Buy-to-let investors will need 50pc deposit - or no mortgage

Generali

chucknorris wrote: »

The point I was making was that house prices didn't fall just because they had previously risen rapidly, they fell was because the economy took a turn for the worse.

Good point.

cells

padington wrote: »

Rent controls don't address supply and demand like building houses do but they will help address a growing chorus of people who will become outraged by the rental situation. The new generation is already called 'generation rent'. If we get 5% more people owning properties we will still have this socio economic group of people identified through their failure to buy. As people get older, this may get more humiliating for them. The anger will rise. Even owner occupiers themselves will wonder what their children will do to survive. Owner occupiers who have no intention of selling ther property will join a growing chorus demanding 'something must be done'. People will have seen a whole raft of heavy measures placed on the house buying sector which kept it rising too much and people will begin to think, why not do something for the rental sector ?

The quick fix to offer 'rent controls' will be too popular for labour to resist or possibly one day too popular for Osborne himself to resist ...

the only problem with that idea is that true rent controls would cause the market to crash

some parts of London, transactions are 70% BTL.
If they attack the BTL market too hard two things will happen, one is transactions will fall and the other is that tax receipts will fall potentially significantly

If a BTL landlord is currently making a million pounds profit they are handing over about £450,000 a year in tax. Introduce rent controls and that £450k a year in tax goes down to or near zero.

With house prices and transactions lower there will also be a hit on capital gains tax and stamp duty.

So if the rent controls reduce government tax take by say £10B a year...what taxes must osborne raise to offset it?


personally I think labour might be dumb enough to do it but Osborne will prefer to pluck the goose for maximum feathers and minimum hissing. So more taxes (as announce) maybe a little more yet to come but not to kill the market maybe just stop its growth or slow the growth to a more sustainable + 100,000 units a year from about +300,000 units a year

cells

padington wrote: »

I doubt generation rent will care. As long as their personal rent is capped that year and they know landlords will suffer, it's all they will worry themselves about.

Look at the recent tax on landlord saga. No uprising there.

most people don't think or talk economics and politics and again its mostly a London problem.

In much of the country rents are close to social rents. eg £500pm for a 2 bed while average social rent is ~£450pm

also remember the private rent is paying tax and capital gains while the social is not.

so how much more can rents be capped when in a lot of the country (maybe the majority) rents are close to the floor (social rents)

happylucky

cells wrote: »

some parts of London, transactions are 70% BTL.
If they attack the BTL market too hard two things will happen, one is transactions will fall and the other is that tax receipts will fall potentially significantly

I do think that they will attack again and that the last hit will be CGT on second properties Inc. all btl....we have different stamp duty, different business tax deductible treatments now, so precedent is set to apply changes to btl /second homes sector alone.

GOs trap would then be complete: income stream hobbled through new taxes, future investment hobbled through new taxes and when you want to leave because it doesn't make as much investment sense as it used to (semi-forced transaction based simply on the business case).... historical capital increases which kept people in it...gone. In a flash, like the reduction of 40% cgt not so many years ago.

And of course, the slack taken up by owner occupiers who are still being charged a rather decent whack of stamp duty in London / SE anyway, even with a modest price decline of, say, 10%.

I was reading something earlier in the week in an Australian paper about them finally talking about CGT on the primary residence (as per US?) so I'm sure that joy is yet to come to the UK.

Where there's property, there's tax.

It will be fascinating to see what happens next.

chucknorris

happylucky wrote: »

like the reduction of 40% cgt not so many years ago.

I would much rather pay 40% CGT with a reinstated indexation allowance, you seem to be implying CGT has been reduced, it hasn't, when you consider all the factors, it was simplified, not reduced. CGT at today's 28% rate is more substantial to me, than it was back when you paid 40% with an indexation allowance, something that you seem to be ignoring. The introduction of taper relief, which replaced indexation was bad, but then they abolished taper relief. It is crazy to ignore inflation when attempting to evaluate a capital gain, some could end up paying tax on a capital loss (in real terms) when the gain is below the level of inflation, since the asset was acquired.

happylucky

I was thinking about cgt at 40% with no indexation, no tapering (and not ignoring that, merely not predicting it, but I do see your point).

Of course it is crazy to evaluate capital gains without accounting for inflation (irrespective of whether that's applied at 40% or 18% 28%)....It's astoundingly unfair...yet it happens.

I think large tranches of th e UK tax system are entirely nuts and counter basic principles of a well-adjusted society, but unfortunately that hasn't changed anything either.

controversy

You lot have zero idea of what is going on at the moment!

First thing you need to learn is all markets are connected. What 1 Central Bank does effects us all. The only exception is when the reserve currency is manipulated it effects the whole world market like a huge ripple in a pond.

The reason why our Banks and our Politicians are cutting back on speculation is because the Americans Federal Reserve is going to raise interest rates in the next few months and if USA GDP/Stock Market declines it will mean that the USA is a broke state relying on printed money.

Most people in the know have known this for at least 6-7 years. Barclays aren't stupid. They have weathered this kind of storm numerous times.......................................... But guess who doesn't know? The public, the pundits who speculate and are living in a fake reality called THE BUBBLE!

Live by Quantitative Easing die by Quantitative Easing. Don't let anyone fool you when they say QE is not money printing.

If the Fed back down and go back to QE4 and QE infinity expect the worst.

You should also know that the ECB (European Central Bank) has started printed money again. More useless QE to prop up its failing states.

You might hate the Government and the Banks for stopping your Buy to Let extravaganza but trust me if you haven't paid all your debts off by 2020 your going to regret it big time.

Capital controls are going to follow I think. Interest rates rising after 2016? It depends when Janet Yellen makes the big mistake. The whole reason we have Mark Carney in the Bank of England is to try and mitigate the Federal Reserves Tsunami of screw ups.

Generali

controversy wrote: »

You lot have zero idea of what is going on at the moment!

First thing you need to learn is all markets are connected. What 1 Central Bank does effects us all. The only exception is when the reserve currency is manipulated it effects the whole world market like a huge ripple in a pond.

The reason why our Banks and our Politicians are cutting back on speculation is because the Americans Federal Reserve is going to raise interest rates in the next few months and if USA GDP/Stock Market declines it will mean that the USA is a broke state relying on printed money.

Most people in the know have known this for at least 6-7 years. Barclays aren't stupid. They have weathered this kind of storm numerous times.......................................... But guess who doesn't know? The public, the pundits who speculate and are living in a fake reality called THE BUBBLE!

Live by Quantitative Easing die by Quantitative Easing. Don't let anyone fool you when they say QE is not money printing.

If the Fed back down and go back to QE4 and QE infinity expect the worst.

You should also know that the ECB (European Central Bank) has started printed money again. More useless QE to prop up its failing states.

You might hate the Government and the Banks for stopping your Buy to Let extravaganza but trust me if you haven't paid all your debts off by 2020 your going to regret it big time.

Capital controls are going to follow I think. Interest rates rising after 2016? It depends when Janet Yellen makes the big mistake. The whole reason we have Mark Carney in the Bank of England is to try and mitigate the Federal Reserves Tsunami of screw ups.

Nurse. NUUUURSE!!!!! He's on the computer again.

I think what this poster is trying to say is that Dr Yellen (PhD from Yale, Professor Emeritus at Hass and UCal) isn't nearly as clever as some bloke with a keyboard.

westernpromise

controversy wrote: »

You lot have zero idea of what is going on at the moment!

First thing you need to learn is all markets are connected. What 1 Central Bank does effects us all. The only exception is when the reserve currency is manipulated it effects the whole world market like a huge ripple in a pond.

The reason why our Banks and our Politicians are cutting back on speculation is because the Americans Federal Reserve is going to raise interest rates in the next few months and if USA GDP/Stock Market declines it will mean that the USA is a broke state relying on printed money.

Most people in the know have known this for at least 6-7 years. Barclays aren't stupid. They have weathered this kind of storm numerous times.......................................... But guess who doesn't know? The public, the pundits who speculate and are living in a fake reality called THE BUBBLE!

Live by Quantitative Easing die by Quantitative Easing. Don't let anyone fool you when they say QE is not money printing.

If the Fed back down and go back to QE4 and QE infinity expect the worst.

You should also know that the ECB (European Central Bank) has started printed money again. More useless QE to prop up its failing states.

You might hate the Government and the Banks for stopping your Buy to Let extravaganza but trust me if you haven't paid all your debts off by 2020 your going to regret it big time.

Capital controls are going to follow I think. Interest rates rising after 2016? It depends when Janet Yellen makes the big mistake. The whole reason we have Mark Carney in the Bank of England is to try and mitigate the Federal Reserves Tsunami of screw ups.

Here's a thread from the newsgroup uk.finance 15 years ago in which many of the same apocalyptic forecasts were made.

https://groups.google.com/forum/#!topic/uk.finance/7Riyr4BN3Gw%5B1-25%5D

It's like those news stories about the imminent return of airships and how England really could win something at footer this time.

I find that newsgroup a salutary reminder whenever I read some crash troll's opinion about how it's all about to go epically Pete Tong. The beneficiary is always the troll talking his own book, the audience is the people the troll hopes will prove not to have been smarter than himself after all, and disagreement is met with abuse. At some point the expressions "wake up", "Ponzi scheme", VIs, EAs, TPTB and tulips usually get chucked in. These are an attempt to show that the wise troll sees through all the smoke and mirrors, but in fact, they more usually are a surefire indicator that he reads a lot of sensationalist websites and believes the entire lot.

This kind of thing goes back to 1996 in that newsgroup alone. In the link I posted there are people insisting that houses were overpriced in 2002.

wotsthat

westernpromise wrote: »

Here's a thread from the newsgroup uk.finance 15 years ago in which many of the same apocalyptic forecasts were made.

https://groups.google.com/forum/#!topic/uk.finance/7Riyr4BN3Gw%5B1-25%5D

Capital Economics predicting a crash, BTL owners about to go bust and immigration. It could have been here, yesterday.