New higher stamp duty for BTL/second homes

dharm999

I read that the 3% does not apply in Scotland because stamp duty doesn't exist anymore in Scotland, having been replaced with the new transaction tax. It will be interesting to see if the Scottish government follow what GO has done, otherwise interest in btl property in Scotland will surely increase, as people look further afield for better value

mystic_trev

A new tax on landlords is threatening banks’ growth, and they do not want the Bank of England could follow up the Chancellor’s changes with restrictions on lending

http://www.telegraph.co.uk/finance/bank-of-england/12021828/Lenders-lobby-Bank-of-England-to-leave-buy-to-let-alone.html

On top of this there's also a nasty rumour a 30% flat rate CGT could be introduced on the sale of all second homes in the next Budget.:eek:

Thrugelmir

mystic_trev wrote: »

On top of this there's also a nasty rumour a 30% flat rate CGT could be introduced on the sale of all second homes in the next Budget.:eek:

GO is on a mission. That's a certainty. Hopefully will burst the obsession with property above all else in the UK.

michaels

There are excess returns from property due to the limit on supply. It is unfair that these rents caused by the state limiting building should accrue only to the property owner rather than to society as a whole. For a first home there are no excess returns, you start of with one home and whatever happens to house prices you end up with something worth one home. If you have more than one home you benefit from this artificial scarcity driven rent, applying cgt goes some way to socialising the rents that result from the limitations on building.

Blacklight

michaels wrote: »

There are excess returns from property due to the limit on supply. It is unfair that these rents caused by the state limiting building should accrue only to the property owner rather than to society as a whole. For a first home there are no excess returns, you start of with one home and whatever happens to house prices you end up with something worth one home. If you have more than one home you benefit from this artificial scarcity driven rent, applying cgt goes some way to socialising the rents that result from the limitations on building.

House builders build enough to maintain positive pressure on value. Easy way to sustain growth.

The government is as responsible for this as it is for the average price of a Ferrari, for the same reasons.

CLAPTON

Blacklight wrote: »

House builders build enough to maintain positive pressure on value. Easy way to sustain growth.

The government is as responsible for this as it is for the average price of a Ferrari, for the same reasons.

they sustain growth by limited supply just as they largely went bankrupt after 2008.

there are 1,000s of small builders who lack the know how to manage supply.

government largely limit the supply of planning permission, unlike the volume of ferraris

Crashy_Time

dharm999 wrote: »

I read that the 3% does not apply in Scotland because stamp duty doesn't exist anymore in Scotland, having been replaced with the new transaction tax. It will be interesting to see if the Scottish government follow what GO has done, otherwise interest in btl property in Scotland will surely increase, as people look further afield for better value

As Aberdeen continues to collapse Scotland will be less and less like a place you want to have BTL. BTL is dead, rents will drop big time.

Crashy_Time

Thrugelmir wrote: »

GO is on a mission. That's a certainty. Hopefully will burst the obsession with property above all else in the UK.

It is very entertaining just now watching the reactions on here, and on some of the nuttier BTL forums as GO tightens the screw on HPI mentalists. Some MSM even acknowledging that it is the price of property that is the problem (first time I have seen this) and accepting that homeowners and mortgage debtors will have to take the hit to get things back on track.

cells

Blacklight wrote: »

House builders build enough to maintain positive pressure on value. Easy way to sustain growth.

The government is as responsible for this as it is for the average price of a Ferrari, for the same reasons.

There ate 350+ councils in England

Why do the house builders build more in the councils that give a larger quota?

chucknorris

Crashy_Time wrote: »

As Aberdeen continues to collapse Scotland will be less and less like a place you want to have BTL. BTL is dead, rents will drop big time.

I don't know enough about Aberdeen to comment, the rental market there might be typical of the rest of the UK, or due to contractors connected with the oil business requiring rental accommodation, there might be something unique about the housing/rental market there. So limiting my comments to a market that I do know, which is London, I can see why capital values might dip, but I can't why rents would drop! If anything there is going to be even more upward pressure on London rents. But I do think that due to this upward rent pressure, there is a real possibility that a future labour Gov would intervene with rent controls, but that is some time away.

When you say BTL is dead, I think what you mean is that new investors will be reduced, I've been saying that myself ever since the last changes. The 3% extra stamp duty is going to accelerate this, but what does that mean for the rental market? I think it depends on whether an area has unique reasons why there is a strong rental market. London I believe is such a place:

1. Higher capital values are more of a barrier to buying.
2. A lot of professionals work in London for a just a few years (or when they arrive they think it might be for just a few years) so they will not be inclined to buy there, due to all the fees (mainly stamp duty) and short term risk of prices fluctuating downwards, it is preferable for them to rent.
3. Even workers arriving in London who know that they want to buy, will be inclined to initially rent, until they get to know London better. I did this myself, I initially rented for 6 months before buying.