Help Property Investors

The world of property investment has long been the source of personal wealth for many and a driving force in the economy. Recent changes to the Council of Mortgage Lenders guidelines has meant traditional property investors have been "shut out" and the only lending is being given to those that can fulfil the requirements of the Council of Mortgage Lender's Check List i.e. owner/occupiers.

This needs to be stopped right now. If I buy a car that is worth £20,000 for £10,000 and sell it for £20,000, no one bats an eyelid. But if I buy a house for £100,000 that is actually worth £150,000, I'm not allowed to sell that house for six months and even then, the sale price would be governed by the fact that I paid £100,000 for it. Valuers should be trained to value properties for what they are actually worth using type of construction, square footage, part of town, local amenities, schools, hospitals, accessibility for commuting, etc, not relying solely on local area comparisons. They should certainly be totally independent of the lenders (None of this "Times are tough. Devalue everything by 10%" that was going on two years ago).

As we (the taxpayers) still own a large proprtion of the lending institutions, we should force these lenders to provide one or two good quality mortgage products aimed at investors. (Whilst the bank base rate was down around half-a-percent, many buy to let mortgages were still running at around 7%. It's no wonder these organizations recovered as quickly as they did!) These mortgage products should take into account that a good entrepreneur can actually buy a property at one price one day and it is worth much more, even as the sale at that lower price is going through. If we wait until everyone fits into the CML criteria, we won't have a property investment industry to speak of.

Why is this idea important?

The world of property investment has long been the source of personal wealth for many and a driving force in the economy. Recent changes to the Council of Mortgage Lenders guidelines has meant traditional property investors have been "shut out" and the only lending is being given to those that can fulfil the requirements of the Council of Mortgage Lender's Check List i.e. owner/occupiers.

This needs to be stopped right now. If I buy a car that is worth £20,000 for £10,000 and sell it for £20,000, no one bats an eyelid. But if I buy a house for £100,000 that is actually worth £150,000, I'm not allowed to sell that house for six months and even then, the sale price would be governed by the fact that I paid £100,000 for it. Valuers should be trained to value properties for what they are actually worth using type of construction, square footage, part of town, local amenities, schools, hospitals, accessibility for commuting, etc, not relying solely on local area comparisons. They should certainly be totally independent of the lenders (None of this "Times are tough. Devalue everything by 10%" that was going on two years ago).

As we (the taxpayers) still own a large proprtion of the lending institutions, we should force these lenders to provide one or two good quality mortgage products aimed at investors. (Whilst the bank base rate was down around half-a-percent, many buy to let mortgages were still running at around 7%. It's no wonder these organizations recovered as quickly as they did!) These mortgage products should take into account that a good entrepreneur can actually buy a property at one price one day and it is worth much more, even as the sale at that lower price is going through. If we wait until everyone fits into the CML criteria, we won't have a property investment industry to speak of.

Cutting down on the number of road users

This is going to sound a bit draconian and I can hardly believe I'm about to write this. There are a huge number of vehicles on the road that are only used for very short journeys where public transport or (dare I say) walking would be as effective. The problem is that we are being squeezed on prices of vehicles, price of fuel, increased congestion. It hurts but we soon adjust to the pain. What we need is a system where people have to make a deliberate and life changing committment to own and run a car, and they need to make this committment every year.

What I propose is that the government take all tax off of fuel and abolish the road fund license. Instead, replace it with a single "Personal Transport Tax" and a "Commercial Transport Tax" of approximately £10,000 per year and £15,000 per year respectively. For those road users whose business and livelihood depends on their vehicle, there wouldbe a break-even point of say 25,000 for personal vehicles and 35,000 per year for commercial vehicles where their motoring under this new scheme costs about the same as it did under the old scheme. Therefore, people who NEED to use vehicles will be largely unaffected.

However, the rest of us would need to make a decision every year – "Will I get £10,000 worth of use out my vehicle this year?" Most will agree that they will not. You can get a lot of taxis, buses and trains for £10,000 per year. This will drive more people and more money ontoi the public transport system and we can stop subsidizing them with tax payers money. Where there is more money in public transport, competition will appear driving the service quality up. Everyone's a winner. Personnaly, if I had to make that decision right now, I could only justify having one car and that one car does about 40,000 miles per year. The other car would have to go. I think a lot of people would feel the same way.

Why is this idea important?

This is going to sound a bit draconian and I can hardly believe I'm about to write this. There are a huge number of vehicles on the road that are only used for very short journeys where public transport or (dare I say) walking would be as effective. The problem is that we are being squeezed on prices of vehicles, price of fuel, increased congestion. It hurts but we soon adjust to the pain. What we need is a system where people have to make a deliberate and life changing committment to own and run a car, and they need to make this committment every year.

What I propose is that the government take all tax off of fuel and abolish the road fund license. Instead, replace it with a single "Personal Transport Tax" and a "Commercial Transport Tax" of approximately £10,000 per year and £15,000 per year respectively. For those road users whose business and livelihood depends on their vehicle, there wouldbe a break-even point of say 25,000 for personal vehicles and 35,000 per year for commercial vehicles where their motoring under this new scheme costs about the same as it did under the old scheme. Therefore, people who NEED to use vehicles will be largely unaffected.

However, the rest of us would need to make a decision every year – "Will I get £10,000 worth of use out my vehicle this year?" Most will agree that they will not. You can get a lot of taxis, buses and trains for £10,000 per year. This will drive more people and more money ontoi the public transport system and we can stop subsidizing them with tax payers money. Where there is more money in public transport, competition will appear driving the service quality up. Everyone's a winner. Personnaly, if I had to make that decision right now, I could only justify having one car and that one car does about 40,000 miles per year. The other car would have to go. I think a lot of people would feel the same way.