BLT Reprise

If she had bought shares in Tanfield a year ago at 20p they would now be worth 90p either in a SIPP or an ISA both would be totally free of CGT.

How does that compare with your forecast property growth ? and why have you forgotten about CGT on the final sale ?

A She has never heard of Tanfield B She has not 42 years of history in Tanfield to establish a reasonable estimate of future performance indicating buy or sell. C Unless she is prepared to give up career as consultant psychologist to study option trading on the footsie she will unable gear her investment to even a small percentage point of property gains. And then in multiples (a second W Buffet?)With the added expense of a lost lucrative career.

D This BLT is not a day trade, its long term (20 years) who knows what tax legislation will be in force then, maybe Gordon or his successor will have us with 110% stamp duty by then

No-one would in their right mind would try to second guess 20 future tax laws, business means to play the cards as dealt when the time comes.

Well sort your ISP out, or use Google groups. I've addressed most of your points in the other thread, I'm not doing it again.

Average earnings 8.9%pa, RPI 6.4%

That purchase was made at a time when the market was just recovering from a recession.

National house price inflation 9.6%pa, RPI 5.0%

Comparing it with a similar point, 1996 gives -

National house price inflation 8.8%pa, RPI 6.3%

But are you making sensible comparisons ? The market was pretty benign before 1970. Since then there have been a series of cycles and you are measuring from a benign period to a peak. Knock 30% of the latest figure to bring it back to trend.

Personally I think it's one of the worse points in the house price cycle to be thinking of purchasing. See the graph on page 3 of the Nationwide Building Societies monthly review - . The 30 year trend is

Yes using value strategies such as high yield -

TMF posters 11%pa dividend growth over 40 years -

TMF posters 9.5%pa return over 20 years -

TMF posters 11%pa return over 35 years -

I'd use and invest in one of the following, in order of personal preference -

High yield, buy and hold strategy High yield, change each year iShares FTSE UK Dividend Plus Jupiter Income Invesco Perpetual Income Invesco Perpetual High Income

She has now !

Now what is EVERYBODY telling you about history and its relationship to future performance ?

If she properly understands the risks of geared investments then share trading should be simple. I didnt mention option trading.

Keeping an eye on the markets is not a full time job.

I'm not sure if you meant this last point as being against your determined course of action into BTL but it reads that way.

I think that the most likely tax change against your course of action in the next 20 years would be the introduction of a capital tax of some kind (many other countries have one) That could have a serious effect on property prices especially if it applied heavilly to second homes in order to allow more people to buy a first home.

P.S. As she is a high earner has she considered VCT's as part of pension planning ?

"JohnW" wrote

Bacon, Lettuce & Tomato?

Yum!

OK Daytona and thanks for your informed and comprehensive advice, I can put that to her and let her pick the bones.

JW

Sit com? No, he only does stand-up.

I think you should go and look up the inflation figures for the intervening periods you cite, and then come back with a calculation based on increases in real terms as opposed to nominal. Then notice that inflation is currently far lower than the 70's and 80's, and extrapolate the effect this is likely to have on your future projections.

To give you a quick hint - rents are not going to rise at the rates they have done in the past, and nor are house prices. Some would say that they may even fall!