Btl is a fools game these days

[DyslexicScientist]

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?

There will always be people who have to/want to rent and this demand will never be satisfied by social housing. These new rules mean its foreign investors, big faceless business, cash investors that will become large scale lls. Try telling them you cant pay your rent for a few weeks or your heating is broken and you want it fixed today. They will influence government policy, continually strive for more profit, and tenants will be in a much worse position (HMOs are the most profitable form of housing, so expect these to become prevalent and the norm).

As for making properties affordable, the few properties that are now going to be sold isnt suddenly going to make it affordable for the masses. Its not just the house that needs to be affordable, its the crap conveyancing system, stamp duty, unregulated estate agents)

Making rented properties safer, tenancies more secure, making lls pay equal tax etc is all fine, but I just dont see what any of these much hyped changes are actually going to do for most people - but it sounds great and will take years before its proved to have made no difference whatsoever.

Again, small time overseas landlords (retirees to Spain who keep a property in UK) will be affected. But these are very very few.

The vast majority of overseas landlords are really overseas businesses and as we've seen with companies like Amazon theyre not affected by UK taxes and Govt has no control over them.

I think as a country we've pretty much sold all our assets (houses, gas, water, electric, nucleur power) to multinationals and for the average UK citizen that cant be a good thing.

We have a btl which we will still make a small profit from when the tax changes kick in. It was never a money making exercise for us though. We wanted to buy a house which will be our eventual family home before the prices got too high. We don't want to move from where we are right now for various reasons.
The area where our btl is has a huge demand for rental properties. It's near a teaching hospital and there are loads of student doctors and nurses looking to rent. I really don't know what will happen when the number of available rental properties inevitably decreases.
When we move into our house in a few years I imagine we'll hold on to where we live now and rent it out. Unless of course they've taken further steps to fuck landlords over by then!

These new rules mean its foreign investors, big faceless business, cash investors that will become large scale lls

True but if a large percentage of the electorate is renting then government will have an incentive to legislate in their favour and properly regulate the rental sector

Government will never chose a small percent of the electorate over big business!!

and big business has the means to continually change their model so they are making more profit. A small scale landlord rents a family house out, they dont suddenly furnish it as a student house when thats more profitable, or chop it into flats when thats best, or do holiday lets when thats easiest, or house immigrants when thats subsidised...

Big business outwits govt each time.

I said if renters are a LARGE %age of the electorate

But yeah I take your point about large corporations they'll just feed on the UK and when we've no more flesh left on our bones fly off like vultures to destroy some other economy

Sorry to hijack but will the interest tax relief ending apply to us? We moved and had to rent out our house due to being in negative equity. We don't own a second home, we rent, and don't have a btl mortgage but got permission from our mortgage provider to rent out the property..

I can't afford to keep the house if the interest paid on the mortgage is no longer removed from the rental income. I will have to sell in time.

Can anyone tell me if I will definitely be affected, and if it will be from April 2017. Thank you xxx

I wonder what the % are renter/owners and then of the owners what % are occupiers/BTL/holiday homes.

Its easy to say more people are renting than before (7m by 2020) but there are more people fullstop and of these more students, more foreign workers, more immigrants and they are all renters through choice.

Its easy to say more people are renting than before

That's why I didn't say more in absolute terms, instead I said that renters make up a much larger percentage of the electorate.
Even middle class people's with well paid Jobs can't get on the housing ladder becxuase they are outbid by landlords and hamstrung by lending requirements

snowglobe yes - I assume you currently claim the interest on the mortgage against your income. You'll be hit by the reduction in ability to do that.

Evict your tenants and sell up when the time comes. The option of selling to a new landlord and having the tenants stay will be much less feasible now if the extra stamp duty makes the place too hard to sell. Not ideal and certainly not ideal for your tenants. Nice one , George.

the reason you rent out your home is not relevant. All landlords are classed the same. As others note, except big ones with hundreds of properties and overseas corporations. They have exemptions for some reason.

It's a hugely disjointed policy. As a LL all I did 2 years ago was move my rental properties into a corporate structure. I'm a business now and I do my own accounts so the difference in costs is minimal.

What pisses me off is seeing huge amounts of 'greenbelt' that is lying idle as the dairy farmers have gone bankrupt. The land is 3 miles from a city center and IMO should be developed. Not allowed though because it's protected land (until a gypsy family move in and are given all sorts of rights to live there). It's absolutely stupid because building some housing would reduce the average price of a family home from £250k in the area to £175k or even £150k.

Personally I think the goal should be to reduce the average house price in the UK to 3x the average salary of a couple, so about £150k.

If its hard to sell and you have to sell an you'll have too drop the price until it does sell
Someone who would like to buy but previously couldn't get a look in will now be able to have a secure family home, not have to worry about eviction or rent increases

Snowglobe for whatever reasons and whatever you want to call it, you own a property that you rent out, so yes this new tax rule applies to you (as does every other landlord rule and regulation).

I am an 'accidental LL' as couldn't sell when I moved cities.

I've been a good landlord - managed via a reputable agency, all the required risk assessments and safety certificates, anything fixed asap etc. Tenants have been there nearly 4 years now.

Tenants gave notice a month ago so I've decided not to re-let and instead just sell, take the hit and get rid.

It's not worth it if you only have one property and the change in interest relief is total bollocks. Interest is a tax dedicate me expense if you run a business, which renting is. Like, if you get a loan to buy a digger and go round doing digging works, the interest is deductible. So why the fuck isn't it deductible on the house loan? Stupid.

Anyway, people are deluded of you think that a few people like me selling at a bit of a loss are going to suddenly bring down house prices.

Someone who would like to buy but previously couldn't get a look in will now be able to have a secure family home, not have to worry about eviction or rent increases

Don't be so daft. It's not as simple as that.

Also what about all those student LL with one or two properties? I can't see a naice young family wanting to move into the heart of studentville! All those properties will just be bought by larger LLs who are far less amenable to being flexible on rent and pets etc

Thanks guys.

All those properties will just be bought by larger LLs who are far less amenable to being flexible on rent and pets etc
are they really?

So why the fuck isn't it deductible on the house loan? Stupid
obviously it's because the govt is legislating to discourage private ll's

obviously ll's will complain because they are being penalised
it's too bad, btl has had a negative effect on the housing market
something has to be done

taxes on property differ in many ways from other taxes

don't get me wrong, I understand why all you private LL are so anxious to paint yourselves as beneficent, but you're in it for profit, and a sensible investor puts her money in the assets which give the best return.

If property ceases to be the best asset it's time to put your money elsewhere

I was an accidental landlord after a change in circumstances, we didn't btl but ended up renting out our mortgaged property. We weren't naive or in it for a quick buck, unfortunately it ended badly. Tenants stopped paying rent which put a massive strain on us. Could no longer access the property and it took 8 months through the courts to get it back. Our lovely home had been turned in to a cannabis factory.

I'll never btl again as we lost all of our savings and then some. However if none of that had happened the tax changed would probably force me out of the game.

suzanne it's pretty impossible to find investments that match property (for the small investor anyway). That's probably why btl is so attractive. Atm property prices are rising (in many parts of the country anyway). If property prices fall suddenly, then many btl landlords will be stranded, with unaffordable interest only mortgages and negative equity. Maybe that's a good thing if it frees up housing for potential buyers who can't afford to buy in current market conditions. It's complex though-it's hard to say how much the market is influenced by foreign capital. (Probably more than the Govt is admitting).

it's pretty impossible to find investments that match property
yes, we all know exactly why btl ll's flocked in like flies around a jam pot

many btl landlords will be stranded, with unaffordable interest only mortgages and negative equity
yes, we all know that's a risk with any investment

you pays yer money and takes yer choice

I have one BTL, and my partner has a consent-to-let-ed property as he lives with me. I think neither of us intends to sell our London flats as the increase in capital growth over the long term makes it viable. The BTL, which is in the South East, goes from being OK to a complete pain and back at short intervals. I expect that at some point I'll sell it - possibly to pay down current home's mortgage, as we'd like to keep it and rent it out when the time comes to buy a family home.

I have not read the details of Osborne's statement (so apologies if I've missed something), but I feel that getting rid of / heavily taxing overseas LLs would be a much better strategy in London. (And also be far more beneficial than "London Help to Buy" which will likely inflate house prices further.)

If small-time LLs pull out of the market without anyone else moving in, rents will surely increase, won't they?

Snow, the advice above is not entirely right. For example the change does not affect landlords who only pay basic rate tax. So you would need to giev us a bit more information. If your income and your half of the rent still mean you are a 20% tax payer you are not affected by these tax changes.

But I agree with 53. The biggest issues I have seen with renting are usually with amateur LLs who don't know what they are doing. Probably not the ones renting out an inherited house but the ones who think they BTL is going to pay both mortgagees and have no clue how to manage properties.

Yes, same here mrsdevere. Except I wouldn't except amateur LLs renting inherited houses either, they're just as likely to have fallen into it without any idea of what they're doing as anyone else. Maybe even more so, if they don't manage to get as much free money as they'd like when trying to sell. This isn't to suggest that big corporate LLs will be/are marvellous, just I'm surprised to see several posters suggest small time BTLers are better than them. Really hasn't been my experience at all, though fortunately I no longer privately rent.