Treatment of BTL in the budget?

CLAPTON

chucknorris wrote: »

I don't think that there is anything wrong with current regulations, they just need to be fully implemented, and not allow landlords to get away with non compliance, come down hard on them if they do.

It has been made less profitable already:
-Loss of the wear and tear allowance
-Higher stamp duty
-Partial loss of tax relief

When the base rate eventually goes above 2.5%, I am better off selling my properties and re-investing the equity in shares (which is what I intend to do), and that is with having to pay significant CGT. So even though the equity is reduced by CGT, it would still produce about the same net income, but with much less effort and lifestyle compromise (so far my tracker funds have never expected me to show them around a property or organise a property repair). If I was looking at new investments I certainly wouldn't consider property, I would (and have been for the last 8 years, although initially that was more for portfolio diversification) invest in shares.

I concede that everyone is not as bearish as me regarding property, there are some on here who still think that it will be lucrative. But bear in mind I am perceived on here as a property bull (although I certainly don't see myself as that).

off topic really
but if you think that BLT will become increasing less profitable wouldn't it be better to start getting rid of property now.
Once falls start they can be very swift.
(note I have no real view about the profitability of being a landlord
but do believe London prices are supported by the 100,000 population annual increase)

Carl31

The last 4 properties I have viewed have been properties that were formally used as rental properties

Could be coincidence, could be a sign of the coming tax changes, but a couple of EA have mentioned they expect a few more to come on, could be the usual EA BS though to keep us interested

littlegreenfrog_2

westernpromise wrote: »

The state is not entitled to an opinion on how I use my property, any more than it is entitled to hold an opinion on what I do in my bedroom or on what time I choose to eat breakfast.

Places like St. John's Wood, Belsize Park and Hampstead are also full of homes that locals can't afford to buy. What's so special about Cornwall?

You seem quite keen on the state intervening in people's affairs, so here's a suggestion for you in similar vein. To alleviate the housing shortage, how about if the state decreed that all rental properties must be occupied by no fewer than 1.5 people per room excluding those less than 6 feet wide.

So a rented 3 bedroom house with a sitting room must by law be occupied by at least 6 people. A five-bedroom house with two receptions would be required to house 11 people.

For every month where the property is underoccupied, a fine of 3x the rent plus VAT would be levied on the other tenants. This ensures that if the tenants don't get along, there is a financial penalty for being so obnoxious to each other that someone feels forced to leave; the others will be fined a multiple of the rent until the house is legally re-occupied.

This will prevent small numbers of greedy, selfish, horrible anti-social tenants hogging properties that could easily house far more people. It will also reduce the demand for rental properties because tenants will be made to fit into fewer houses. Rich tenants will just pay the fine and treat it as a premium worth paying for the luxury of reduced occupation density. The higher rents they pay will be taxed as landlord's profits so the Exchequer gains.

It's fun thinking up arbitrary state penalties and taxes to be imposed on everyone except myself.

The elected government is perfectly entitled to change the rules about what people may or may not do with their own property, or what taxes they must pay.

The housing and economic policies of successive governments have created a perfect storm which has allowed a certain group of people to make vast profits at the expense of others. It's not quite as simple as saying the baby boomers have screwed over the under 30s, but that is the general impression.

If you are someone who has benefited from the system at the expense of others then I can understand why you might react angrily to someone who believes the system needs to be adjusted to redress the balance. However, my bothered bag is empty. Sorry.

CLAPTON

littlegreenfrog wrote: »

The elected government is perfectly entitled to change the rules about what people may or may not do with their own property, or what taxes they must pay.

The housing and economic policies of successive governments have created a perfect storm which has allowed a certain group of people to make vast profits at the expense of others. It's not quite as simple as saying the baby boomers have screwed over the under 30s, but that is the general impression.

If you are someone who has benefited from the system at the expense of others then I can understand why you might react angrily to someone who believes the system needs to be adjusted to redress the balance. However, my bothered bag is empty. Sorry.

presumably you have a 'target' group that you wish to benefit (under 30s perhaps?)

are you sure government policy is actually going to help them even if it harms those that make 'vast profits'.

wotsthat

I think the government should require renters to live at double current occupancy densities.

There's a housing shortage - it's not just owners and the government that need to play a part in sorting this out.

chucknorris

CLAPTON wrote: »

off topic really
but if you think that BLT will become increasing less profitable wouldn't it be better to start getting rid of property now.
Once falls start they can be very swift.
(note I have no real view about the profitability of being a landlord
but do believe London prices are supported by the 100,000 population annual increase)

I've thought about it, for the very reason that you raise, and there is a good argument for doing so. My profitability is skewed (beneficially) by having low margin tracker mortgages, and currently I am swayed by those. But there is a logic to getting out sooner when rates begin to creep up, I full accept that and will keep an open mind.

littlegreenfrog_2

CLAPTON wrote: »

presumably you have a 'target' group that you wish to benefit (under 30s perhaps?)

are you sure government policy is actually going to help them even if it harms those that make 'vast profits'.

It's not a case of drawing up eligibility criteria based on factors such as age.

But if you introduce policies which make it more difficult or less profitable for investors to buy up all the available housing stock, that should result in increased availability and affordability for ordinary people who just want to buy one home and live in it.

mwpt

chucknorris wrote: »

I've thought about it, for the very reason that you raise, and there is a good argument for doing so. My profitability is skewed (beneficially) by having low margin tracker mortgages, and currently I am swayed by those. But there is a logic to getting out sooner when rates begin to creep up, I full accept that and will keep an open mind.

I know cells continues to buy BTL properties in London, as do others on here? They must have supreme confidence in all the stars aligning for several years to come because from a pure yield business perspective, it's hard to see how London BTL works if you're a new investor.

Maybe you need contacts inside the industry to get the cheaper property deals though.

chucknorris

littlegreenfrog wrote: »

The elected government is perfectly entitled to change the rules about what people may or may not do with their own property, or what taxes they must pay.

The housing and economic policies of successive governments have created a perfect storm which has allowed a certain group of people to make vast profits at the expense of others. It's not quite as simple as saying the baby boomers have screwed over the under 30s, but that is the general impression.

If you are someone who has benefited from the system at the expense of others then I can understand why you might react angrily to someone who believes the system needs to be adjusted to redress the balance. However, my bothered bag is empty. Sorry.

Obviously I wasn't happy about the tax changes (turkeys don't vote for Xmas), but they were always part of the risk. But I've had a good run, and the unexpected low interest rates compensate for it (at least for me) anyway.

I also understand that others will welcome the changes, that's life, it isn't worth getting upset about. Although I felt about it that way anyway, we recently had a family bereavement, and that puts something like the tax changes into perspective.

CLAPTON

littlegreenfrog wrote: »

It's not a case of drawing up eligibility criteria based on factors such as age.

But if you introduce policies which make it more difficult or less profitable for investors to buy up all the available housing stock, that should result in increased availability and affordability for ordinary people who just want to buy one home and live in it.

so it would appear, your target group is home buyer rather than those that have to rent