Is State Pension Alone Enough To Live On?

zagfles

nigelbb said:

zagfles said:

nigelbb said:

Kim1965 said:

sevenhills said:

Kim1965 said:

So if a person reaches spa and only has the new state pension as income. If they are paying the £800 as a mortgage payment are they still able to get state help?? 

Why would someone that is able to buy their own house and likely have £100k+ in equity need more state help?

People bash the state pension, but people have known for decades that the state pension is not a millionaires income, so they need to save.

I agree. What i cant get my head around is that the monthly rent is of ten as much as a mortgage. I  cannot understand how our housing/house building strategy cannot come up with a more accessible home buying. If a family can rent for 25 yrs surely they can buy. 

Buy to let landlords have priced out first time buyers because they were given tax advantages not available to non-landlords & the criteria for lenders are too strict. My stepson mid-20s on pays about £500/month to rent a flat but a mortgage to buy the flat would be about £400/month except he cannot get a mortgage because the lenders want too high a deposit.

What tax advantages? BTL'ers pay higher stamp duty when they buy, CGT when they sell, and unlike virtually all businesses can't even fully offset genuine expenses like mortgage interest against rental income. Owners get the tax advantages.

That partly why buying is cheaper than renting, I don't know why that surprises anyone but it seems to. Plus obviously rent includes stuff that a buyer has to pay for eg property maintenance, insurance etc. Something often forgotten about when comparing the two, I've probably spent about £2-3k pa on average on property maintenance.

Until 2020 BTL landlords could offset mortgage interest in full against other income eg salary & receive relief at their marginal tax rate unlike private purchasers. Now they only get tax relief at 20% the poor things. If they were running a proper business through a limited company they could still offset all expenses against income including mortgage interest.

They could offset mortgage interest against rent, that's the basics of any business, you pay tax on profit not revenue. Mortgage interest is obviously business expense, just like a shopkeeper selling tins of beans only has to pay tax on profit, sales minus costs including overheads, not on the full retail price he sells the beans at. But now BTL'ers can't even fully offset mortgage interest. That plus CGT which you can't stage by selling in bits and using allowances like you can with shares, don't have the tax advantages of ISA/pensions, high stamp duty etc...

Are you a BTL landlord by any chance?

No. Never have been, never will be. Not only is it tax inefficient compared to pensions, a geared investment on a single property (or even a few) is massively risky and far too much hassle.

The reason that renting is more expensive than buying is partly because BTL landlords have forced up low end house prices but also because the renter is not only paying the BTL landlord's mortgage but also a premium on top for profit.

There's also maintenance costs, and all the nanny state regulations landlords have to comply with over and above what an owner occupier would have to do. Plus needing to budget for rental voids, or a non-paying tenant who could take 6 months to evict and may (as often happens in these situations) trash the place with no hope of the landlord recovering anything.

That's why rental costs are so high. So called "tenants rights" basically mean good tenants pay for bad ones.

nigelbb

zagfles said:

nigelbb said:

zagfles said:

nigelbb said:

Kim1965 said:

sevenhills said:

Kim1965 said:

So if a person reaches spa and only has the new state pension as income. If they are paying the £800 as a mortgage payment are they still able to get state help?? 

Why would someone that is able to buy their own house and likely have £100k+ in equity need more state help?

People bash the state pension, but people have known for decades that the state pension is not a millionaires income, so they need to save.

I agree. What i cant get my head around is that the monthly rent is of ten as much as a mortgage. I  cannot understand how our housing/house building strategy cannot come up with a more accessible home buying. If a family can rent for 25 yrs surely they can buy. 

Buy to let landlords have priced out first time buyers because they were given tax advantages not available to non-landlords & the criteria for lenders are too strict. My stepson mid-20s on pays about £500/month to rent a flat but a mortgage to buy the flat would be about £400/month except he cannot get a mortgage because the lenders want too high a deposit.

What tax advantages? BTL'ers pay higher stamp duty when they buy, CGT when they sell, and unlike virtually all businesses can't even fully offset genuine expenses like mortgage interest against rental income. Owners get the tax advantages.

That partly why buying is cheaper than renting, I don't know why that surprises anyone but it seems to. Plus obviously rent includes stuff that a buyer has to pay for eg property maintenance, insurance etc. Something often forgotten about when comparing the two, I've probably spent about £2-3k pa on average on property maintenance.

Until 2020 BTL landlords could offset mortgage interest in full against other income eg salary & receive relief at their marginal tax rate unlike private purchasers. Now they only get tax relief at 20% the poor things. If they were running a proper business through a limited company they could still offset all expenses against income including mortgage interest.

They could offset mortgage interest against rent, that's the basics of any business, you pay tax on profit not revenue. Mortgage interest is obviously business expense, just like a shopkeeper selling tins of beans only has to pay tax on profit, sales minus costs including overheads, not on the full retail price he sells the beans at. But now BTL'ers can't even fully offset mortgage interest. That plus CGT which you can't stage by selling in bits and using allowances like you can with shares, don't have the tax advantages of ISA/pensions, high stamp duty etc...

Are you a BTL landlord by any chance?

No. Never have been, never will be. Not only is it tax inefficient compared to pensions, a geared investment on a single property (or even a few) is massively risky and far too much hassle.

The reason that renting is more expensive than buying is partly because BTL landlords have forced up low end house prices but also because the renter is not only paying the BTL landlord's mortgage but also a premium on top for profit.

There's also maintenance costs, and all the nanny state regulations landlords have to comply with over and above what an owner occupier would have to do. Plus needing to budget for rental voids, or a non-paying tenant who could take 6 months to evict and may (as often happens in these situations) trash the place with no hope of the landlord recovering anything.

That's why rental costs are so high. So called "tenants rights" basically mean good tenants pay for bad ones.

The reason that BTL landlords can now only offset mortgage interest at standard rate of income tax is because the borrowing of money through a BTL mortgage was such a major tax advantage to the BTL landlord that the prices of lower end property was inflated to the detriment of owner occupiers & the taxpayer was giving BTL landlords hand outs to allow them to distort the property market. The disadvantage to house buyers & other taxpayers was so extreme that even the Tory government recognised the unfairness involved so acted to level the playing field. You write as though the plucky BTL landlords were making a sacrifice by offering rental properties instead of taking advantage of a one way bet at the expense of tenants & taxpayers.

zagfles

hugheskevi said:

zagfles said:

nigelbb said:

zagfles said:

nigelbb said:

DT2001 said:

My mother from 85 to 90 lived off about the equivalent of the SP. She had a small private pension but not a full SP. She owned her retirement flat, didn’t run a car, smoke, drink (much) or have cable/satelliteTV. She did the odd day trip and cafe visits.

The years before 85 were supplemented by savings to pay for her car and the occasional overseas holiday. The change was her choice and she was quite happy.
Now her care home fees (£1k p.w.) are paid from having downsized early in retirement.
You can live off SP but it does limit your choices so even having a small private pension pot might be good?

You can live off state pension but only if you own your home.

Why? If you rent you'd be able to get HB, if you've got an outstanding mortgage SMI. Someone renting with the SP as only income could be better off than someone who owns outright as they don't have property maintenance costs to pay.

If you receive housing benefit you aren't living off state pension.

I need Mr Logic here. OK, someone whose only income excluding potential means tested benefits is the state pension, would be entitled to HB if renting.

Someone renting with state pension as their only income will not be better off than someone who owns outright as the renter won't have the option of realising a capital asset worth hundreds of thousands of pounds.

Yeah, because they don't really need the house do they, plenty of room on park benches. They might be able to downsize, but I would imagine someone whose only retirement income is the state pension isn't likely to be living in a mansion with 3 spare bedrooms.

They would have the option to sell the house and rent, or to take out a lifetime mortgage to gain funds. Either approach would impact on means-tested benefits.

Personally I would very much like my elderly mother to do this. Like many older people, she is living alone in a 3 bedroom house that is far too much for her to maintain. Realistically she is into her last few years of life. It would be much better for her to sell the house and move into a much smaller 1 bedroom property (either owned or rented) and use additional money to support lifestyle (eg cleaner, or whatever). Sadly she has made the typical mistake of leaving such adjustments too late, and sees that as all too much trouble. 

Whilst in theory it is possible to live off very small amounts, in practice doing so puts you at the whim of councils and government. For example, there are schemes to get boilers replaced, but you won't have much, if any, choice about what you get, and the contractor will have won the contract by offering the bare minimum so are unlikely to make good areas after doing work, etc. Having your own money makes everything a lot more straightforward and adds a lot to quality of life.

I'm not sure of the wisdom of borrowing to fund ongoing expenditure eg maintenance costs. Equity release schemes don't "release" nearly as much equity as people think, as they have to account for rolled up interest. Downsizing yes, that's the only way to actually "release" equity (rather than borrow against it), but I think a lot of older people get used to their house, their neighbours etc, and moving somewhere new is just too daunting. Selling and then renting - you'd have to be careful how fast you spend your money as if you run out you may be denied HB if they think you deliberately deprived yourself.

The state pension is also at the "whim" of govt, they can and do change the rules (eg the "triple" lock).

zagfles

nigelbb said:

zagfles said:

nigelbb said:

zagfles said:

nigelbb said:

Kim1965 said:

sevenhills said:

Kim1965 said:

So if a person reaches spa and only has the new state pension as income. If they are paying the £800 as a mortgage payment are they still able to get state help?? 

Why would someone that is able to buy their own house and likely have £100k+ in equity need more state help?

People bash the state pension, but people have known for decades that the state pension is not a millionaires income, so they need to save.

I agree. What i cant get my head around is that the monthly rent is of ten as much as a mortgage. I  cannot understand how our housing/house building strategy cannot come up with a more accessible home buying. If a family can rent for 25 yrs surely they can buy. 

Buy to let landlords have priced out first time buyers because they were given tax advantages not available to non-landlords & the criteria for lenders are too strict. My stepson mid-20s on pays about £500/month to rent a flat but a mortgage to buy the flat would be about £400/month except he cannot get a mortgage because the lenders want too high a deposit.

What tax advantages? BTL'ers pay higher stamp duty when they buy, CGT when they sell, and unlike virtually all businesses can't even fully offset genuine expenses like mortgage interest against rental income. Owners get the tax advantages.

That partly why buying is cheaper than renting, I don't know why that surprises anyone but it seems to. Plus obviously rent includes stuff that a buyer has to pay for eg property maintenance, insurance etc. Something often forgotten about when comparing the two, I've probably spent about £2-3k pa on average on property maintenance.

Until 2020 BTL landlords could offset mortgage interest in full against other income eg salary & receive relief at their marginal tax rate unlike private purchasers. Now they only get tax relief at 20% the poor things. If they were running a proper business through a limited company they could still offset all expenses against income including mortgage interest.

They could offset mortgage interest against rent, that's the basics of any business, you pay tax on profit not revenue. Mortgage interest is obviously business expense, just like a shopkeeper selling tins of beans only has to pay tax on profit, sales minus costs including overheads, not on the full retail price he sells the beans at. But now BTL'ers can't even fully offset mortgage interest. That plus CGT which you can't stage by selling in bits and using allowances like you can with shares, don't have the tax advantages of ISA/pensions, high stamp duty etc...

Are you a BTL landlord by any chance?

No. Never have been, never will be. Not only is it tax inefficient compared to pensions, a geared investment on a single property (or even a few) is massively risky and far too much hassle.

The reason that renting is more expensive than buying is partly because BTL landlords have forced up low end house prices but also because the renter is not only paying the BTL landlord's mortgage but also a premium on top for profit.

There's also maintenance costs, and all the nanny state regulations landlords have to comply with over and above what an owner occupier would have to do. Plus needing to budget for rental voids, or a non-paying tenant who could take 6 months to evict and may (as often happens in these situations) trash the place with no hope of the landlord recovering anything.

That's why rental costs are so high. So called "tenants rights" basically mean good tenants pay for bad ones.

The reason that BTL landlords can now only offset mortgage interest at standard rate of income tax is because the borrowing of money through a BTL mortgage was such a major tax advantage to the BTL landlord that the prices of lower end property was inflated to the detriment of owner occupiers & the taxpayer was giving BTL landlords hand outs to allow them to distort the property market. The disadvantage to house buyers & other taxpayers was so extreme that even the Tory government recognised the unfairness involved so acted to level the playing field.

It's not a "major tax advantage", it's how any business works. You get taxed on profits, and you can offset expenses against that profit. The govt decided to "distort" the property market by doing the above, plus higher stamp duty etc, which when added to stuff like CGT swings the tax advantage firmly to the owner occupier.

The real problem wasn't BTL'ers distorting the market, it's stuff like people buying second homes, dodgy foreign money buying top-end property which inflates their price and ripples down, people buying houses bigger than they need because "it's a good investment". People "wasting" property - properties that are rented out aren't "wasted".

You write as though the plucky BTL landlords were making a sacrifice by offering rental properties instead of taking advantage of a one way bet at the expense of tenants & taxpayers.

That's the illusion that some people have about the property market, that it's a one way bet. No it isn't. I know people who've been badly burned. A friend's son, bought a flat to live in, good job, quite happy. Then started to have mental health problems. Couldn't cope on his own, had to go back to live with his parents. Always intended to return to his flat, but didn't get better. Then he got made redundant. Couldn't find another job, had no income, couldn't face living alone yet, but didn't want to give up on independance so didn't want to sell the flat, so his only option was to rent it. Had nightmare tenants which made his mental health far worse. Eventually sold it for a big loss.

We need landlords. Both my kids are renting, they are living in places where they are unlikely to stay so buying is not worth it. Getting a place to rent is so much hassle because of all the checks landlords do to try to protect themselves against bad tenants. Rents are high because landlords have to budget for this plus make provision for voids. BTL'ers as we see here all the time seem not to be people who particularly understand property investment but people who don't think they understand other investments like pensions etc. BTL should be a safe and reasonable investment just like running a corner shop should be. But, IMO, it isn't. It's highly risky, tax inefficient, and far too much hassle. And that's bad for tenants as well as landlords.

bostonerimus

Like most topics today there's a lot of hyperbolae talked about BTL. I'm sure there are cases of abuse by both landlords and tenants at the extremes, but for my part being a landlord has been a long term project that has benefited my finances and I hope it has benefited my tenants too. 

It needs to be emphasized that BTL is not easy. You are starting a small business and you need to analyze the numbers carefully and integrate it into you larger financial plan. You also need to provide good quality and safe accommodation and be prepared to maintain the property. BTL does not replace a pension or an ISA (which should come first), but it is a nice compliment if you can make it work. My approach was to buy a two family home with a flat on the ground floor and a larger flat above where I live. I used the rental income to make extra mortgage payments and so paid off the whole house in 14 years. I did deduct mortgage interest when I was paying it and obviously still deduct expenses and depreciation, although not depreciation for much longer. I keep my rental below the market rate because I can afford to and I don't want to contribute to rental inflation.

I've ended up with a nice house and regular income and significant capital appreciation. It was a risk to take on a larger mortgage at the beginning, but I don't think that it was any larger risk than I took investing in the stock market and added some diversity to my finances, and I'm very grateful for that now that I'm retired and mortgage free on essentially two properties.

sevenhills

nigelbb said:

Don't confuse racists with facts.

I think you are right, racists cannot be educated.

nigelbb

zagfles said:

nigelbb said:

zagfles said:

nigelbb said:

zagfles said:

nigelbb said:

Kim1965 said:

sevenhills said:

Kim1965 said:

So if a person reaches spa and only has the new state pension as income. If they are paying the £800 as a mortgage payment are they still able to get state help?? 

Why would someone that is able to buy their own house and likely have £100k+ in equity need more state help?

People bash the state pension, but people have known for decades that the state pension is not a millionaires income, so they need to save.

I agree. What i cant get my head around is that the monthly rent is of ten as much as a mortgage. I  cannot understand how our housing/house building strategy cannot come up with a more accessible home buying. If a family can rent for 25 yrs surely they can buy. 

Buy to let landlords have priced out first time buyers because they were given tax advantages not available to non-landlords & the criteria for lenders are too strict. My stepson mid-20s on pays about £500/month to rent a flat but a mortgage to buy the flat would be about £400/month except he cannot get a mortgage because the lenders want too high a deposit.

What tax advantages? BTL'ers pay higher stamp duty when they buy, CGT when they sell, and unlike virtually all businesses can't even fully offset genuine expenses like mortgage interest against rental income. Owners get the tax advantages.

That partly why buying is cheaper than renting, I don't know why that surprises anyone but it seems to. Plus obviously rent includes stuff that a buyer has to pay for eg property maintenance, insurance etc. Something often forgotten about when comparing the two, I've probably spent about £2-3k pa on average on property maintenance.

Until 2020 BTL landlords could offset mortgage interest in full against other income eg salary & receive relief at their marginal tax rate unlike private purchasers. Now they only get tax relief at 20% the poor things. If they were running a proper business through a limited company they could still offset all expenses against income including mortgage interest.

They could offset mortgage interest against rent, that's the basics of any business, you pay tax on profit not revenue. Mortgage interest is obviously business expense, just like a shopkeeper selling tins of beans only has to pay tax on profit, sales minus costs including overheads, not on the full retail price he sells the beans at. But now BTL'ers can't even fully offset mortgage interest. That plus CGT which you can't stage by selling in bits and using allowances like you can with shares, don't have the tax advantages of ISA/pensions, high stamp duty etc...

Are you a BTL landlord by any chance?

No. Never have been, never will be. Not only is it tax inefficient compared to pensions, a geared investment on a single property (or even a few) is massively risky and far too much hassle.

The reason that renting is more expensive than buying is partly because BTL landlords have forced up low end house prices but also because the renter is not only paying the BTL landlord's mortgage but also a premium on top for profit.

There's also maintenance costs, and all the nanny state regulations landlords have to comply with over and above what an owner occupier would have to do. Plus needing to budget for rental voids, or a non-paying tenant who could take 6 months to evict and may (as often happens in these situations) trash the place with no hope of the landlord recovering anything.

That's why rental costs are so high. So called "tenants rights" basically mean good tenants pay for bad ones.

The reason that BTL landlords can now only offset mortgage interest at standard rate of income tax is because the borrowing of money through a BTL mortgage was such a major tax advantage to the BTL landlord that the prices of lower end property was inflated to the detriment of owner occupiers & the taxpayer was giving BTL landlords hand outs to allow them to distort the property market. The disadvantage to house buyers & other taxpayers was so extreme that even the Tory government recognised the unfairness involved so acted to level the playing field.

It's not a "major tax advantage", it's how any business works. You get taxed on profits, and you can offset expenses against that profit. The govt decided to "distort" the property market by doing the above, plus higher stamp duty etc, which when added to stuff like CGT swings the tax advantage firmly to the owner occupier.

The real problem wasn't BTL'ers distorting the market, it's stuff like people buying second homes, dodgy foreign money buying top-end property which inflates their price and ripples down, people buying houses bigger than they need because "it's a good investment". People "wasting" property - properties that are rented out aren't "wasted".

You write as though the plucky BTL landlords were making a sacrifice by offering rental properties instead of taking advantage of a one way bet at the expense of tenants & taxpayers.

That's the illusion that some people have about the property market, that it's a one way bet. No it isn't. I know people who've been badly burned. A friend's son, bought a flat to live in, good job, quite happy. Then started to have mental health problems. Couldn't cope on his own, had to go back to live with his parents. Always intended to return to his flat, but didn't get better. Then he got made redundant. Couldn't find another job, had no income, couldn't face living alone yet, but didn't want to give up on independance so didn't want to sell the flat, so his only option was to rent it. Had nightmare tenants which made his mental health far worse. Eventually sold it for a big loss.

I didn't say buying property was a one way bet. I said BTL was a one way bet because of all the tax advantages. Landlords leveraged further property purchases with the security of existing properties ratcheting up house prices & their personal property portfolios at the expense of tenants & taxpayers. Restricting tax relief on BTL mortgage interest to standard rate only was because of the market distortion & loss to the taxpayer or perhaps you have some other explanation for this action by a Tory government?

nigelbb

sevenhills said:

nigelbb said:

The reason that renting is more expensive than buying is partly because BTL landlords have forced up low end house prices but also because the renter is not only paying the BTL landlord's mortgage but also a premium on top for profit.

Now that I have bought my council house, I will need to pay for a new boiler and roof maintenance in around five years, so there are many expenses for homeowners.

My ex rents from the council, she is suited to renting because the council do all the repairs, they even replaced a bulb in her outdoor light - no charge.

It's a bit of a cheek to quibble about paying for a boiler & roof maintenance at some indeterminate future date when you have been handed a cash windfall!

BTW I have owned various houses over the last forty plus years & never needed to pay for a new boiler or roof maintenance

zagfles

nigelbb said:

zagfles said:

nigelbb said:

zagfles said:

nigelbb said:

zagfles said:

nigelbb said:

Kim1965 said:

sevenhills said:

Kim1965 said:

So if a person reaches spa and only has the new state pension as income. If they are paying the £800 as a mortgage payment are they still able to get state help?? 

Why would someone that is able to buy their own house and likely have £100k+ in equity need more state help?

People bash the state pension, but people have known for decades that the state pension is not a millionaires income, so they need to save.

I agree. What i cant get my head around is that the monthly rent is of ten as much as a mortgage. I  cannot understand how our housing/house building strategy cannot come up with a more accessible home buying. If a family can rent for 25 yrs surely they can buy. 

Buy to let landlords have priced out first time buyers because they were given tax advantages not available to non-landlords & the criteria for lenders are too strict. My stepson mid-20s on pays about £500/month to rent a flat but a mortgage to buy the flat would be about £400/month except he cannot get a mortgage because the lenders want too high a deposit.

What tax advantages? BTL'ers pay higher stamp duty when they buy, CGT when they sell, and unlike virtually all businesses can't even fully offset genuine expenses like mortgage interest against rental income. Owners get the tax advantages.

That partly why buying is cheaper than renting, I don't know why that surprises anyone but it seems to. Plus obviously rent includes stuff that a buyer has to pay for eg property maintenance, insurance etc. Something often forgotten about when comparing the two, I've probably spent about £2-3k pa on average on property maintenance.

Until 2020 BTL landlords could offset mortgage interest in full against other income eg salary & receive relief at their marginal tax rate unlike private purchasers. Now they only get tax relief at 20% the poor things. If they were running a proper business through a limited company they could still offset all expenses against income including mortgage interest.

They could offset mortgage interest against rent, that's the basics of any business, you pay tax on profit not revenue. Mortgage interest is obviously business expense, just like a shopkeeper selling tins of beans only has to pay tax on profit, sales minus costs including overheads, not on the full retail price he sells the beans at. But now BTL'ers can't even fully offset mortgage interest. That plus CGT which you can't stage by selling in bits and using allowances like you can with shares, don't have the tax advantages of ISA/pensions, high stamp duty etc...

Are you a BTL landlord by any chance?

No. Never have been, never will be. Not only is it tax inefficient compared to pensions, a geared investment on a single property (or even a few) is massively risky and far too much hassle.

The reason that renting is more expensive than buying is partly because BTL landlords have forced up low end house prices but also because the renter is not only paying the BTL landlord's mortgage but also a premium on top for profit.

There's also maintenance costs, and all the nanny state regulations landlords have to comply with over and above what an owner occupier would have to do. Plus needing to budget for rental voids, or a non-paying tenant who could take 6 months to evict and may (as often happens in these situations) trash the place with no hope of the landlord recovering anything.

That's why rental costs are so high. So called "tenants rights" basically mean good tenants pay for bad ones.

The reason that BTL landlords can now only offset mortgage interest at standard rate of income tax is because the borrowing of money through a BTL mortgage was such a major tax advantage to the BTL landlord that the prices of lower end property was inflated to the detriment of owner occupiers & the taxpayer was giving BTL landlords hand outs to allow them to distort the property market. The disadvantage to house buyers & other taxpayers was so extreme that even the Tory government recognised the unfairness involved so acted to level the playing field.

It's not a "major tax advantage", it's how any business works. You get taxed on profits, and you can offset expenses against that profit. The govt decided to "distort" the property market by doing the above, plus higher stamp duty etc, which when added to stuff like CGT swings the tax advantage firmly to the owner occupier.

The real problem wasn't BTL'ers distorting the market, it's stuff like people buying second homes, dodgy foreign money buying top-end property which inflates their price and ripples down, people buying houses bigger than they need because "it's a good investment". People "wasting" property - properties that are rented out aren't "wasted".

You write as though the plucky BTL landlords were making a sacrifice by offering rental properties instead of taking advantage of a one way bet at the expense of tenants & taxpayers.

That's the illusion that some people have about the property market, that it's a one way bet. No it isn't. I know people who've been badly burned. A friend's son, bought a flat to live in, good job, quite happy. Then started to have mental health problems. Couldn't cope on his own, had to go back to live with his parents. Always intended to return to his flat, but didn't get better. Then he got made redundant. Couldn't find another job, had no income, couldn't face living alone yet, but didn't want to give up on independance so didn't want to sell the flat, so his only option was to rent it. Had nightmare tenants which made his mental health far worse. Eventually sold it for a big loss.

I didn't say buying property was a one way bet. I said BTL was a one way bet because of all the tax advantages.

You keep banging on about these "tax advantages". Do you understand capital gains tax and stamp duty? Do you understand that they are levied differently? Who pays more stamp duty, a BTL'er or a first time buyer? Who pays CGT, a BTL'er or an owner occupier? Do you understand how it's normal practice to be taxed on profits rather than revenue? Maybe I'll tell my friend's son with MH problems that he lost a "one way" bet. Or if you want to pull pedantry (he didn't actually buy to let, he let a flat he already owned), maybe you'd suggest he uses his remaining money to buy a BTL, he can't go wrong, can he?

How many properties have you got? Why does anyone bother with pensions etc when they can do a "one way bet" on a BTL

Restricting tax relief on BTL mortgage interest to standard rate only was because of the market distortion & loss to the taxpayer or perhaps you have some other explanation for this action by a Tory government?

All governments constantly interfere in the housing market for political reasons as well as fiscal ones. Why do you think it's surprising for a Tory govt to? Or do you believe the tired old stereotype of the "Tories looking after their rich mates" and so find it surprising they do something which adversely affects their land owning capitalist mates? If you do maybe you should look at loads of other stuff they've done.

Gordon Brown was the real BTL hero, house prices skyrocketed under his watch as chancellor, see https://www.allagents.co.uk/house-prices-adjusted/ That's was the golden age for any BTL'er. With hindsight, even I might have done in 1997 when he promised "not to let house prices get out of control" in his first budget

zagfles

bostonerimus said:

Like most topics today there's a lot of hyperbolae talked about BTL. I'm sure there are cases of abuse by both landlords and tenants at the extremes, but for my part being a landlord has been a long term project that has benefited my finances and I hope it has benefited my tenants too. 

It needs to be emphasized that BTL is not easy. You are starting a small business and you need to analyze the numbers carefully and integrate it into you larger financial plan. You also need to provide good quality and safe accommodation and be prepared to maintain the property. BTL does not replace a pension or an ISA (which should come first), but it is a nice compliment if you can make it work. My approach was to buy a two family home with a flat on the ground floor and a larger flat above where I live. I used the rental income to make extra mortgage payments and so paid off the whole house in 14 years. I did deduct mortgage interest when I was paying it and obviously still deduct expenses and depreciation, although not depreciation for much longer. I keep my rental below the market rate because I can afford to and I don't want to contribute to rental inflation.

I've ended up with a nice house and regular income and significant capital appreciation. It was a risk to take on a larger mortgage at the beginning, but I don't think that it was any larger risk than I took investing in the stock market and added some diversity to my finances, and I'm very grateful for that now that I'm retired and mortgage free on essentially two properties.

Isn't your rental in the USA? Which probably has completely different taxation and rental laws?