Buying a House

[businessowner350]

Hi Everyone,

As we all know, house prices are at an all time low. I'm mulling over the idea to buy a property, in the hopes that in the long term this would be a good investment.

Then I had a second though: Should I get my limited company to buy the house instead of me personally? I'm guessing that this would "strengthen the balance sheet" right?

What benefits/pitfalls would there be for the LTD to buy the house?

I don't actually need to live in the house for another 3 or 4 years, and could probably pay about 57% of the cost of the building in cash (The rest would have to be a mortgage).

What you think? I'm obviously very naive, having never bought a house before at all (So I'm probably underestimating the difficulties of getting a mortgage...)

Any tips are appreciated

Thanks

 

[QuickHomeBuyers]

Property ladder is still difficult as it used to be but if you have higher income than the average Joe and as you mentioned 57% deposit, I can't see any problem.

However,

a. House prices are not all time low.
b. Getting a residential mortgage product for a LTD is nearly impossible if not impossible. There used to be products for BTL using LTD but the days are long gone.

The only possible way to overcome you problem is to speak to a commercial/private bank and see if they have any interest in your proposition, unless the amount is worth their consideration, you will struggle.

Even if you jump all the hoops and are able to secure lending, the taxman won't leave you alone. You will pay more in taxes than you will save in any possible corporation tax, however seek professional tax advice as your circumstances may be different.

 

[Spongebob]

As we all know, house prices are at an all time low.

WHAAAAT???!!!

Are you quite mad?


Historically over the last 80 years or so the average price of the average house has been around 3 times the average household income.

Average household income is currently around £35,000 while the average house price is £160,000.

This suggests that house prices are currently overvalued by around 30%. Inevitably as they fall there will be an overshoot and so under normal circumstances it would be reasonable to expect them to fall by up to 40% over the next few years.

Of course interest rates are currently artificially low which makes a big difference; perhaps a drop of only 20% or so is to be expected in the near future.

Whichever way you look at it, the current climate is an awful one to be thinking of buying residential property as an investment.