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Crack down on accidental landlords
macaque_2
Posts: 2,439 Forumite
Although contractually correct, lenders are not being entirely honest about their reasons for doing it. If they were genuinely pricing on the basis of risk, they would take account of the owner's total equity. They would also not be dishing out cheap high percentage loans at high earnings multiples.
"This is because lenders view buy-to-let properties as more risky because of the possibility of void periods – where the property is empty – or tenants falling into arrears."
http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/10418580/Lenders-crack-down-on-accidental-landlords.html
"This is because lenders view buy-to-let properties as more risky because of the possibility of void periods – where the property is empty – or tenants falling into arrears."
http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/10418580/Lenders-crack-down-on-accidental-landlords.html
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Comments
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Borrowers are in breach of contract. So should suffer the consequences.
Bet the same borrowers would be mightly upset if their employers ignore employment contracts and paid them less..........0 -
BTL should be priced higher it is a commercial venture. Why shouldn't banks expect to rewarded as such.
Accidental landlords, having to let out a property to "make ends meet" or because of a bridging move suggests that the risk profile of the borrower has increased.
By encumbering the property, even on a short term basis, it is impacting the ability of a lender to take prompt action. An encumbered property is also likely to have a lower value than the open market value.
As the article points out residential home property insurance may well be invalidated too.
Key in any risk pricing decision should be affordability. Lenders are not pawnbrokers and LTV is a secondary consideration."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
Maybe the increased risk comes from a different quarter?
Fewer than 500,000 taxpayers are registered with HMRC as owning properties other than their home. And yet other sources put the number of Britain’s growing army of landlords at between 1.2million and 1.4million.
http://www.telegraph.co.uk/finance/personalfinance/houseprices/10410791/Landlord-tax-crackdown-gets-serious.html0 -
Maybe the increased risk comes from a different quarter?
Fewer than 500,000 taxpayers are registered with HMRC as owning properties other than their home. And yet other sources put the number of Britain’s growing army of landlords at between 1.2million and 1.4million.
http://www.telegraph.co.uk/finance/personalfinance/houseprices/10410791/Landlord-tax-crackdown-gets-serious.html
where do you get the figure of the number of landlords?
i hope that isn't based on 1 landlord per rented property0 -
where do you get the figure of the number of landlords?
i hope that isn't based on 1 landlord per rented property
I think your answer can be found in the article that Antrobus posted.
It is a lot easier to make money if you don't pay tax (as many VAT dodgers have done in the past).
Standby for crack down number 2.0 -
It is a lot easier to make money if you don't pay tax (as many VAT dodgers have done in the past).
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I agree, although it would be really helpful if they concentrated on those aggressive tax avoidance schemes that enable the likes of Google, Vodaphone and Starbucks to legally avoid tax, with the same vigour as overstretched homebuyers doing the best that they can to avoid re-possession.Few people are capable of expressing with equanimity opinions which differ from the prejudices of their social environment. Most people are incapable of forming such opinions.0 -
I think your answer can be found in the article that Antrobus posted. ..
Well yes, indeed. I have no figures whatsoever on the number of landlords operating in the UK. Other people do however. I believe HMRC are/will be comparing Land Registry data on ownership with (a) the electoral roll, (b) council tax records, (c) deposit protection records and so forth.I agree, although it would be really helpful if they concentrated on those aggressive tax avoidance schemes that enable the likes of Google, Vodaphone and Starbucks to legally avoid tax, with the same vigour as overstretched homebuyers doing the best that they can to avoid re-possession.
You're suggesting that HMRC should ignore cases of outright tax evasion i.e. potentially criminal acts of fraud, and rather concentrate on countering apparently perfectly legal business arrangements ?!?0 -
You're suggesting that HMRC should ignore cases of outright tax evasion i.e. potentially criminal acts of fraud, and rather concentrate on countering apparently perfectly legal business arrangements ?!?
Well it would be nice if they could actually do both.
Chase minnows or concentrate on the bigger fish?
In his Budget speech, Chancellor George Osborne spoke of his disdain for tax evasion and aggressive tax avoidance, describing both as "morally repugnant". It was against this backdrop that the chancellor announced the Treasury's plans to introduce a General Anti-Avoidance Rule (GAAR).
http://www.bbc.co.uk/news/business-17525977
http://www.theguardian.com/politics/2013/oct/28/britains-tax-gap-tip-of-iceberg-says-margaret-hodge
http://www.theguardian.com/commentisfree/2013/oct/13/prison-tax-evaders-lagarde-list-lenient"If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
grizzly1911 wrote: »Well it would be nice if they could actually do both....
Quite possibly, but BobQ wanted HMRC to "concentrate" on one not the other.
Personally I think that targeting out-and-out tax evasion should be HMRC's first priority, irrespective of whether the evasion is being conducted by Joe Smith or Smith Global Industries plc.0 -
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