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Chris Stein

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These measures are less about generating revenue and more about playing to the youth vote. There is a strong social narrative that would justify, to some, these measures continuing.

From: Chris Stein 14 February 2019 14:45 PM

While I agree that it is attractive, don't forget all the taxes which can be far steeper that the commissions and fees you refer to and is certainly way more expensive than for those investing through pensions and ISAs using online brokerages with low transaction fees (some offer no fee costs) and low platform fees. For those investing in ETFs the ongoing management fee can be as low as 0.05%. There are no CGT to pay and through ISAs, no income tax. Through pensions, there's no tax at source. Compare that with purchases made with after-tax money, SDLT, solicitor fees, surveyancer fees, estate agent fees (if you use that route), mortgage payments (going up), income tax (going up), CGT on sale, more agency and survey fees on sale, wear and tear costs, management fees and tenancy finder fees (if you use these services). Added up, there are many more commissions and fees in BTL than in pensions and ISAs, if the correct routes are used. (full disclosure, I use all of the methods and find the pension and ISA route far outstrips the BTL for efficiency. The BTL route makes better use of leverage.)

From: Chris Stein 23 August 2018 10:07 AM

Is equity release a good idea if the people releasing the equity are not earning an income? The article refers to grandparents supporting grand children. Is that a good idea if the financial support comes from the property they live in? That sounds very risky to me. I wonder what their plan is if the market falls.

From: Chris Stein 12 July 2018 09:33 AM

That is completely true Ken. My point for writing what I wrote is that the article makes none of this analysis. Another part of the analysis is social impact. While I am a landlord and an investor elsewhere, my investments in UK Plc funds research and development, increases companies' competitiveness and creates jobs (I'm sure that there are also unintended consequences such as damage to the environment that I am not aware of, just to add balance here). Whereas, owning property limits a resource and makes it more difficult for others. The way leveraging works means that I am more able to buy property, even though I own, than a person who does not own property. The government and the banking system creates an incentive for me to do this and that incentive is entirely against the ethos of a government which is supposed to protect and support its populous. The changes in the tax codes and the new disincentives to buy more BTL, is a direct result of this. By 2020, 75% of the workforce will be Millenials, the age group that are either young families or families-soon-to-be. Osbourne recognised that in order for the Conservatives to remain competitive, more needed to be done for this age group and BTL is an easy villain. If Corbyn were to get into power, I think BTL would be a particular target.

From: Chris Stein 10 April 2018 16:15 PM

@Laurence Meade ... I'm not sure I understand your point. Are you saying this is a good article or not? You say you agree with it but you also call it click bait.

From: Chris Stein 10 April 2018 16:07 PM

If you use an online platform and invest in a SIPP, there are no commission fees. There are platform fees but these are less than 1% in most cases and trading costs can be as low as £5. If you buy in batches of £1000 per transaction, that equates to 0.05% as opposed to potentially 8% of SDLT. What fees to access it are you talking about? Income tax? That is deferred for years. Income tax is paid on rental return in property. Performance is a matter of selection. Purchase of Shopify has grown by more than 25% YTD, though I did not buy it and would not buy shares of a single company due to wanting to diversify. Property gets most of its uplift from leveraging from the banks. property is an asset to banks more than landlords. Pensions are NOT investments. They are tax vehicles. The investments are the things owned in the tax vehicle.

From: Chris Stein 09 April 2018 11:04 AM

This article has no content! Surely an analysis of the two vehicles needs to examine costs vs benefits, to the best of their knowledge. When looking at property the costs include: purchasing costs (surveyor, solicitor, insurance, bank transactions, mortgage and broker fees), purchase taxes (SDLT), maintenance costs (wear and tear, voids, mortgage interest and management fees), maintenance taxes (income, ground rent (if leasehold) and reduced tax relief), sales costs (surveyor, solicitor, bank transactions) and sales taxes (CGT). This article only seems to refer to STATE pension, but what about workplace pensions or SIPPS? The costs are ... well very low and apply only if you are running a SIPP through a broker, online or otherwise, where the transaction fees can be as low as £5 per transaction. Depending on what is bought in the SIPP, the ongoing management costs of an ETF can be as low as 0.1% per annum - as opposed to 3% mortgage interest payments. Finally, there are no CGT on earnings inside the SIPP, though income tax is applied on withdrawal. Even then a person can take out 25% tax free and invest in an ISA where withdrawal will be tax free. There are also the benefits of pensions. Tax is deferred meaning the amount put into the pension pays no tax at source - as opposed to buying property where the money to buy the property is already taxed. There is a 20% uplift on the money invested through the tax deferral and this is even greater depending on a company's pension scheme. Investing in ETFs, as an example, through a SIPP also allows global diversification and would you bet on the growth of the UK property market being greater or less than the growth of India, say, over the next 20 years given that India has a population of 1.3BN people, 66% of which is under the age of 35? Where I am less clear is on the issue of transference to next of kin. My understanding is that this is easier to do through paper assets than transferring property, especially portfolios of property, but I could be entirely wrong on that. I honestly think these articles need to provide FAR more analysis than they do in order to by objective.

From: Chris Stein 09 April 2018 09:22 AM

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