Why do people resent buy-to-letters so much?

chucknorris

kinger101 wrote: »

I never said it was unreasonable. I was just explaining how the landlord is actively doing something as opposed holding shares.

Companies (and individuals) also borrow money to finance they're activities with the expectation that the profits can be used to repay both the interest and capital.

Once upon a time, banks did lend retail customers money to buy shares. They don't anymore, as buying shares on margin proved too risky for them.

You are wasting your time. He'll never understand, even if you took a 100 years to explain it to him. He either doesn't want to see it as it is, or simply isn't capable of understanding, either way it is a lost cause.

BananaRepublic

kinger101 wrote: »

I never said it was unreasonable. I was just explaining how the landlord is actively doing something as opposed holding shares.

Companies (and individuals) also borrow money to finance their activities with the expectation that the profits can be used to repay both the interest and capital.

Once upon a time, banks did lend retail customers money to buy shares. They don't anymore, as buying shares on margin proved too risky for them.

I rented a flat for many years. In one case I never saw the landlady during four years. She seemed very nice, based on emails and letters. When I left she paid someone to clean to a high standard. I'd done a decent job, but she wanted perfection. And she will have given the walls a coat of paint too. It was similar with another flat. I do not resent landlords, I know many, or BTL. But I do believe unlike you that it has some negatives given the current severe housing shortage.

And yes some people do prefer to rent, as I did when moving around for work. BTL has its place. Reducing the tax break was good IMO.

I do not describe BTL landlords in negatve terms, even though one or two here sound very greedy, but why do you think many do? If they provide a service for those who do not want to own, why the hatred? Surely you'd expect gratitude.

westernpromise

BananaRepublic wrote: »

The main gain for a BTL landlord is the value of the asset which in the long term will appreciate significantly

I own a second property that I intend never to sell. Do we agree then that I stand to gain very little from being a landlord?

cells

BananaRepublic wrote: »

I think you live in a different world. I have done IT contracts, and have worked alongside IT contractors, none get £500 per day. And quite why you think you are so important that you should earn such an astronomical sum is beyond me. Greed is the only answer I can see.

I did not say I should earn £500 per day, I just mentioned that figure as I know a lot of people who do earn that or more. I was just asking you (and the forum) if a landlords time has value and what the value placed on it might be. I even said is it £0 or £500 or something in between. It certainly should not be £0

BananaRepublic wrote: »

The main gain for a BTL landlord is the value of the asset which in the long term will appreciate significantly, as per my stock market investments.

This is not a given, in the north east prices are lower than they were ten years ago. In the north west, the east midlands, the west midlands and yorkshire&humber prices are flat over the decade. That is little over half the country where "will appreciate significantly" definitely did not happen. In real terms they are actually down some 25%!

BananaRepublic wrote: »

The amount of gain you stand to make is very high when compared to the amount of work you put in.

if prices go up substantially like in London this past decade then yes, if they dont like in the NE/NW/WM/EM/Y&H then no

Also what is wrong with making a lot of money in a short amount of time and paying substantial taxes on that?

BananaRepublic wrote: »

I know BTL landlords who do very little once the house is purchased, and furnished.

or so you assume. a medium sized landlord especially one with mortgages will spend a significant amount of time on the business. But because its on a laptop sitting at home that doesn't count? (even though most jobs these days are on a laptop siting down in an office)

BananaRepublic wrote: »

Quite why you deserve tax breaks is beyond me. I bet BTL would thrive without the tax breaks. The difference would be less BTL landlords, as they would need more capital at the outset. That would not be so bad. And it would make it easier to protect the landlords, as public sympathy would be higher, by for example introducing stronger legal protection to protect against a house being trashed.

I've not asked for tax breaks, the turnover tax is just plain stupid hence why they did not try to put it onto companies that do exactly the same thing.

with regards to BTL being much better with less landlords. Maybe, maybe not. Overall I think standards would improve but prices would increase. So its a question of balance do most renters want to pay 20-30% more so the landlord name on the contract ends with a LTD? Maybe some do but I suspect most do not

BananaRepublic wrote: »

As I've said, the current tax situation means that BTL landlords are unfairly advantaged allowing them to outbid potential owner occupiers, and forcing the market price up.

you are wrong, the tax system is much better for owners than landlords. Owners pay no CGT nor any income taxes on the (imputed) rent. Thats not a problem as all business do and so should BTL

there are problems with regulations (not tax) which makes it harder for owners. For example owners should be able to get IO mortgages. The regulations for mortgages are probably too tough the capital requirements should be less so a 90% mortgage rate is the same (or nearly the same) price as a 60% LTV mortgage.

cells

BananaRepublic wrote: »

I rented a flat for many years. In one case I never saw the landlady during four years. She seemed very nice, based on emails and letters. When I left she paid someone to clean to a high standard. I'd done a decent job, but she wanted perfection. And she will have given the walls a coat of paint too. It was similar with another flat. I do not resent landlords, I know many, or BTL. But I do believe unlike you that it has some negatives given the current severe housing shortage.

And yes some people do prefer to rent, as I did when moving around for work. BTL has its place. Reducing the tax break was good IMO.

I do not describe BTL landlords in negatve terms, even though one or two here sound very greedy, but why do you think many do? If they provide a service for those who do not want to own, why the hatred? Surely you'd expect gratitude.

the public do not understand what capital is and only assume a landlord changes a window handle and pains a wall once in a while all for a huge £1,000 per month.

They do not realise that the work the landlord does for most of the £1,000 per month was all the work they did to save £200,000 to buy/build the property.

If they thought of it like that they may be more understanding. Works 10,000 hours to build a house. Then spends 100 hours a year maintaining the building and admin.
For that the landlord charges the tenant 50 hours a month

michaels

Graham_Devon wrote: »

Pointless comparison.

Two very different sectors running two different activities.

For a start, if your chum wishes to reduce his tax bill to £0, he can simply funnel all profits back into the business, like Housing Associations have to do.

And yet if housing associations had to pay the govt 20/25% of the cost of their capital then to follow that break even rule even they would have to put their rents up by a similar proportion.....

BananaRepublic

cells wrote: »

the public do not understand what capital is and only assume a landlord changes a window handle and pains a wall once in a while all for a huge £1,000 per month.

They do not realise that the work the landlord does for most of the £1,000 per month was all the work they did to save £200,000 to buy/build the property.

If they thought of it like that they may be more understanding. Works 10,000 hours to build a house. Then spends 100 hours a year maintaining the building and admin.
For that the landlord charges the tenant 50 hours a month

Very very few build their own BTL property, so that is a red herring. As for the rest, it is pathetic.

BananaRepublic

cells wrote: »

I did not say I should earn £500 per day, I just mentioned that figure as I know a lot of people who do earn that or more. I was just asking you (and the forum) if a landlords time has value and what the value placed on it might be. I even said is it £0 or £500 or something in between. It certainly should not be £0

This is not a given, in the north east prices are lower than they were ten years ago. In the north west, the east midlands, the west midlands and yorkshire&humber prices are flat over the decade. That is little over half the country where "will appreciate significantly" definitely did not happen. In real terms they are actually down some 25%!

Not according to this source:

http://www.edmundconway.com/2014/03/why-the-bank-of-england-cannot-ignore-britains-gaping-regional-divide/

Prices in the NE have not got back up to the peak in ~2008, but in the long term including 10 years they are gaining. Now is a good time to buy. And you forget that your investment is geared. So your tenant is largely if not entirely paying off your mortgage, ensuring that you own more and more of the house. I suspect yields are higher in the NE because purchase prices are lower.


if prices go up substantially like in London this past decade then yes, if they dont like in the NE/NW/WM/EM/Y&H then no

Also what is wrong with making a lot of money in a short amount of time and paying substantial taxes on that?

The problem in part comes when you start moaning that you have it so tough, and you deserve sympathy. But the main problem is that BTL competes with OO buyers pushing up the price of houses when there is a huge shortage. You are only exploiting the current system, but there is an argument that it is an immoral system.

or so you assume. a medium sized landlord especially one with mortgages will spend a significant amount of time on the business. But because its on a laptop sitting at home that doesn't count? (even though most jobs these days are on a laptop siting down in an office)

I don't believe a BTL landlord spends massive amounts of time on paperwork. Anyway, it was your choice.

I've not asked for tax breaks, the turnover tax is just plain stupid hence why they did not try to put it onto companies that do exactly the same thing.

with regards to BTL being much better with less landlords. Maybe, maybe not. Overall I think standards would improve but prices would increase. So its a question of balance do most renters want to pay 20-30% more so the landlord name on the contract ends with a LTD? Maybe some do but I suspect most do not

you are wrong, the tax system is much better for owners than landlords. Owners pay no CGT nor any income taxes on the (imputed) rent. Thats not a problem as all business do and so should BTL

there are problems with regulations (not tax) which makes it harder for owners. For example owners should be able to get IO mortgages. The regulations for mortgages are probably too tough the capital requirements should be less so a 90% mortgage rate is the same (or nearly the same) price as a 60% LTV mortgage.

The tax system is not much better for owners. I got no mortgage interest tax relief. None. Where you pay more is CGT which is only fair and just.

I suspect the BoE are looking with interest at what will happen as a result of the changes to BTL taxation. I would not be surprised to see MITR on BTL disappear entirely if future events are not the catastrophe that you and other BTL landlords predict.

BananaRepublic

chucknorris wrote: »

You are wasting your time. He'll never understand, even if you took a 100 years to explain it to him. He either doesn't want to see it as it is, or simply isn't capable of understanding, either way it is a lost cause.

I could quite easily say the same about you.

chucknorris

BananaRepublic wrote: »

I could quite easily say the same about you.

But you would be wrong, you are far too emotional about property, and it is interfering with your logic. You can't see the difference between a business comprising of say 10 houses rented to students or a block of student flats. Both provide student accommodation, yet one of those businesses you don't even accept that it is a business, never mind that mortgage interest should be an allowable expense. Or would you argue that both are not businesses?