Not a time to be a buy-to-let landlord

buglawton

mwpt wrote: »

Yes, but Germany also has actual civilised tenancy laws and civilised allocation of land. Land is released for building at efficient rates. Here in the UK with have the most expensive rents in Europe, maybe the worst (most constricted) planning laws and the worst tenancy laws.

Since we've moved to a more renter based housing system, it is just astounding to me how regressive our policies still are in this area. Before any taxes on BTL, here is what I would change immediately on becoming supreme leader.

I'd start from the point of view that housing is a human need and bringing up a family in a home with memories is actually a great thing. We'd start treating homes as homes instead of a money extraction investment.

- The property is first treated as a home for someone, and secondly as a long term investment. Landlords who get into the game will be fully aware that this is the case. It will not be an investment they can easily liquidate by evicting a family.
- Tenancy agreements become very much in favour of optional long term tenancies. Every tenancy agreement is by default indefinite (*).
- The landlord has no rights to evict a tenant on a whim, but can only do so if they are moving in themselves, or possibly close family. Edge cases can go to arbitrage.
- Rent rises will be constrained by x% in line with wages or possibly some other inflation measure.
- Tenants may choose to leave the property after the initial fixed period, with a notice of two months.
- It will be much easier to evict tenants for either non payment, anti-social behaviour, or property damage.
- The property may be sold but must be sold with sitting tenants. (not 100% sure about this)
- (*) Professional landlords complying with the above retain tax incentives. People leaving their own home and wanting to rent it out only short term may do so with a certain type of tenancy agreement but do not gain any tax incentives.
- Laws will be made such that lenders must comply to the above.

The German housing market seems to be better for both renters and buyers based on cheaper overall prices and rents, plus stable low interest rates proven over the very long term.

If the UK enacted more socially-oriented tenancy laws, the lenders would reign in very sharply on BTL borrowers which, in the UK shortage of supply situation, could cascade into a much bigger economic problem. No wonder the govt doesn't want to go there.

mwpt

buglawton wrote: »

The German housing market seems to be better for both renters and buyers based on cheaper overall prices and rents, plus stable low interest rates proven over the very long term.

If the UK enacted more socially-oriented tenancy laws, the lenders would reign in very sharply on BTL borrowers

Why?

which, in the UK shortage of supply situation, could cascade into a much bigger economic problem. No wonder the govt doesn't want to go there.

Another variant of "nobody move or the puppy gets it" argument.

cells

The-Joker wrote: »

The increase tax grab from property is bearish for property market in general no matter how you spin it.

yes sure more tax = bad, but is it going to cause a 50% house price crash or is the additional tax going to mean property that was going to go up in price 100% in 15 years will instead of up in price 100% in 20 years?

The additional taxes can largely be avoided by companies taking over as landlords. They only pay the stamp duty once every 100 years and interest as a cost is still the norm. So taxes for companies doing BTL have only changed very marginally

MEM62

pollypenny wrote: »

Anyone buying their own home doesn't get a bean!

We used to. When I bought my place back in 1987 you got tax relief on your mortgage payments.

purch

The-Joker wrote: »

The increase tax grab from property is bearish for property market in general no matter how you spin it.

I wouldn't argue with that at all Joke.

Some of us are ahead of the game, and some just follow.

The differeence is, it really matters to you, whilst I couldn't give a hoot.

buglawton

"If the UK enacted more socially-oriented tenancy laws, the lenders would reign in very sharply on BTL borrowers"

mwpt wrote: »

Why?

The risk of a BTL borrower defaulting on his/her loan, due to the law protecting tenants better, will increase. Just a plain statistical fact. So lenders will alter the lending rules accordingly to restore their margin of safety.

That also raises the interesting prospect of banks repossessing properties from BTL owners but being unable to evict the tenants.

mwpt

buglawton wrote: »

"If the UK enacted more socially-oriented tenancy laws, the lenders would reign in very sharply on BTL borrowers"



The risk of a BTL borrower defaulting on his/her loan, due to the law protecting tenants better, will increase. Just a plain statistical fact. So lenders will alter the lending rules accordingly to restore their margin of safety.

No, not sure I buy that. It sounds like protectionist propaganda from a BTL landlord. Besides, it works elsewhere, so we don't have to argue about theories, we have working examples in practice.

padington

Property prices flying again in the third consecutive month of gains with a prediction of strong gains for 2016.

Also rents are soaring up.

Taxing the landlord is just a tax on the renter and increased rents make better yields and better yields make property more attractive to buy and in a high demand enviroment because of immigration and new buyer subsidies this increases property prices.

Who did Osborne chose to head up the Bank of England and what did that chap do in Canada ?

Thrugelmir

padington wrote: »

what did that chap do in Canada ?

Enough to warrant a big salary and an important job.

buglawton

Carney presided over a 40% housing price rise over his 8 years as governor of bank of Canada. Modest really. Oddly, average rise there last year was about 9/%.