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Original poster

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 17:42

for once, suzanne, I agree with you - if the BTL no longer is the best investment then it will be up for sale, after not renewing the tenancy when it ends. The tenant will have to find another rental if he/she cannot buy.

And yes, you are quite right about the risks. Although many can be covered by insurance at a cost. At least I hope so...

suzannecaravaggio · 28/11/2015 17:50

one could argue that the govt has tempted investors into btl and then moved the goal posts
a 'bait and switch' manoeuvre?

specialsubject · 28/11/2015 17:55

I tend to work on this being incompetence rather than malice. As we all know, inflation is not really zero so people need real return on their savings. People cannot always put their entire savings into a pension, so have cash. OK, not everybody has a house's worth of cash but those who do are not happy watching it erode when it is supposed to be there for income - and not just luxuries.

Carney has a lot to answer for with low rates and funding for lending. I wouldn't mind the latter but it is bloody difficult to get a mortgage or funding for a small business!

absolutelynotfabulous · 28/11/2015 17:59

I think it will be a while before the btl market collapses, tbh. There's simply too much at stake. At the end of the day it's all about supply and demand, and affordability of housing ultimately depends on availability. There simply isn't enough housing to meet demand. At least in some areas. In other areas it is possible to buy a property for (comparative) peanuts but these areas are those where wages are low. It's market forces. London prices influence the areas around it. It looks unsustainable, but my guess is that the London market is being propped up by foreign money. As long as this continues, there will be no bursting bubble any time soon.

suzannecaravaggio · 28/11/2015 18:03

I tend to work on this being incompetence rather than malice
perhaps with a dose of unintended/unforeseen consequences thrown in?

Want2bSupermum · 28/11/2015 18:06

Corporate LL are nearly always not as good as private LLs IMO/E. While I'm now corporate all tenants speak to me, the owner, and not someone who is a property manager during 9-5. I manage my properties from 3000 miles away. I have a strong network to deal with all issues including flooding at 3am and a broken boiler on Good Friday morning. Both times I was able to call in favors and get things fixed the same day.

What is extremely wrong are overseas buyers who come in and buy in the UK. Try doing that elsewhere in the world and see how far you get! DH is Danish and we are looking to buy a home for us to use when visiting family. Only because he and the DC are Danish is it possible to do it. We are subject to additional taxes as we don't pay income taxes. It's a fair system. Why should we be able to buy a home in a country we don't pay taxes in. By virtue of having an address in Denmark my kids can go to university in Denmark for free. That costs money which Danes resident in the country shouldn't be shouldering.

suzannecaravaggio · 28/11/2015 18:13

Why should we be able to buy a home in a country we don't pay taxes in

good point and most of us seem to agree that oversea's buyers are problematic?

londonrach · 28/11/2015 18:24

I wish people would stop using the word portfolio. Each house is a home not a portfolio. As a long term renter who was pushed out of the buying market and then the area by the demand for buy to letters markets finally the gov is doing something about it. Everyone you speak to knows somethings needs to be done about the housing market as its out of control. I wish the gov had bought a rent cap in too. By the way we can now finally buy. We have been lucky with landlords but do agree with others that the worse was one lady with just one or two.

FannyTheChampionOfTheWorld · 28/11/2015 18:31

There are private LLs and private LLs want2be. I think the ones people have a problem with are the amateurish sort. The fact that you say properties in the plural sets you apart from some of the worst sort of hobbyists and incompetents.

Want2bSupermum · 28/11/2015 18:38

Fanny I totally agree with you. For me it's a business. If I have tenants moving on after 6 months I know something is wrong and want to know. It's only happened twice in 10 years. I have had as many as 20 properties. I've wound down because I work quite a few hours and have 2DC. If I can't do it properly it's not right to continue.

I also get some darn good return on equity investments that don't take up my time to manage. I've got a couple of positions where I bought at good points and held on. The dividends are excellent and with reinvestment I've built up a substantial investment account over the past 7-8 years.

talkinnpeace · 28/11/2015 18:43

You do all realise that this is Dave and Gideon looking after their big business friends yet again?

The BTL changes will not affect commercial landlords with more than 15 properties

The limit on mortgage deduction against tax does not apply to corporation tax

And they have chosen to still allow London to be the world capital of Money Laundering with LLPs having non UK resident partners.

longtimelurker101 · 28/11/2015 18:59

I'm pretty pleased with the changes, to the person who asked about the difference tax relief on mortgages and capital investment, capital investment is productive, BTL properties are not.

The changes will effect smaller time amateur landlords, the larger ones will still buy property because they are more likely to be cash buyers, and will simply calculate the cost of the increase in stamp duty against projected rises in value.

The small time amateur BTL people will be put out of business, and to be quite frank, if your BTL was only profitable with the tax break then you aren't really in a place to be in the business.

suzannecaravaggio · 28/11/2015 19:03

this is Dave and Gideon looking after their big business friends yet again
surely not!
You cant mean that private individuals looking to fund their retirement (so as not to rely on the state) have bought up and developed properties in good faith only to find that the rules change and they have to sell up cheap so that their property developing efforts have just gone to swell the coffers of big business Shock

but but, we trusted them, nice middle class people trying to make sensible investments
how could those evil fuckers screw us over like that

DeoGratias · 28/11/2015 19:04

There has never since the 1970s been so few homes available to buy in the SE as now today's papers report. My London borough has never ever had as many people living in it either. Stamop duty is not helping. People don't want to move unless they have to as they have to hand the state a small fortune for every move. So you are not getting the churn and turnover of properties as you used to. The new 2014 mortgage lending rules are so tight compared to before that plenty of people would not now get the mortgage they already have on theirh ome so plenty of the changes have made supply of homes worse, not better.

(There will be disclosure of persons of significant control (PSCs) required next year for all limited companies although some people will just lie. It may help transparency at bit)

longtimelurker101 · 28/11/2015 19:14

Ha to middle class people trusting the tories.

I've repeated several times that they are only out to look of for their own kind, if you are mearly middle class, and not significantly wealthy, they will make things worse for you.

FannyTheChampionOfTheWorld · 28/11/2015 19:29

Couldn't agree more with your 18.59 post longtimelurker.

GardeningWithDynamite · 28/11/2015 19:30

I have an inherit to let which pays most of our mortgage. We're not local to it so have it managed by agents. The tax change won't affect me I don't think. If I could I would sell it. Unfortunately we had it on the market a few years ago and had no interest at all. The flat above has just sold after being on the market for about 7 years so maybe there's hope now.

Toadinthehole · 28/11/2015 19:40

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.

Just out of sheer curiosity, is it not possible to sell a tenanted property in the UK?

paramedicswift · 28/11/2015 19:41

People might not like this right now because they're benefiting from the situation.

But we will all look back at this time as the housing crisis and think why the hell did we let this happen and for so long? New families with young children being forced from house to house because of dodgy landlords. Couples who want to buy but are priced out and people who are 'accidental landlords' greedily waiting for prices to rise. How can someone truly be an accidental landlord? It is a conscious decision to hoard housing, a necessity to life. It would be like hoarding food or drugs.

People will start using proper pensions or investments (such as starting businesses or lending to businesses) that do not deprive people of housing and actually do good.

spaceyboo · 28/11/2015 19:43

The policy means I won't ever sell my (poorly performing) BTL so that's one property permanently off the market. I wish they would have given BTL landloards an incentive to sell.

spaceyboo · 28/11/2015 19:47

@paramedicswift - I became a BTL landlord accidentally when I couldn't sell my flat after needing to move to take care of my neice. Rent only covers the mortgage payment -500/mth which is a bargain in the area.

longtimelurker101 · 28/11/2015 19:47

Pah, BTL landlords have been subsidised by the tax breaks for years, why do we need to incentivise selling? You've had years and years of subsidised returns!

spaceyboo · 28/11/2015 19:49

Longtimelurker101 - the whole point is that the government wants BTL properties back on the market. How on earth will this happen if we don't incentivise selling?

talkinnpeace · 28/11/2015 19:56

deogratis
There will be disclosure of persons of significant control (PSCs) required next year for all limited companies although some people will just lie. It may help transparency at bit
But not LLPs
which is where the problem lies

talkinnpeace · 28/11/2015 19:58

spacey
the whole point is that the government wants BTL properties back on the market. How on earth will this happen if we don't incentivise selling?
What on EARTH gives you that idea?

Don't be daft. They want them all handed to their corporate landlord and offshore Chinese mates at fire sale prices