The Buy-to-let boom is back

Cleaver

nollag2006 wrote: »

The electorate heavily penalised the Tories for the crash in the early 90's, and booted Labour out for the crash of 2008.

There are a whole host of more significant reasons why Labour lost the last election. And when it comes to voting I don't know a single person who votes for a political party based on them keeping house prices high.

COOLTRIKERCHICK

abaxas wrote: »

Nail head.

Volume of !!!!!! is better than a small amount of good. But be prepared for the tenants to rip the places to bits.

this can happen in any property.. this is the risk and gamble you take...

but it is better to invest your money etc in a few properties than one or good high end ones...you are taking more of a gamble with your money

nollag2006

abaxas wrote: »

...But be prepared for the tenants to rip the places to bits.

I do find this contempt for tenants to be very disconcerting.

Any tenants I have had to date have been decent honourable people.

Yes - due diligence is necessary, but why all the hostility and contempt for tenants?

abaxas

nollag2006 wrote: »

I do find this contempt for tenants to be very disconcerting.

Any tenants I have had to date have been decent honourable people.

Yes - due diligence is necessary, but why all the hostility and contempt for tenants?

Just I helped out a mate of a mate years ago with his business.

He had just over 200 bottom end flats rented out. Rentals (2003) were about 350pm and they were full of low end workers or DSS.

Yes, they ripped the places to bits. Most needed redecoration when the tenant left. But in the crap end of the market, it's a pure volume game. Cashflow is king and who cares if you need new carpets every 3-5 years. It's one months rent out of 30.

Cashflow is king in ANY business.

the_flying_pig

nollag2006 wrote: »

No government wants a house price crash during their term in office.

The electorate heavily penalised the Tories for the crash in the early 90's, and booted Labour out for the crash of 2008.

Like it or not, the government will do all it can to strengthen the housing market.

I'm not sure how true this is.

John Major [a weak candidate if ever there was one] still won in Spring 1992, a time when we'd been through most of the early 90s house price falls. By the time Bliar won in '97 we were back into pwoperdee inflation.

You only have to look at the way that Ponzi Brown [the high priest of HPI] is now perceived to appreciate that house price inflation isn't the be all and end all of vote winning.

And even though its members are appointed politically individual BoE decisions are politically independent.

Lastly, home ownership has been going down for a little while now. The number of potential gainers from house price falls is rising, the number of losers shrinking.

Graham_Devon

michaels wrote: »

So tax a business based on turnover rather than profit - would that really make sense? The problem (high housing costs whether for renting or buying) is a shortage of homes, increasing tax on the supply of homes doesn't sound like a solution that will increase the supply.

Special taxes apply to lots of things. Green taxes. Carbon taxes. Waste taxes.

All you need to do is tax BTL and second homes more on buying or selling.

Discourages all the accidental landlords and those looking solely for HPI (enough problems with landlords, and I'd be quite happy to suggest its those just looking for capital gains that cause most issues). Discourages buying for qucik HPI gains. Still allows an investment. However, doesn't favour BTL over families, which currently happens.

What a high powered car? You pay more tax, and showroom tax. Want a BTL....

Cleaver

Graham_Devon wrote: »

However, doesn't favour BTL over families, which currently happens.

How is BTL 'favoured' over families? One of these is a business the other is social unit that lives together, so how can one be favoured over the other. Other than generate tax income how would taxing BTL landlords more help families? It wouldn't bring down house prices and it wouldn't stop people renting out houses, or 'accidental landlords' as you put it. Take me when I became an 'accidental' landlord. I was offered a job in a city a long way from where I lived which was a 12 month contract but too good to turn down. I couldn't sell my house as I thought that I might be back there in 12 months time, so I rented it out. I would have done this regardless of whether there was a BTL tax or not, because I didn't have a choice: I had to keep my house. If you're an accidental landlord then presumably it's because you can't or don't want to sell your house, so I don't see how a bit of tax would change that position?

We seem to have a thing in this country about using tax with something we don't like and I'm not sure it's the best way forward. I don't like the way Tesco is taking over the country (you may have heard this before) and I don't like a lot of its practices. But I wouldn't be in favour of taxing Tesco more as I don't see how this would help. Same with BTL. If you want house prices to fall and become more affordable for young people then you need a proper long-term national strategy to do so, not just a small tax on accidental landlords that won't do anything.

Graham_Devon

Cleaver wrote: »

How is BTL 'favoured' over families? One of these is a business the other is social unit that lives together, so how can one be favoured over the other.

Currently mortgages are hard to get. Some call them "rationed".

Banks have admitted they are preferencial towards BTL at the moment. CML have stated banks are preferencial towards BTL as they see the risks as lower.

Thats BTL favoured.

As for your "tax wouldn't do anythign" part....howcome landlords were fretting when the talk of capital gains returning to 40%? Howcome we got stories and threats of mass sales which would ruin the property market?

BTW, its not just me saying it, it's actually reccomended to the government...

It also called for the deposits lenders require for buy-to-let properties to be increased to ensure the rental income covered mortgage repayments.
The group said such a move should help to deter "small time speculators" from looking for big gains from the buy-to-let market, which it said had fed house price bubbles in the past.

ruggedtoast

Cleaver wrote: »

How is BTL 'favoured' over families? One of these is a business the other is social unit that lives together, so how can one be favoured over the other. Other than generate tax income how would taxing BTL landlords more help families? It wouldn't bring down house prices and it wouldn't stop people renting out houses, or 'accidental landlords' as you put it. Take me when I became an 'accidental' landlord. I was offered a job in a city a long way from where I lived which was a 12 month contract but too good to turn down. I couldn't sell my house as I thought that I might be back there in 12 months time, so I rented it out. I would have done this regardless of whether there was a BTL tax or not, because I didn't have a choice: I had to keep my house. If you're an accidental landlord then presumably it's because you can't or don't want to sell your house, so I don't see how a bit of tax would change that position?

We seem to have a thing in this country about using tax with something we don't like and I'm not sure it's the best way forward. I don't like the way Tesco is taking over the country (you may have heard this before) and I don't like a lot of its practices. But I wouldn't be in favour of taxing Tesco more as I don't see how this would help. Same with BTL. If you want house prices to fall and become more affordable for young people then you need a proper long-term national strategy to do so, not just a small tax on accidental landlords that won't do anything.

As I understand it BTLers dont pay any tax on their rental income up to the level of their interest payments.

In the boom this led to a proliferation of highly geared, high LTV Buy To Let mortgages which were a catalyst for spiralling house prices that shut many residential buyers out of the market.

While the investor paid no tax on their gross rental income, that rental income was responsible for rapidly increasing notional gains, that many felt were not being adequately represented with CGT when finally sold. Meanwhile residential buyers are trying to fund mortgage out of their net incomes and in a sense being penalised for wanting a home to live in not to rent out.

If there was enough housing around I dont think it would ever be brought up as an issue, but there isnt, and rightly or wrongly many people feel that buy to let investors are making housing scarcer not more available.

Really2

Graham_Devon wrote: »

Banks have admitted they are preferencial towards BTL at the moment. CML have stated banks are preferencial towards BTL as they see the risks as lower.

But if they have the large deposit and means to land a mortgage that is not preference is it?

They are not saying in the same situation they would lend to A BTL not a FTB, it is just that FTB's are struggling to get the deposits.

Banks prefer high deposits and low multiples at the moment, it just so happens that is suiting the BTL model, to me that is not preference.