BTL to be reviewed

subjecttocontract

I don't think that BTL landlords have caused problems for FTB's for the past couple of years. Very few of the professional landlords I know are buying any property at the moment because they can't make any money. Prices are to high and they dont want to be subsidising the rent every month to balance the books/ pay the mortgage.

At current property prices FTB's are welcome to whatever is on the market.

Judging by the prices that property is achieving at auction there are a lot of FTB's who are paying WAY over the odds for run down property.

Mrs_pbradley936

subjecttocontract wrote: »

I don't think that BTL landlords have caused problems for FTB's for the past couple of years. Very few of the professional landlords I know are buying any property at the moment because they can't make any money. Prices are to high and they dont want to be subsidising the rent every month to balance the books/ pay the mortgage.

At current property prices FTB's are welcome to whatever is on the market.

Quite. I would like someone who thinks landlords are a problem to explain why when looking at the figures. If the rent does not cover the mortgage, agent fees, voids and so on where is this alledged price competion coming from?
The inference seems to be that landlords are buying and that is pushing up prices but you can see from looking at the figures that it is not so.

brit1234

subjecttocontract wrote: »

I don't think that BTL landlords have caused problems for FTB's for the past couple of years.

Buy to let and loose lending have been causing the problems the last 7 years. Half my generation have put their lives on hold whilst the other half are mortgaged up to their eyes.

If you look at any new development you will find they have been targeted at landlords with a small corner set aside for shared ownership.

subjecttocontract

brit1234 wrote: »

Buy to let and loose lending have been causing the problems the last 7 years. Half my generation have put their lives on hold whilst the other half are mortgaged up to their eyes.

If you look at any new development you will find they have been targeted at landlords with a small corner set aside for shared ownership.

I don't think you have understood the current situation. I'll restate it and expand on it a little.

The sensible, numerate, professional landlords ......the majority.....ARE NOT buying any property because they haven't been able to make a profit for the last few years.

There are people ......there are always exceptions to the rule.....who think they want to be landlords and who are buying property and fooling themselves that they are doing well when they haven't taken all the costs into account.

Unfortunately if you don't own property NOW its a loose/ loose situation for you. If you are a landlord its a win win situation.

• If property prices rise landlords will be happy.
• If property prices fall rents will rise.
• If property prices fall many professional landlords will view it as a buying opportunity that will push prices back up.

Gorgeous_George

I'll try to put the record straight regarding relief on mortgage interest.

Forget, for now, all the other tax deductable expenditure.

Let's consider a BTL IO mortgage costing £400 per month. If rent is £400 per month there is no gain and therefore no income tax to pay. Now, if the rent is £500 there will be a gain of £100 and, for a basic rate tax payer, a tax bill equal to £22 per month. If the LL loses £100 per month he cannot reclaim £22 per month but can carry forward the loss for future years.

Are we really suggesting that income tax should be levied on the LL's costs?

It really can never happen. Not even this government would be that unfair/stupid. Besides, I doubt such a move would stand up in court.

As for 10% allowance for wear and tear. In the above example (£400 per month rent), the LL would be able to offset £480 against tax for the year (12 months at £40) if the house was let furnished. For a basic rate tax payer, the LL will be £105.60 better off for the tax year. Not a lot to cover wear and tear of the furnishings. The LL will not be able to claim costs of a new suit, bed, dining table etc., when the old ones are worn out. The flat rate 10% covers that.

Back on topic, this review needs to look at many aspects of BTL. Security of tenure and some form of 'repair fund' (possibly managed by an organisation similar to deposit schemes) being the main areas IMHO.

GG

wolvoman

brit1234 wrote: »

Part of the review is looking at closing the tax loop holes. From what I have heard the government want to remove the tax advantages so it is a even playing field with first time buyers.:j

But surely to level the playing field then FTBers (indeed all buyers) would then have to pay CGT when they come to sell?
Or am I confused?

Gorgeous_George

wolvoman wrote: »

But surely to level the playing field then FTBers (indeed all buyers) would then have to pay CGT when they come to sell?
Or am I confused?

brit1234 only wants a level playing field at her end

GG

HugoSP

Gorgeous_George wrote: »

brit1234 only wants a level playing field at her end

GG

It seems that these rumours she eludes to about the govt wanting to remove tax relief on mortgage interest are probably an opinion that she has heard/read, and is piling hope upon it.

We have a government who wants private landlords to be able to use their portfolios in their pensions, wants to make the CGT system easier for property investors and has relaxed funding rules for portfolios, allowing investors to raise finance, and offset interest charges on their own property to buy an investment property.

Landlords have to pay throught the nose for BTL mortgages, typically .5% more than homeowner mortgages. Landlords are swamped in red tape.

There are still opportunities out there though in the shape of properties that need to be sold quickly, however it's anyones guess whether that investment will pay off or not.

teabelly

If the govt want to meddle then they ought to tackle BTL lenders who only want max 12 months ASTs and non paying tenants who play the system and won't leave or pay up. A fast track eviction process for non paying tenants ie miss one payment and get automatically chucked out at the expiry of the current month's rent would actually mean landlords could treat tenants properly as the chancers and p takers would be out on their ears. There also needs to be a national black list of bad landlords and bad tenants so neither ruin renting for the rest of decent landlords and decent tenants.

Long term lets with built in reasonable rent rises should be the norm.

Removing tax allowability for mortgage interest is possibly illegal under EU regs I think so they can't. They're just making noises. The richest people in the UK have their money in property including G Brown so BTL landlords aren't going to be made to suffer.

FTBs that can't get on the property ladder are obviously too poor for them to be interested in anyway.

Gorgeous_George

Maybe BTL properties could be forced to register a change of use with the local council. Once registered as a BTL, reverting to owner occupier status would be at the discretion of the local planner. Equally, properties could have the BTL status removed if LLs failed to maintrain the property or failed to deal with anti-social tenants.

GG