on a particular day it now becomes payable, just like the 1% employment levy recently introduced.

For a start, if you don't appreciate the importance of the FTB to the property market, then theres not a lot I can help you with. New entrants are absolutely essential to any market, unless you want to close it off. Never a good idea.

As regards "no money is better than some money" - care to put a figure on the VAT earnings vs the Stamp earning?. Just interested to see how they would compare.

As for businesses buying property, seriously, until the market finds the floor, why would a business want to own it's own property?. It's not necessary, it reduces the opportunities for expansion as regards mobility (have to find a buyer before you can seriously move), it exposes unnecessary risk to the property market (self explanatory) and ties up capital that can be better used elsewhere.

And when it comes to re-introducing stamp, what measures are you proposing?. Do you suggest that we immediately re-introduce the current rates and no one will notice?. What happens to the re-stimulated market then, does it honestly continue?.

johnnyskeleton

dats_right wrote: »

True, but this is because 1. The one's who would like to borrow to buy now now have to find large very large deposits of up to 20%, which of course takes time to accumulate such a deposit, and 2. Many FTB's are holding off buying in the reasonable expectation that prices will continue to fall, but this ultimately only worsens the problem as we get into a catch-22 situation because as prices continue to fall so to will the banks willingness to lend money for property.

I'd say there are two options, first there are the people who have the money, but who think house prices are too high and so will not pay the current asking prices. Second, there are the people who want to buy but don't have the deposit. The banks are, sensibly enough, refusing these people as the risk of negative equity default is too great. It's not so much a catch-22 as a situation where some people realise that prices are too high, the others have the banks to keep them from making a foolish decision.

dats_right wrote: »

This country has an irrational obsession with FTB's and in any event the proposal would have no impact on them so we really shouldn't be focussing on them, who I'm really referring to is 1. Potential trader-uppers 2. Cash rich potential investors who might feel that in the long term (i.e. 10-20+ years) good properties in good locations represent a reasonable investment, and 3. Businesses who may view such a suspension as a good opportunity to acquire property.

1. The difficulty for trader-uppers is that they need FTBs or other trader uppers to buy their first property. A lot of them are don't have a separate deposit for the trading up house, they were relying on the deposit to come out of the growth in equity. As this evaporates, they find themselves in a situation where if they drop their prices they will no longer be able to pay the deposit on their trade up house. If they don't drop their house it won't sell.

2. The difficulty for investors is that they need a good yield. During the boom, with double digit capital appreciation on an interest only loan the yields were phenominal. But now, with lower rents, high prices and capital depreciation, you're talking about gross yeilds of about 2-3% with possibly negative net yields (when taking in expenses & capital depreciation). To be honest, the best advice for cash rich investors at the moment is to hold cash, bonds & precious metals with very small exposure to equities and no little or no exposure to property. Investors can always sit on their liquid assets and get into property in a few years when the prices have dropped to reasonable levels.

3. The situation with businesses is that owning property as opposed to renting has a number of disadvanatages. They don't want to tie up capital, rents are cheaper and sometimes better for tax purposes and rental properties are easier to dispose of when business requires it.

dats_right wrote: »

I wouldn't expect a suspension of stamp duty to be the cure to all the markets woes, but it would certainly entice certain people, who are so inclined, to re-enter the market. I certainly wouldn't be expecting an enormous rush, but as stated it would encourage some level of activity and as a result certain other ancillary benefits would flow therefrom e.g. certain jobs might be saved, VAT on professional services such as Estate Agent's fees, solicitors fees, etc. and perhaps even renovations and ancillary works, etc. As I see it, the suspension wouldn't cost the exchequer an awful lt, because as things stand the market has more or less seized and by such action the ancillary benefits are clear.

If the government really wanted to get things moving, they could replace stamp duty with U.S. style annual property tax (as opposed to LA rates). This would keep the revenue stream and would encourage people to sell empty properties. It would put pressure on everyone to sell. However, this would be politically difficult to achieve, as the voters would hate it.

As has already been said, property will only start selling again when prices fall back to historical norms. Typically in the bust after every boom all the gains of the boom are wiped out.

As an aside, there is an interesting discussion on the effective incidence of stamp duty on this thread: http://www.thepropertypin.com/viewtopic.php?f=4&t=16308&hilit=stamp+duty+incidence

johnnyskeleton

dats_right wrote: »

I work in this area and have actual experience with what is happening and I can assure you that the propaganda that the banks are 'open for business' is in stark contrast to the reality on the ground, as this is most certainly not the case!! I can give many, many examples of this, unfortunately the harsh reality is that banks have become 'reluctant' to lend to virtually everybody.

I think this is more of an indictment of the easy credit days than it is a criticism of the banks current prudence. They are refusing mortgages to people with poor credit ratings, too much other debt, not enough of a deposit, no job security, no certified acccounts (if self employed), BTL investors at all. Most of these people would get a mortgage during boom time. In other instances, where someone is a good credit risk, the asking price of the property is still above the banks own valuation. So if someone has a €60k 20% deposit on a 300k property which the bank values at 250k, they will need 20% of 250k (50k) plus the difference which the bank will not cover. So to buy the property for €300k with an 80% ltv mortgage they will need to come up with €100k, or 33% of the asking price.

On the other hand though, the government's Home Choice Loan scheme should be coming online soon, so that people will be able to get unsustainable finance yet again.

dats_right wrote: »

That's great, but how do you propose homeowners sell houses if they are in negative equity? Don't you think the banks might have something to say about that? The answer of course is yes, the banks will only allow negative equity homeowners to sell if they can also pay the shortfall also.

The banks will often accept a sale and write off all or part of the shortfall or else turn it into a personal loan. Primetime on monday interviewed a couple who did this and who are now paying €800 a month on a property that they no longer live in.

dats_right wrote: »

Anyway, NTLBell you are still focussing exclusively on FTB's despite my reiteration that I am not referring to FTB's because they don't pay stamp duty anyway, so this thread has no application towards them and is not intended to be a discussion on FTB's, it is purely focussing on the narrow issue of temporarily suspending stamp duty in order to encourage certain specified parties back into the market, therefore I respectfully suggest that if you want to discuss those issues relating to FTB's that you start a thread on that particular aspect of the market.

It's all a rich tapestry, and ntlbell's point is that the ladder doesn't work without new entrants.

johnnyskeleton

dats_right wrote: »

I really don't know why I am bothering, because for whatever reason you seem to have a very closed outlook on the problem and an unhealthy obsession with FTB's.

1. It is you who has the difficulty understanding. I suggest you re read my posts very carefully.

2. Where did you learn about 'chains' was it from an A-Z of the Property Market in the Irish Independent or something? Not every sale/purchase is dependent on a chain, and even the ones that do for the most part aren't dependent on any FTB's.

3. It's laughable that you are telling me I don't understand the property ladder. I suppose that one time you bought a house makes you an expert?

You are of course entitled to your opinions but you have not expressed any views other than those referring to FTB's, which is not who I am referring to. Anyway, I don't intend responding further to you on these same points.

As you are aware, I have strong views on posts of the "I am an X, so whatever I say is right and I don't have to explain why or point to any evidence to support my theory". Suffice it to say that this is an anonymous forum and your experiences are no better or worse than anyone elses.

dats_right wrote:

Whereas Gurmok's remarks where far more personal and critical of me, and his armchair expert analysis obviously outweighs mine and others actual experience and knowledge.

As much as I disagree with Gurramok on pretty much everything else, he is right in this scenario. Ignoring FTBs is ignoring a very important part of the equation. Thepropertypin.com has a number of posters such as Mortgage Broker (who is a media savvy mortgage broker), Mr_Anderson (who is an estate agent) and Sisfter(he's represents the bad guys ), so you can exchange views with them. However, I'm certain they will have the same veiws as Gurramok.