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AIBU?

Btl is a fools game these days

176 replies

DyslexicScientist · 28/11/2015 07:48

It seems clear that the gov are targeting this, with removing the interest tax relief, charging 3% extra stamp duty on second homes.

Its no surprise as they will care less about someone with 10 btl then 10 people who want to buy.

I know a lot on here have portfolios, are people buying more? Selling? Or keeping steady?

OP posts:
specialsubject · 28/11/2015 10:29

we were thinking of buying a second rental, but with this sustained policy we probably won't now. Our rental isn't up for sale any time soon, but as and when it is we'll have to evict whoever is in it to sell. This stamp duty is probably the end of selling a place to another landlord with the same tenant staying on.

that said, I'm thinking VERY long term so would probably sell at a point when a tenant had left anyway. But many others may not do this.

The bad landlords tend to be the housing associations and those with large numbers of properties. The people using BTL to make a bit more money than they can with savings are not really the right target.

the reduction in tax relief is fair enough though, puts people on a level playing field. But again, the government doesn't notice that many BTLs are bought with cash as a direct result of negligible savings rates.

Aibuaddict · 28/11/2015 11:01

DH and I have two rentals in the South East. As they are not so much about day to day profit as they are about delivering security at pensionable age, we'll hold on to them for now.

We had wanted to develop a larger portfolio but regardless of these policies, I'm not sure it ever would have been feasible anyway. We certainly won't be selling them to buy other ones.

To be honest, despite these policies not benefitting us, I think it is good that there are steps to tackle this shameful housing crisis. I just hope the government has a plan to alleviate old age poverty when Generation Y reaches pensionable age too. But I guess that will be another government's problem, right?

cleaty · 28/11/2015 11:03

Buy to let has had so many negative impacts. I am glad they are finally taking steps to discourage people doing this.

jevoudrais · 28/11/2015 11:12

I think it's quite sad in that most I know have a BTL on the side as something for their child to inherit or for their old age basically. Not to make mega bucks. Not sure if these people have pensions as well or not?

DH and I are quite young still (20's) but have managed to get onto the housing ladder and both pay into pensions. Who knows what the future will hold. Definitely no BTL for us though, more hassle than it's worth for me anyway. Those I know have no intention to sell. I don't know anyone who has been buying recently anyway, prices have gone up to the point they're more inclined to sell and cash in than invest in more. My uncle has quite a large portfolio and has sold a few off but that was long before any of this was announced.

All these starter homes they talk of offering at a discount, I have visions of them being tiny little boxes that don't really sell for much anyway. A starter home that ends up a forever home because people are stuck in them. Still, better than nothing and at least they are doing something. I don't know if it will make much of a dent in those desperate to buy though.

absolutelynotfabulous · 28/11/2015 11:14

I have 2 properties, one being a btl. Hardly a portfolio, but I get where you're coming from. If I invest in more, it certainly won't be on a btl basis. In Wales, the Govt is talking about introducing a "good landlord" compulsory registration scheme, complete with training courses. It's missing the point, in my view-the rogue landlords are not the likes of small fry like me.

Binkybix · 28/11/2015 11:14

I'm an accidental landlord and was debating whether to sell when the mortgage term ends - I think this tips me into selling, but if I was guaranteed to have the cash flow to hold it for a really long time I'd keep it.

sofato5miles · 28/11/2015 11:15

The changes haven't affected us massively. Obviously, the costs have increased but not to a punitive standard. Unless I have completely misunderstood.

We have two btl in Greater London.

suzannecaravaggio · 28/11/2015 11:21

The housing crisis is complex and multi factorial, very hard to predict exactly how one measure will affect it

cleaty · 28/11/2015 11:29

I don't know many people who have a BTL despite being in my 50's. But I don't fit into the wealthier demographic that seems to make up the majority of MN.
BTL are mainly what used to be first time buyers housing. It has made it much harder for fist time buyers by pushing up the prices of those houses.

suzannecaravaggio · 28/11/2015 11:33

If you have spare money the rational thing to do is invest it where it will get the best return

Boleh · 28/11/2015 11:34

My DH and I have a flat each and were planning to sell one and buy a house (adding in savings) and keep the other as a rental. Unfortunately now the tax means we'd be paying a substantial amount into it every month even if it was continuously rented and with no major issues so it's just too much for us to be putting into a 'savings pot' that we can't easily stop contributing to. We'd then decided to basically sell when the tenants left (assuming it was in the next year or two) since the tax changes don't come in immediately but now we are in mad scramble to get it sold before the stamp duty change in April with the expectation that prices will then drop on obvious BTL properties so tenants will get notice at the end of Jan latest.

53rdAndBird · 28/11/2015 11:38

I've rented for years, and the biggest landlord problems I've had have been from landlords with only one or two properties, so I'm afraid I don't buy the idea that smalltime BTL-ers aren't really the problem. Part of the housing problem is that renting is expensive, insecure and frequently awful, and that can be just as much the case with smaller landlords.

shebird · 28/11/2015 11:40

So if less people are willing to become landlords does this mean that if we have less BTL properties and therefore rents will also increase? Despite the initiatives to get people on the housing ladder there will always be a great need and demand for rental property.

suzannecaravaggio · 28/11/2015 11:43

Fewer landlords does not mean fewer properties

suzannecaravaggio · 28/11/2015 11:48

If a landlady wants to sell because btl is no longer viable he will have to sell to an owner occupier (in the absence of a landord who wants to buy) and may have to drop the price until it is affordable for an owner occupier

SanityClause · 28/11/2015 11:49

We are selling our last one, atm.

I know BTL is unpopular, but it has allowed middle income people to invest in rental properties.

Now, it will only be those with capital who can afford to buy rental properties, i.e. the very rich, not those who need to borrow.

But who thought this government was interested in social mobility, anyway?

MrsDeVere · 28/11/2015 11:51

This reply has been deleted

Message withdrawn at poster's request.

shebird · 28/11/2015 11:53

My concern is that there is already a lack of rental property in many areas, surely reducing this avability further will drive deman and rents even higher especially in London and the South East.

shebird · 28/11/2015 11:54

*demand

IsabellaofFrance · 28/11/2015 11:57

We have a rental property (not strictly BTL as we had that one first before buying our current property). We are planning on buying another in the future, maybe in 2 years time.

For us, the house we would buy would be small (

suzannecaravaggio · 28/11/2015 11:58

perhaps the intention is to provide an incentive for larger corporate landlords and a disincentive for small private landlords?

ipsos · 28/11/2015 12:00

I'm really glad that they are discouraging second home ownership and BTL. I would love to see investors going back into non-property items like shares so that people who need somewhere to live and raise a family could buy for themselves.

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suzannecaravaggio · 28/11/2015 12:04

Its not enough on its own
What about foreign investors
Land banking
Lack of social housing
Etc

LegoRuinedMyFinances · 28/11/2015 12:05

I'll be honest, I'm quite pleased at the changes.

We have a good first time buyer budget for our area. However, our area is much sought after - theres fifteen viewings for each new property to the market. We looked at a property two weekends ago where there was in excess of twenty viewers - it was the first day of an open house and it went to best and final the next day. Estate agents advised that four people had put in offers at asking price.

More than half of those are BTL'ers. The estate agents we deal with have been honestly brutal about the fact that the majority of sales go to BTL'ers as most properties here go for 15% above listed value and first time buyers generally can't reach those prices.

It will help families like us buy our first house, however, I do feel sorry for those people who inherit property, who shouldn't be forced to sell (not sure if the changes affect them, but posters above seem to suggest it will).

MrsDeVere · 28/11/2015 12:12

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Message withdrawn at poster's request.

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