rents will soon be rising and the poor will suffer

[bil66]

There is a new tax coming out called section 24 which the Government does not want you to know about.

The tax will put up the cost of renting properties dramatically and this in turn means that landlords will not be able to rent to people on low income.

Finding a property for people on low income is already very difficult but its about to get much worse.

Action needs to be taken to stop this tax and complaints should be made to your local council and MP.

blaake - BTL is buying a property to let out, how you finance it is up to you. You bought properties to let out, so you are what you are purporting to slag off which made no sense - although I appreciate what you actually meant is those with mortgages. But that makes no sense either.

To say ALL landlords with a mortgage are cowboys etc is just silly - if you have any facts or figures to support that sweeping statement I'd be like to see them.

Without the financial constraints of a mortgage, or the time it takes to arrange one, it would have been even easier to have outbid FTB's on those 40 properties (which, reading comments, is a big concern on here.)

BTW I have half and half, some with, some without mortgages, does that make me half a cowboy? Do you think I treat my tenants any differently?

There are some shocking landlords out there, the depth of dislike on here is testament to that, but to tar a particular section is too simplistic. If we applied the 'corporate' is best rule, there would be no local independent shops, or cafes, there would only be the like of Tescos and Starbucks.

Put the Choc - totally agree.

I can't help thinking the housing issue has come about because of four year governments
House ownership declining = thatcher sells off council houses
Not enough social housing = use your housing benefit on private rentals
Rent too high = take money out your pension and invest in property
Too many landlords not enough buyers = close the tax loop

Its all fire fighting causing long term issues.

@Bil66... Do you really think a forum predominantly made up of mothers will ever have a majority who want their kids to grow up into a world where instead of being able to acquire a secure home through purchase or social housing, they are beholden to the likes of you? Signing up every 6 months to stay in your magnolia walled slave box whilst you sit in Thailand sipping Chang and whatever sordid exploitative activities mean 'living like a king' to you (I suspect we know) from the fruits of other people's endeavours?

The hubris was astounding but I suggest you stop digging.

If you reject what I have said that is up to you.I don't care.

As for Thailand it is not the preserve of the rich.

Even the poorest people from the west go there and have a good life.

I have travelled all over Thailand, I know the country, so I know why western male early retirees outnumber women significantly.

I also understand the property market amd economy. You are not posting here out of the goodness of your heart, but out of self interest to preserve your tax break that section 24 partly removes. With house building high on the political agenda, prices falling 3.1% in April, 50% of private rental completely unmortgaged, and wage growth behind inflation your scaremongering on rent rises is hollow.

@dazedandconfused18 if you have half of your properties with mortgages you will know that you are unable to offer longer term tenancies due to mortgage constraints. However, my 'target' so to speak was not professional landlords like you (I assume) or I, it was cowboys who have 1 or 2 properties as 'investments' who haven't a bloody clue, generally have mortgages so less of a profit margin, making them raise rents to unjust levels. These types are also the most likely to have their houses repossessed (which I have witnessed quite a lot over the years and, bluntly, taken advantage of) leaving tenants homeless. Surely, if you are the type of landlord you portray yourself to be, you would agree? No?

I have travelled all over Thailand, I know the country, so I know why western male early retirees outnumber women significantly
I shudder to think about what bil66's ambition to live like a king in Thailand will actually entail

You really are pathetic

You look for the bad in every sentence

Just to make it clear The tax changes do not really have any impact because I'm not a small landlord and can therefore incorporate and pay a tax rate of just 17 per cent

The tax changes affect the small landlord with 1 or 2 properties as they will have to pay cgt and stamp duty if they choose to incorporate This means their future pension is probably wiped out I know many of you will find that amusing but I don't .

This tax change affects the poorest landlords with mortgages It has very little affect on the big landlords

.

Then they shouldn't have decided to be landlords on a whim

Let's imagine that you struggle to get on the property ladder but by the age of 45 you manage to do it.

10 years later your property has doubled in value so you remortgage it to buy a second property for your child or as a pension for the future.

Another 5 years go by and you are still heavily mortgaged.Then George Osborne the Chancellor comes along changes the tax laws so you have to sell it. You now have to pay capital gains tax on any gain and your pension or property for your child has been taken from you.

How would you feel??

This person is making provisions for their future by not relying on the state.They are not wealthy.It could be any one of YOU?

blaake, no I don't personally recognise that it in the small LL's I know. That isn't to say those 'types' don't exist. My experience is valid (as is yours) but I don't present mine as fact or true of the whole country. Or believe I am superior to others in the market.

I totally agree that LL's who are financially prudent and provide a professional service are what is needed, but I think they come in all shapes, sizes and structures. As with all industries there are pros and cons of small independents versus large companies and unscrupulous and incompetent individuals operate in every scenario. Think about the tragedy of Grenfell.

It is also unfair to penalise small LL's with mortgages whilst allowing LL's set up as a company to keep the tax benefit - and opening the door for already wealthy people to clean up on repossessed stock (as you said you do).

Small landlords I know make sure they do have a clue what they're doing, let's be honest it's not that tricky. If they don't have a clue, or more usually don't have the time because of their professions, they use a letting agent.

Where we live (SW) there is good rental demand, but also reasonable supply - drastically increasing rents as you please is not going to work. Where are these places where LL's can raise rents to 'unjust levels' as and when they feel like it?!?

Cry me a river. If they wanted a pension they should've invested in one, rather than becoming a landlord and being unable to afford it.

But they could afford it until George Osborne the Chancellor changed the tax system to confiscate the property

If the btl market needs to slow down that is fair enough but the tax changes should apply to future purchases and not to purchases that were made 10 years ago.Applying the tax laws in this way is wrong.

These people are not rich

I do not understand people's hostility.

Normal pensions have failed so people have switched to property to help fund their retirement.

Those that saw house prices doubled in 10 then thought I'll buy a house as a pension , must be incredibly niave to think the tax landscape wouldn't change. Would you bet your future pension on what a government might do or not do. If it didn't strike them as a risky bet and they might loose out then no I would have no sympathy.

Small LLs who have not stupidly over-leveraged themselves will be able to manage.

Those who have mortgaged themselves to the hilt, while relying on very low interest rates and taxpayer subsidies, very likely won't.

Heavily leveraged BTL was always going to be risky, though when house prices were endlessly shooting up, and while interest rates have been so low, many have chosen to close their eyes to the risks.

I have read more than once of small LLs who, after attending some 'get rich quick!' seminar run by a 'property expert' aka spiv, have foolishly been suckered into over-leveraging themselves to buy a property they haven't even seen, in an area they don't know, and without having done any research of their own into local prices/rental demand or values.

I can't summon up much sympathy for those, any more than I can sympathise with those who put all their eggs into any other over-hyped 'investment' basket, which then fails.

The investment fails because of the policy of the government and not for any other reason.

For those that invested 10 years ago, s.24 should not apply to them. If you must apply s.24 it should only apply to future purchases so people know where they stand.

To me this is a tax on relatively poor people trying to secure their future.

There has been people on this thread that have just one property and will now need to sell.

I wouldn't cry a river either, but I would have some sympathy, I don't knock those that inherit a secure future (lucky buggers!) but I know what it's like to try and create one for myself.

Bil I'd give up, looking for sympathy here is like looking for Quorn in a butchers. And not without reason, there's an article on bbc website about the rise of tenants to private LL's - particularly families with kids. However good a PLL is we can't guarantee the same longevity of tenure as council/HA and I know I would hate to have to move my kids from their school/friends. For this any other reasons there is a lot of bad feeling, few things are more emotive than your home.

I'm not blaming private LL's, that would be like blaming a toddler for having a diet of sweets. It's been driven by govt policy.

The reality is unless you want to have any spare cash earning bugger all in an interest account and going backwards in real terms, you have to invest in something. But any adult knows, policies changes, tax levels change, interest rates change, house prices go up and down, the stock market rises and falls - you have to take a long hard look at the best and worst case scenarios and decide if you wish to take an educated gamble. If the gamble doesn't pay off, you have to take that on the chin.

bil s24 by definition only affects people who will be taken into higher rate tax by the change. They are not "relatively" poor.

Basic rate tax payers are being dragged into the higher bracket because the mortgage costs now count as taxable income.This will prevent people being entitled to child benefit etc.

Average FT UK salaries are around £30k. This means you would need £15k rental income after allowable expenses before s24 has an effect. Outside of London that is unlikely on a single investment property rented out to a low paid renter. Even in London it is a stretch.

So the small landlord is immune from s.24 according to your figures and there is no need for them to sell up

Yes in the case of the "relatively poor ones" referred to in your earlier post bil. AFAIK this change mainly affects highly paid city types with a hobby btl on the side mainly in the overinflated priced areas of the country.

Bil I like your example of the economics teacher.
I think we have pretty much reached that in our country now.
And if things don't change it will get worse.
I do think there is change in the air.
Property prices are beginning to fall.
Benefits are being pulled back.
It couldn't all go on for ever

The investment fails because of the policy of the government and not for any other reason.

You're so right @bil66, it's never been the fault of the banks selling fraudulently or their other crookery.