Treatment of BTL in the budget?

cells

CLAPTON wrote: »

I see that the guardian reports that Haringey Council has launched an online letting agency for private sector letting.

http://www.theguardian.com/money/2016/mar/10/london-council-launches-letting-agency-for-private-renters

Seems that one time fees will be 180 plus 72 (credit checks) with no renewal fees.

early day yet but it will be interesting if it takes off

The article says the council is putting up £500k into this which is ducking ridiculous especially for an online version without an expensive retail unit on a busy street.

Its probably a make job scheme of the worst kind whereby nepotism will mean the councils buddies will gt the jobs to run this agency that costs £500k and has no customers.

Also most landlords charge nothing to renew just let the AST convert to a periodic tenancy. The fees of £180 plus £72 per credit check also seem not all that cheap. I use agents but the few times I don't I just ask for 3 months bank statements and have a look at their income vs outgoing vs savings and charge a whole £0


If I lived in Haringey I would be annoyed as its likely going to be an expensive failure. They should limit their test to 1 year and £100k and if its not self financing at that point call it a day having wasted 'only' £100k rather than £500k

littlegreenfrog_2

cells wrote: »

Half the country is affordable for a couple on minimum wage

About half that remains is affordable for a couple on median full time wage.

That leaves about 25% of the stock which goes to those in higher than average wages and of course the top 5-10% of homes go to those that are in the high wealth group irrespective of their income.

So problems are not national but confined to certain local area. Those that think its a national problem think that they should be able to buy the better than average home on less than the average income by just themselves rather than as a couple.

Also regarding renting. In about half the country rents are close to social rents. Eg in the midlands a 3 bed terrace can be rented for £600 per month. That night be marginally higher than a council tenancy but then again your not in the middle of a bug council estate and the landlord pays invoem and capital taxes while the social sector does not

Unfortunately, employment opportunities are somewhat concentrated in London and the south east. We can't all move to Newcastle.

cells

littlegreenfrog wrote: »

Yes, that's quite clear, from your post.



Indeed. My personal agenda is that I believe that people who work hard, find gainful employment, pay their taxes and save what they can each month to give themselves a better future should be encouraged. They should be able to afford to buy themselves a modicum of financial security, which is what home ownership does. As long as you make your mortgage repayments, you can do whatever you like in your own home, no one can force you to move house if you don't want to, and by the time you retire you hopefully own the place outright and can survive on a much smaller income. Renting gives you none of that. If we are getting to a point where property ownership is out of reach for anyone below a certain age unless they are helped out by family, what incentive is there to work hard and better yourself? Very little.

Your personal agenda appears to be that you would like to enjoy your personal wealth and watch it increase in value. Any government policy aimed at sharing some of that wealth around so others can enjoy the prosperity you currently enjoy is anathema to you.

Morality does not exist in a vacuum, and I'm going to go out on a limb here and say I think my agenda is fairer than yours and most people would agree with me.



The fact that you see this as a game is very telling. As is the fact that you are inventing absurd examples such as the one you have given above to justify why you think government intervention is A BAD thing.



Why not? There should be some reward for working hard and bettering yourself. Why should young people like me lose a large chunk of their income at source (I pay 40% tax on the top slice of my salary, plus 9% towards my student loan) to pay for, among other things, healthcare for the baby boomers, then lose another large chunk of their income every month to pay off their landlord's mortgage, only to live in poverty when they eventually retire because they were priced out of the property market by greedy investors?



It's not just about shelter, it's about financial security. Properties exist, it's just that the ownership of those properties is concentrated among too few people.



There is very little state interference in the housing market in this country. That's a ridiculous thing to say.



As somebody who clearly takes an extremely non-interventionist approach, you would presumably be the first to agree that we cannot make houses in London and the home counties cheap enough for people who work as cleaners and shop assistants to be able to buy. As I clearly said, I think there should be more government support for people on low incomes to enable them to have a stable home. But I also think that people who get on in life, get good jobs and pay high taxes should be able to buy. Otherwise there is no incentive to better your financial situation.

The problem is how you define people as working hard.

A couple working 45 hours a week each works hard but they earn about half of what a couple with median full time earnings get

The question would then be how do you allocate houses. By earnings and wages or by how 'hard' someone works?

CLAPTON

cells wrote: »

The article says the council is putting up £500k into this which is ducking ridiculous especially for an online version without an expensive retail unit on a busy street.

Its probably a make job scheme of the worst kind whereby nepotism will mean the councils buddies will gt the jobs to run this agency that costs £500k and has no customers.

Also most landlords charge nothing to renew just let the AST convert to a periodic tenancy. The fees of £180 plus £72 per credit check also seem not all that cheap. I use agents but the few times I don't I just ask for 3 months bank statements and have a look at their income vs outgoing vs savings and charge a whole £0


If I lived in Haringey I would be annoyed as its likely going to be an expensive failure. They should limit their test to 1 year and £100k and if its not self financing at that point call it a day having wasted 'only' £100k rather than £500k

Haringey is labour so there is plenty of money

littlegreenfrog_2

cells wrote: »

The problem is how you define people as working hard.

A couple working 45 hours a week each works hard but they earn about half of what a couple with median full time earnings get

The question would then be how do you allocate houses. By earnings and wages or by how 'hard' someone works?

I'm not advocating some kind of communist approach to wages and property ownership. There are always going to be people working hard on law incomes, and people on higher incomes working less hard. There's no ideal solution. But when you have people working hard and earning decent money who are still unable to afford to buy themselves a property because the market has been sewn up by investors, that is a real problem and it needs to be curtailed.

mwpt

Sort out long term tenancies (mandatory for landlord side), only inflation linked rent increases during tenancy, and increase LTV ratios and rates for leveraged BTL. Then look at easing OO lending criteria and putting the stick into builders and councils to issue planning.

I'm not against state building, it may in fact be needed again, but the measures above can't be that difficult and I think will stabilise HPI and improve situation for both renters and OOs, and investors.

cells

littlegreenfrog wrote: »

I'm not advocating some kind of communist approach to wages and property ownership. There are always going to be people working hard on law incomes, and people on higher incomes working less hard. There's no ideal solution. But when you have people working hard and earning decent money who are still unable to afford to buy themselves a property because the market has been sewn up by investors, that is a real problem and it needs to be curtailed.

Those on average wages can buy the average terrace property in most of the country

caronoel

littlegreenfrog wrote: »

We can't all move to Newcastle.

Urgh - who would want to move to the grim North?

westernpromise

littlegreenfrog wrote: »

Yes, that's quite clear, from your post.

Which is simply a mirroring of your own views, as we'll go on to discuss.

Indeed. My personal agenda is that I believe that people who work hard, find gainful employment, pay their taxes and save what they can each month to give themselves a better future should be encouraged.

Although you go on to note that poor people will never be able to buy so tough luck, but people like yourself - graduates on higher rate tax - need even more advantages over those people so that you can buy. The fact that 40% taxpayers can't is "a real problem", to quote your other post. So what you actually mean is "some people - people like me - should be encouraged". Poor people can just lump it. They aren't "a real problem".

As long as you make your mortgage repayments, you can do whatever you like in your own home, no one can force you to move house if you don't want to

Well, unless somebody decides that punitive taxes on inflation are somehow a social good. In that case, you never really own your own home, because even when it's paid for and mortgage-free, you've no idea if you'll be able to afford the taxes some spiteful future government may decide to levy on it. This is why Miliband's "mansion" (i.e. "Tory constituency") tax was such a vote-loser. People who bought and paid for their house 30 years ago faced new taxes on the inflation that has affected it, and nobody believed the threshold would stay at £2 million. It was always going to apply to all houses eventually.

Your personal agenda appears to be that you would like to enjoy your personal wealth and watch it increase in value. Any government policy aimed at sharing some of that wealth around so others can enjoy the prosperity you currently enjoy is anathema to you.

You've no idea what my personal agenda is, but in general I'm opposed to state expropriation piously labelled as "fairness" to make a nasty and malicious course of action seem excusable. In the same way that all terms with "social..." in front of them tend to mean the opposite of what they purport to mean (social security, social worker, social justice, etc), "fairness" as the supposed motive for something almost always means "spite".

The fact that you see this as a game is very telling. As is the fact that you are inventing absurd examples such as the one you have given above to justify why you think government intervention is A BAD thing.

My examples are as egregious as yours, but from the opposite direction, and likewise spun spuriously as "fair". Unlike you, though, I'm openly stating that I'm coming out with this partial self-interested cant because it would suit me, and penalises only others I couldn't care less about. You're doing the same, but disingenuously suggesting that some grievous wrong would be righted by you and your specific demographic getting hold of a nice cheap house.

Why should young people like me lose a large chunk of their income at source (I pay 40% tax on the top slice of my salary, plus 9% towards my student loan) to pay for, among other things, healthcare for the baby boomers, then lose another large chunk of their income every month to pay off their landlord's mortgage, only to live in poverty when they eventually retire because they were priced out of the property market by greedy investors?

Why shouldn't you? The reason why you should is because the demographic you so resent did all that. Your idea of "fairness" entails taking tax money off "boomers" for 50 years then welshing on providing them with what they paid for? See - I told you it was spite.

Properties exist, it's just that the ownership of those properties is concentrated among too few people.

There you go again. It just so happens that property ownership is concentrated among people who aren't you. Outrageous! You must be furnished with a property at once! Fairness demands it!

There is very little state interference in the housing market in this country. That's a ridiculous thing to say.

We're going to have tio agree to disagree. If you don't think SDLT, HTB, subsidised HA accommodation, discounted council house sales, archaic planning laws, unfettered immigration and differential regulation between the owned versus rented sector amount to "very little state interference in the housing market", you aren't paying attention.

As somebody who clearly takes an extremely non-interventionist approach, you would presumably be the first to agree that we cannot make houses in London and the home counties cheap enough for people who work as cleaners and shop assistants to be able to buy. As I clearly said, I think there should be more government support for people on low incomes to enable them to have a stable home. But I also think that people who get on in life, get good jobs and pay high taxes should be able to buy. Otherwise there is no incentive to better your financial situation.

So in other words, as "houses in London and the home counties [can never be made] cheap enough for people who work as cleaners and shop assistants to be able to buy", you just figure we can write them all off. Let's focus instead on state intervention and aid to enrich people like yourself - graduates on the 40% rate earning far more money than mere cleaners - and extend the advantage you already enjoy. After all, you can't help everyone, so let's just help you. It's more fair. Right?

I've got a much, much fairer idea. Renters should be entitled to a minimum 3-year term of rental but to reflect this relative permanence, SDLT should be charged on the aggregate rent on any tenancy. The "fairness" (ha ha) argument for this is that on some leases it's already payable anyway, on the NPV of the rent. It is very unfair to homebuyers and leasehold buyers that renters can obtain use of the same property as them but dodge SDLT by passing off what is constructively a short lease as "renting".

To level the playing field, and correct this inequitable unfairness, whenever a tenant takes out a 3-year tenancy, the 3 years' rent is added up and SDLT charged. The average homeowner sells up every 7 years (or used to) so tenants taking out a 3-year rental would pay 3/7ths of whatever the stamp duty would have been.

This is an excellent tax because it's hard to avoid, it "levels the playing field", it is based on ability to pay (if other people are paying £90k to rent my £900k flat for 3 years, those rich other people can easily afford a measly extra £9k - always the argument trotted out when arguing for other people's taxes to go up).

Best of all, though, it won't be paid by me. It will be paid by other people. It therefore passes the test of being "fair", and should be introduced forthwith. It also won't be paid by poor people because they won't be able to afford it, but we've already established that these aren't a demographic you're concerned for, so they can be safely ignored anyway.

cells

westernpromise wrote: »

I've got a much, much fairer idea. Renters should be entitled to a minimum 3-year term of rental but to reflect this relative permanence, SDLT should be charged on the aggregate rent on any tenancy. The "fairness" (ha ha) argument for this is that on some leases it's already payable anyway, on the NPV of the rent. It is very unfair to homebuyers and leasehold buyers that renters can obtain use of the same property as them but dodge SDLT by passing off what is constructively a short lease as "renting".

To level the playing field, and correct this inequitable unfairness, whenever a tenant takes out a 3-year tenancy, the 3 years' rent is added up and SDLT charged. The average homeowner sells up every 7 years (or used to) so tenants taking out a 3-year rental would pay 3/7ths of whatever the stamp duty would have been.

This is an excellent tax because it's hard to avoid, it "levels the playing field", it is based on ability to pay (if other people are paying £90k to rent my £900k flat for 3 years, those rich other people can easily afford a measly extra £9k - always the argument trotted out when arguing for other people's taxes to go up).

Best of all, though, it won't be paid by me. It will be paid by other people. It therefore passes the test of being "fair", and should be introduced forthwith. It also won't be paid by poor people because they won't be able to afford it, but we've already established that these aren't a demographic you're concerned for, so they can be safely ignored anyway.

I think the average home-owner sells up once every 22 years. There are about 20 million non social homes in England&Wales and about a 900k a year in transactions (not including new builds) so its ~1 move per 22.5 years on average.

The transaction tax that is SDLT actually hits the young more as they tend to move more often as they start on the lower end of the market and move up say once every 5 years. Whereas the 45 year old who has bought their final home that home might not transact again for 50 years


Your transaction tax onto renters is an interesting idea. I think in London it would work out to ~£1.5k a year (£500k house held for 22.5 years at ~6% overall stamp duty and NPV of the cashflow). It wont happen for obvious reasons