How to help unemployed single mum onto the housing ladder?

clutton_2

many landlords already will not take DSS, and many lenders will not allow landlords to rent to DSS either (although how the lender will know if they do is another matter).

i have 60%/40% HB/working tenants, and i am wondering how to approach this new legislation, as i am not willing to risk repossession if a tenant does not pay me my rent (via HB or privately) - so it is a huge moral and financial dilemma to be faced over the next few years.

There is a clause in the proposed Direct-Tenant-Payment scheme whereby a "vulnerable" tenant can ask the local authority to pay the landlord direct - but who wants to be called vulnerable ? Most of my HB tenants dont WANT the rent sent to them, in case they spend it on other things !!!

But, having come from a poor background, i well know that if the rent cheque arrives and kids dont have food, then the rent money goes on food, of course it does.

An interesting time to come ............ but, tenants will suffer, for sure they will.

natwill_3

Thats interesting...I didn't know that mortgage companies could refuse a blt mortgage for DSS tenants...Isn't that discrimination, legally I mean.

Sounds like testing times, HMO sounds a nightmare, why on earth sinks in every room...thats sounds expensive

jyonda

[QUOTEI attend a wide variety of national meetings and landlord association meetings, and it is pretty well all over the country that landlords feel that fairly soon no profit at all will be made, so, what will be the point in continuing in the business.QUOTE]

If that dissuades new BTL's then I'm all for it but I can't quite see ALL landlords jacking it in and growing organic vegetables or whatever they'd be doing otherwise. Whether money can be made or not is surely dependant on whther they own the property outright. This isn't the case in many BTL situations and I would also like to point the finger of blame at the lenders who substituted FTB's with BTL's.

Do private lanlords (ie not companies) have to pay income tax on the whole of the rental income or just the bit after the mortgage/overheads have been met ie the net profit? If so doesn't this mean they are getting tax relief on the mortgage?

natwill_3

jyonda wrote:

[QUOTEI attend a wide variety of national meetings and landlord association meetings, and it is pretty well all over the country that landlords feel that fairly soon no profit at all will be made, so, what will be the point in continuing in the business.QUOTE]

If that dissuades new BTL's then I'm all for it but I can't quite see ALL landlords jacking it in and growing organic vegetables or whatever they'd be doing otherwise. Whether money can be made or not is surely dependant on whther they own the property outright. This isn't the case in many BTL situations and I would also like to point the finger of blame at the lenders who substituted FTB's with BTL's.

Do private lanlords (ie not companies) have to pay income tax on the whole of the rental income or just the bit after the mortgage/overheads have been met ie the net profit? If so doesn't this mean they are getting tax relief on the mortgage?

Hi

They will only pay tax on their net profit, ie after mortgage interest.

But they will pay capital gains at some point if they sell. 40% CGT maybe lower with taper relief

clutton_2

BTL is a business like many others. I am allowed to claim all legal expenses i incur in my business - yes, these expenses include my mortgage repayments, why shouldn't they ?

A shop-keeper claims his rent as a legitimate business expense.

They also include repairs, insurance, phone calls, credit checks, court fees for evictions, travel to the property, CORGI inspections etc etc. If i make a profit i pay tax like any other business.

jyonda

So if they don't sell they can carry on making money from it indefinitely having never paid any tax? If landlords get tax relief on mortgage payments why shouldn't homeowners with just the one roof over their heads?

natwill_3

jyonda wrote:

So if they don't sell they can carry on making money from it indefinitely having never paid any tax? If landlords get tax relief on mortgage payments why shouldn't homeowners with just the one roof over their heads?

Er they do pay tax....like any other business...they are allowed to offset expenses of trade against income...

Sorry I think you are missing the point here

Bemused accountant!

clutton_2

""""If i make a profit i pay tax like any other business."""

jyonda

Not strictly true if the 'profit' is the property itself and you never sell it on. That would be a state assisted purchase in my book.

seven-day-weekend

clutton wrote:

"""The new requirements, particularly for properties classed as HMO (houses in multiple occupation) are causing huge amounts of discussion and different local authorities are interpreting the Act in different ways. Suffice it to say that it will cost landlords more money to bring properties up to unnecessarily high standards, and they will have to now pay license fees for these properties, and there is no ceiling limit on these fees.

Some local authorities housing departments see some of these changes as so ridiculous, that they are giving landlords 5 years to comply with for example the requirement to put a sink in every room - in the hope that government can be made to see sense.

£20,000 fines are on offer for non compliance.

.

I am dreading my house in the Uk being classed as a HMO. It is lived in by our son and two lodgers and the idea is to make it virtually self-funding, as our son cannot afford to live there on his own and we cannot afford to subsidise it. At the moment this is working.

If, however, it is classed as a HMO, then there is no way we will be able to meet the expense of the ridiculous regulations.

What will happen then? Well, we'll have to get rid of the lodgers so that it is no longer a HMO. That's two homeless young men.

Then our son will not be able to afford to live in it on his own, and we won't be able to afford to help him, so he'll apply for a council place where he can get HB.

He won't get anywhere as he is 'adequately housed'. So we will have to chuck him out. That's another homeless young man.

The house is then empty with no-one to look after it, so we'll have to sell it or rent it to a family. (While our son is still homeless)

All we are trying to do is keep our family home, in which our son has a right to live, and enable us to keep it and him to live in it. In the process we give a home to two other single young men.

Nothing wrong with that, surely? But if it's classed as a HIMO, we won't be able to keep it this way.

(Sorry, off topic).