Yes. Which is of course a rip-off. Interest is surely a legitimate business cost and should come out of the profits before taxation. Other businesses can do that, why shouldn't landlords. The effect of course is to add add to landlords' costs ... which prompts them to increase rents to compensate.
Only until that nice Mr Brown & the labour government ended it (MIRAS)
Yes, 0.01% pa on savings was definitely a scam. It's slightly better now, but still less than inflation. Perhaps banks should be forced to quote savings interest "in real terms". They are required to quote an APR, so why not real interest.
You'll find that the cost of a plot with planning permission is most of the cost of a house. (Especially in Kensington!)
We expect that when my mother dies (she's 91) the house will be bulldozed, and a newer bigger one built to fill the plot. A lot of the neighbouring plots have already had it done.
Andy
Max Demian <max snipped-for-privacy@bigfoot.com wrote
Problem with real interest is that there is no real inflation rate, the inflation rate varys wildly with the commodity or charge.
There is an official 'implied deflator' which is used to make sense of GDP 'growth'. GDP values must be adjusted for inflation (monetary, not price) or else they bear no relation to actual growth or shrinkage of the economy. Back when I used to care about these things, I found that the implied deflator used in the UK was usually pretty close to RPI, and not CPI.
Joe snipped-for-privacy@jretrading.com wrote
But neither the RPI nor CPI is the inflation that matters with the real return on an investment,
+1, without a doubt.
Yes. Although what tends to happen is that if you have a £5million plot in Kensington you aren't going to put up a £100k prefab with solar panels on the roof.
In the end it is whatever the builder/developer can make the most out of. The cottage I was renting a few years back had two houses built in its garden. They sold quickly. Then the cottage was renovated and extended. It took over a year to sell. It wasn't very desirable. Neither period nor modern. At leats with a new house getting a mortgage is easy. In theory it will be under warranty and to full modern building regulations.
Rebuild insurance on my house is about half the current 'value'...
It does as you will be using the interest to buy stuff.
Not when neither accurately reflect the change in the prices of the stuff you personally choose to buy.
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