BTL: Political Risk

kinger101

kabayiri wrote: »

BTL landlords have had a pretty good run. I'm not sure there is much room for complaint.

The government chucks nearly £30bn a year providing housing assistance and support.

What other asset class gets anything like that level of assistance?

Wouldn't running your property portolio from a limited company get around some of the complaints on the loss of relief?

Yes, but the transfer of property to limited company triggers both CGT and SDLT so you can't just switch the portfolio over. The £30 billion in housing assistance includes social properties too. In fact, I suspect social tenants will include a higher proportion of benefits claimants than private housing, and private landlords are more selective over their tenants.

And most of the things benefits recipients buy are sold for a profit, but we don't decide it's right to impose turnover taxes on Tescos for this reason.

mwpt

kinger101 wrote: »

And most of the things benefits recipients buy are sold for a profit, but we don't decide it's right to impose turnover taxes on Tescos for this reason.

We keep coming back to this supermarket argument. I must admit, there are a number of you framing the debate in these terms and it only seems to be me that finds it hilariously absurd. So I must conclude, everyone else can't be mad, it must be me.

But maybe it isn't just me. Maybe there is one other mad person who might think BTL are squeezing out OOs and in need of a bit of extra disincentive. I did a bit of searching and it seems some guy called George Osborne might think so too. Here he is:

http://citywire.co.uk/money/osborne-landlord-tax-to-pay-for-400000-new-homes/a862836

‘Frankly, people buying a home to let should not be squeezing out families who can’t afford to buy a home,’ said Osborne.
‘So I am introducing new rates of stamp duty that will be 3% higher on the purchase of additional properties like buy-to-lets and second homes.

CLAPTON

mwpt wrote: »

We keep coming back to this supermarket argument. I must admit, there are a number of you framing the debate in these terms and it only seems to be me that finds it hilariously absurd. So I must conclude, everyone else can't be mad, it must be me.

But maybe it isn't just me. Maybe there is one other mad person who might think BTL are squeezing out OOs and in need of a bit of extra disincentive. I did a bit of searching and it seems some guy called George Osborne might think so too. Here he is:

Why do you consider it so important to transfer some properties from people who rent, to people who are buying on a mortgage?
Will that increase the total housing supply?
Will that improve the standard of housing ?
Will that mean more young people in London/SE can afford to live in family size homes?

we need to increase the building rate to provide a higher number of homes.

Thrugelmir

westernpromise wrote: »

Osborne is basically a Labour chancellor.

Wrong.

When Brown read his thesaurus wrongly prior to his many speeches he got his words twisted and instead meant to say reckless.

Osborne got his eyes tested prior to becoming Chancellor and adopted real prudence as his motto.

michaels

kabayiri wrote: »

BTL landlords have had a pretty good run. I'm not sure there is much room for complaint.

The government chucks nearly £30bn a year providing housing assistance and support.

What other asset class gets anything like that level of assistance?

Wouldn't running your property portolio from a limited company get around some of the complaints on the loss of relief?

The govt hands out a lot more hard cash each year to the unemployed, low income families and pensioners which obviously goes to support the grocery, tobacco, alcohol, energy suppliers and of course Sky and Apple. I haven't yet heard it suggested that they should be taxed on their capital employed?

kinger101

mwpt wrote: »

We keep coming back to this supermarket argument. I must admit, there are a number of you framing the debate in these terms and it only seems to be me that finds it hilariously absurd. So I must conclude, everyone else can't be mad, it must be me.

But maybe it isn't just me. Maybe there is one other mad person who might think BTL are squeezing out OOs and in need of a bit of extra disincentive. I did a bit of searching and it seems some guy called George Osborne might think so too. Here he is:

Personally, I have no objections to the SDLT changes. I would have preferred SDLT to have been eliminated altogether for first time buyers though. You might have noticed that none of Osborne's changes are tax neutral, which is perhaps to be expected given the current deficit. But if these changes were really about reducing competition between landlords and owner occupiers (which is in large part a false argument given landlords don't control the demand for rental properties), he might instead have focused only on changes which impact corporate, cash and BTL in a similar manner.

I suspect one consequence of this is that rents for some will increase. Many landlords do actually charge below market rates as they are happy with their existing tenant and are not minded to jeopardize losing them for the sake of a few percent. Many will now be reviewing this. Of course, Osborne doesn't care, as this was really only about tax receipts, and increase rents benefit him too.

In the long run, we might see more properties being let by companies, and directors have a duty to shareholders to maximize profits. I don't see that helping people who rent much either.

cells

kabayiri wrote: »

The government chucks nearly £30bn a year providing housing assistance and support.

thats mostly an accounting trick,

government takes ~£25B out of its right pocket and hands it to the councils/HA homes left pocket

cells

mwpt wrote: »

We keep coming back to this supermarket argument. I must admit, there are a number of you framing the debate in these terms and it only seems to be me that finds it hilariously absurd. So I must conclude, everyone else can't be mad, it must be me.

But maybe it isn't just me. Maybe there is one other mad person who might think BTL are squeezing out OOs and in need of a bit of extra disincentive. I did a bit of searching and it seems some guy called George Osborne might think so too. Here he is:

clearly the growth in the rental stock goes hand in hand with the fall in the owner stock. However the reason and outcome is probably a net good in the shortgage situation we find ourselves in.

I have only ever bought one property from an owner (the rest have been from other landlords) and that was a 4 bed flat where it was just an older lady living by herself. When she sold she left London for another part of England. Now its 4 mid twenties workers in that inner London flat. Not all owner --> renter transfers will be as big a difference as going from 1 person to 4 but in my experience its always been that renters live more dense than owners.

So imagine that house building does not go up and the rental stock shrinks by 2 million and the owner stock increases by 2 million. Just to keep it simple if renters rent at 3 persons per home and owners live at 2 persons per home you have 6 million renters becoming 4 million owners. What happens to the other 2 million displaced? where will they go?

Generali

cells wrote: »

clearly the growth in the rental stock goes hand in hand with the fall in the owner stock. However the reason and outcome is probably a net good in the shortgage situation we find ourselves in.

I have only ever bought one property from an owner (the rest have been from other landlords) and that was a 4 bed flat where it was just an older lady living by herself. When she sold she left London for another part of England. Now its 4 mid twenties workers in that inner London flat. Not all owner --> renter transfers will be as big a difference as going from 1 person to 4 but in my experience its always been that renters live more dense than owners.

So imagine that house building does not go up and the rental stock shrinks by 2 million and the owner stock increases by 2 million. Just to keep it simple if renters rent at 3 persons per home and owners live at 2 persons per home you have 6 million renters becoming 4 million owners. What happens to the other 2 million displaced? where will they go?

If someone goes from being a renter to being an OO why would that change the density of housing they require?

I currently rent my home. If I was to buy then I'd move in to the house with my wife and kids. My consumption of housing wouldn't change.

kinger101

Generali wrote: »

If someone goes from being a renter to being an OO why would that change the density of housing they require?

I currently rent my home. If I was to buy then I'd move in to the house with my wife and kids. My consumption of housing wouldn't change.

I think it may. I have previously seen statistics which indicate a higher occupation of let properties compared to OO (though this may have been skewed by London data).

For me, when I was renting, I was happy to live in a smaller home to minimize my rent while I saved for a deposit. I wanted something bigger when I bought though.

More widely for young families, due to the costs of buying and selling property, it isn't wise to get something just the right size for now if you think you may want another bedroom in two years.