Is Buy to Let dead?

ThinkingOutLoud_2

Cakeguts wrote: »

Depends is you need a mortgage or not to buy the properties. If you don't have mortgages on any of the properties nothing changes.

Except as noted above the higher stamp duty, if you have not yet bought the property, surely?

And the sense that landlords are under the government and public spotlight whether deserved or not.

sparky130a

All i know is the housing market in this country is fu5ked.

cloo

BTL buyers have apparently dropped significantly in last quarter according to new figures. I think new rules have put off what I might call the 'average landlord' rather than the 'average person'. I think the average landlord is not rolling in it and is someone of average earnings who perhaps comes into enough money to put a deposit down on somewhere and make a not-necessarily-massive profit on the rent once costs and mortgages are taken off (something like 79% of LLs only own one property). So the recent changes are likely to put these off, which is potentially a problem, and one I think not considered by wealthy landlord MPs who have a little portfolio and can potentially take the hit of the changes better than someone on an average salary who makes n extraa £200 a month on the rental she bought with the inheritance from grandma.

brit1234

Zola. wrote: »

For the average Joe who looks to acquire another house for letting out, is buy to let a bad investment now?

I remember hearing the government tax landlords very heavily now, making it much harder to make a profit.

No it is not dead, some landlords protest too much. There were some landlords acting extremely irresponsibly taking on huge leverage debt over multiple properties and they are going to struggle. Having 1 buy to let after buying at the right price is going to be no issue.

caronoel

brit1234 wrote: »

No it is not dead, some landlords protest too much. There were some landlords acting extremely irresponsibly taking on huge leverage debt over multiple properties and they are going to struggle. Having 1 buy to let after buying at the right price is going to be no issue.

We have missed the incoherent ramblings of brit1234.

Are you still holding out for the 50% price drop by Christmas 2009?

kilby_007

caronoel wrote: »

We have missed the incoherent ramblings of brit1234.

Obviously you have some history, but how was that incoherent rambling? Seemed right on the money to me...

Hoploz

It seems pretty dead for me. I've done the maths on what should've been a no-brainer this week, a great value property with a great yield came on the market .... But because I'm a higher rate tax payer already, and now that the whole rental income is taken as income for tax purposes, it'd mean paying 40% of the whole rental income in tax ... Therefore I'd be paying out more than I'd get! So my portfolio is staying as is for now!

I can't see how this is going to help the rental market. No landlord is going to be spending out on repairs and improvements when they're being crucified by tax! My husband said it'd make more financial sense to 'buy to leave' rather than let, ie leave the property empty so no additional income tax!

MyOnlyPost

Hoploz wrote: »

My husband said it'd make more financial sense to 'buy to leave' rather than let, ie leave the property empty so no additional income tax!

Your husband is a wise man, this may well be what future property speculators do. This has been happening with overseas money in London for a while and could spread nationwide.

The only reason I can see for the new legislation, if former chancellor Osborne were to be honest, is because some landlords were switching their personal mortgages on to their BTL portfolios and so living in a home that they couldn't have otherwise owned outright, hence the comment that BTL landlords were receiving subsidies ordinary homebuyers weren't. I personally find that practice by BTL landlords immoral but morality is for the individual so I don't judge. If the government didn't like that practice then ban it but as is typical of governemnt of any colour we hit a pin with a sledgehammer.

JW394

Hoploz wrote: »

My husband said it'd make more financial sense to 'buy to leave' rather than let, ie leave the property empty so no additional income tax!

Would you ever be better off getting a rent of 0 instead of paying 40% tax on a non-zero rent?

tlc678910

JW394 wrote: »

Would you ever be better off getting a rent of 0 instead of paying 40% tax on a non-zero rent?

(with a fictional example)
I think the principle of a loss for renting out a property is:
100% mortgage (interest only) of 10K a year
10K in rental receipts
A higher rate tax payer on 40% tax (or one who was pushed into higher tax band by their rental receipts) would only receive a 20% credit against their tax for the mortgage interest and so would owe £2000 tax despite making no profit at all.

Tlc