Rents soar to (another) record high

Crashy_Time

http://www.thisismoney.co.uk/money/mortgageshome/article-3606555/Trouble-paradise-Estate-agent-boss-warns-slump-buy-let-rush.html

chucknorris

buglawton wrote: »

Yep I actually dared to express an opinion there. Sorry 'bout that Chuck.

You have to take the rough with the smooth. Even if you were not aware of it, one of the risks that you took on when you became a landlord was possible revisions to the tax rules. Which is similar to the reason that I decided not to invest in freehold ground rents, I didn't like the possibility of potential legislation changes, you must fully consider the downside before you invest. I'm obviously not happy about the tax rule changes, but you can't win all of the time.

mwpt

buglawton wrote: »

Yes I'm a LL but not at all badly leveraged. But annoyed how small investors who try control their own destiny are now at a disadvantage compared to bigger - and often foreign- investor groups.

What does "control their own destiny" even mean? This is your problem, you believe you are a special snowflake, savvy business entrepreneur, contributing to the productive economy by engaging in leveraged BTL. You're not. You use debt to outbid OOs, secure the property for yourself and rent it back to people. That's it. You don't create a new product. You don't drive down prices of the product through innovation or competition. You simply raise a barrier across a river (so to speak) and charge rent on it. I'm not having a go at individuals here, the market exists for such an activity and I don't blame people for taking advantage of it, but don't try to frame it as something else.

On top of that, leveraged BTL has enjoyed spectacular upsides and benefits to their business model for a long time now, including this tax relief on your debt on houses that OOs do not get. So the market environment changes, so you may go bust? Where is your sympathy or cries for government action when any other small business goes bust? Businesses fail all the time by not planning or preparing for change or by taking risks that don't pay off. It's your choice to use leverage.

Thrugelmir

buglawton wrote: »

But annoyed how small investors who try control their own destiny are now at a disadvantage compared to bigger - and often foreign- investor groups.

What foreign groups are you referring to?

cells

mwpt wrote: »

What does "control their own destiny" even mean? This is your problem, you believe you are a special snowflake, savvy business entrepreneur, contributing to the productive economy by engaging in leveraged BTL. You're not. You use debt to outbid OOs, secure the property for yourself and rent it back to people. That's it. You don't create a new product. You don't drive down prices of the product through innovation or competition.

Providing capital and taking risk is a productive endeavour. There is also another function of buying goods in the expectation of prices rising in the future and it is being productive, what it does is increase prices today so supply is produced sooner and at great quantity.

You simply raise a barrier across a river (so to speak) and charge rent on it.

landlords do not limit supply councils do that

but don't try to frame it as something else.

there is nothing wrong with trying to make a profit more often than not it results in a positive for everyone else too. your argument of landlords pushing up prices would be a positive as it brings supply forward. Just like speculators buying oil futures would bring forward new oil supplies.

On top of that, leveraged BTL has enjoyed spectacular upsides and benefits to their business model for a long time now,

looking through the London lenses. there has been spectacular downside in the north east. Not only are prices lower but if leverage was used the loss was magnified.

not much of a benefit in the north midlands and Wales either with prices about where they were a decade ago

take off the london glasses.

including this tax relief on your debt on houses that OOs do not get.

its not tax relief its an expense, why the hell do you think companies are able to stay as is

So the market environment changes, so you may go bust? Where is your sympathy or cries for government action when any other small business goes bust? Businesses fail all the time by not planning or preparing for change or by taking risks that don't pay off. It's your choice to use leverage.

any sane person would complain if this sort of thing happened to companies. guess what companies that are landlords were not only spared but their corp tax is going to just 18%. So instead of evil human landlords paying 40-45% on their profits and big stamp taxes every 2-20 years we will have corp landlords pay 18% and hold onto property indefinitly not paying anymoore transaction taxes. lets hope they put up your personal taxes to make up the difference

gadgetmind

Thrugelmir wrote: »

What foreign groups are you referring to?

People not from around here.

buglawton

Thrugelmir wrote: »

What foreign groups are you referring to?

http://www.thisismoney.co.uk/money/buytolet/article-3352735/Britain-s-biggest-buy-let-tycoons-strike-deal-sell-900-strong-property-empire-Kent-Arab-investors-250m.html
Apparently the 900 homes went to Arab/India/Chinese consortia.

http://www.theguardian.com/society/2016/may/25/john-prescott-foreign-ownership-london-tower-skyscraper
(Today's Guardian and as reported this mornings radio news headlines)
More than 60% owned by foreign buyers and a quarter of these flats owned by anonymous offshore firms.
However I have to admit it may not be just a BTL question - a large proportion are empty most or all of the time.

westernpromise

buglawton wrote: »

http://www.thisismoney.co.uk/money/buytolet/article-3352735/Britain-s-biggest-buy-let-tycoons-strike-deal-sell-900-strong-property-empire-Kent-Arab-investors-250m.html
Apparently the 900 homes went to Arab/India/Chinese consortia.

http://www.theguardian.com/society/2016/may/25/john-prescott-foreign-ownership-london-tower-skyscraper
(Today's Guardian and as reported this mornings radio news headlines)
More than 60% owned by foreign buyers and a quarter of these flats owned by anonymous offshore firms.
However I have to admit it may not be just a BTL question - a large proportion are empty most or all of the time.

I don't understand why the Guardian feels entitled to know who owns what property. What the hell business of theirs is it, exactly? Being headquartered in a tax haven themselves they're absolutely the last people who should be pontificating here.

One does wonder though what the envy brigade will make of it all when the disappearance of BTL makes no difference to house prices. Presumably them forriners are being lined up to be hated next?

CLAPTON

westernpromise wrote: »

I don't understand why the Guardian feels entitled to know who owns what property. What the hell business of theirs is it, exactly? Being headquartered in a tax haven themselves they're absolutely the last people who should be pontificating here.

One does wonder though what the envy brigade will make of it all when the disappearance of BTL makes no difference to house prices. Presumably them forriners are being lined up to be hated next?

the ownership of the vast majority of UK property is in the public domain (including yours and mine)
there is no reason all property should not be so listed.

mwpt

cells wrote: »

any sane person would complain if this sort of thing happened to companies.

No, they wouldn't.

If your business model relies entirely on leverage, you are going to get fscked somewhere along the timeline from now till the the future. If you manage to exit in a timely manner before that point, good for you.