BTL: Political Risk

CLAPTON

BananaRepublic wrote: »

In answer to the first two points, they are irrelevent, although one friend will be very wealthy thanks two his two BTL houses.

As to the last point, people living on their own is part of the problem, not just immigration. But you sidestep, it is grossly unfair for potential owner occupiers to be outbid by much wealthier BTL landlords. The fact that there is a shortage makes it all the more iniquitous. There is no reason why someone cannot save using an ISA or pension fund.

we will need to wait and see what happens when the new tax rules kick in.

assuming no other major changes (i.e. immigration continues at the same level etc) then I would expect, in London and the SE to
-see house prices continuing to rise
-some movement of properties from landlords to owner occupiers
-rents rising faster than prices

BananaRepublic

Clapton, I can't disagree with that. It's nice for owner occupiers like me who see their house value increase, but I feel sorry for young people. My degree was free and I got a grant too.

cells

kabayiri wrote: »

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

A big generalization,

about 30% of homes have lost their investors big money. A BTL bought in the NE for instance using a 25% deposit would have lost more than two thirds of its original investment as prices are lower now than 10 years ago

I would not call losing 65-70% of your investment a good run.

Likewise the NW and Y&H are down in nominal terms

WM and EM are about flat or even a loss in real terms

Its only really the SE and especially London that did well.


But you cant average all this, its like saying stock markets have done well by looking at only apple and google stocks and ignoring all the crap investments

BananaRepublic

cells wrote: »

A big generalization,

about 30% of homes have lost their investors big money. A BTL bought in the NE for instance using a 25% deposit would have lost more than two thirds of its original investment as prices are lower now than 10 years ago

I would not call losing 65-70% of your investment a good run.

Likewise the NW and Y&H are down in nominal terms

WM and EM are about flat or even a loss in real terms

Its only really the SE and especially London that did well.


But you cant average all this, its like saying stock markets have done well by looking at only apple and google stocks and ignoring all the crap investments

Your figures are wrong:

http://www.nationwide.co.uk/~/media/MainSite/documents/about/house-price-index/Q4_2014.pdf

The above ignores recent large increases. Also your maths is very very poor.

cells

BananaRepublic wrote: »

Your figures are wrong:

http://www.nationwide.co.uk/~/media/MainSite/documents/about/house-price-index/Q4_2014.pdf

The above ignores recent large increases. Also your maths is very very poor.

That is a year out of date. And like previously you are probably looking at London and thinking what's happened there is the same as everywhere

The north and y&h are up about £5000 in the last two years. Or circa flat in real terms. What this means is had someone bought ten years ago and sold two years ago their losses would have been even worse.

Had someone bought the average house in the NE for the 2005 price of £116.5k and sold it two years ago for the average price in 2013 of £94.5k. Their initial £30k investment would have been reduced to £5k or a nearly 85% loss on investment

So contrary to your views that BTL has been a massive money maker for all it really depends on where and when you bought. For about half the country its been a loss over the last 10 years. For some places its been nearly a wipeout

And my maths probably isn't as good as it once was but its still very likely within the top 1%.

cells

BananaRepublic wrote: »

Your figures are wrong:

http://www.nationwide.co.uk/~/media/MainSite/documents/about/house-price-index/Q4_2014.pdf

The above ignores recent large increases. Also your maths is very very poor.

I winder if you will be good enough to post the 10 year figures when the nationwide puts out the next set of results for q4 2015?

Sapphire

BananaRepublic wrote: »

Clapton, I can't disagree with that. It's nice for owner occupiers like me who see their house value increase, but I feel sorry for young people. My degree was free and I got a grant too.

With regard to the degree, far fewer people went to college or university when higher education was paid for by grants. It would be simply impossible for taxpayers to fund all the people who currently seem to want a college education (some would probably be far better off doing apprenticeships). So this factor is irrelevant, really, to the subject in question.

BobQ

CLAPTON wrote: »

we will need to wait and see what happens when the new tax rules kick in.

assuming no other major changes (i.e. immigration continues at the same level etc) then I would expect, in London and the SE to
-see house prices continuing to rise
-some movement of properties from landlords to owner occupiers
-rents rising faster than prices

Are we just trying to find a solution to a problem that is largely based in London and maybe a few other parts of the SE? If so why not impose higher stamp duty on a geographical basis or a rate that progressively reduces with distance from Eros?

kabayiri

kinger101 wrote: »

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.

Interesting you mention Tesco. They tried to arrange a property sale & leaseback deal on their stores via a Jersey PUT (a sizeable amount). The revenue had tried to close that loophole and a court battle ensued.

It would seem reasonable to me that the government provided transitional support for existing landlords to ease the CGT/SDLT burden; but then, I'm not the government.

If I were a landlord here (which I'm not) I would expect predictability and stability from government policy. I'm not sure that's what you have got. I can see you have an issue.

CLAPTON

BobQ wrote: »

Are we just trying to find a solution to a problem that is largely based in London and maybe a few other parts of the SE? If so why not impose higher stamp duty on a geographical basis or a rate that progressively reduces with distance from Eros?

depends upon what problem you one is trying to solve