New, extra 3% Stamp Duty on BTL?

New, extra 3% Stamp Duty on BTL?

Author
Discussion

Shaoxter

4,048 posts

123 months

Friday 27th November 2015
quotequote all
Eric Mc said:
528Sport said:
No its called looking after your family and securing your future
Absolutely - but it is, at heart, a very, very selfish view on life and essentially tribal i.e only the immediate clan matters.

I would like to think that modern society has moved away from only wanting to care for the well being of blood relatives.
So by your moral standards we should all be giving up our jobs and possessions and go to help the kids in Africa.

Being selfish and only caring about yourself and relatives/friends is what capitalism is all about.

poocherama

396 posts

208 months

Friday 27th November 2015
quotequote all
Eric Mc said:
Essentially, what you are saying is, as long as a person is satisfying their own personal wants and desires - everybody else can go hang.

The classic "I'm all right, Jack" world view.
I never can understand this. What on earth is wrong with prioritizing the well being of ones family over that of perfect strangers? Who honestly looks at their own circumstances and that of their children, then makes a decision based on the perceived well being of the rest of the population. I'd be interested in examples that aren't pure virtue signaling.

I'm also having difficulty understanding the animosity shown to small landlords. In virtually every other industry small and local is touted as preferable to some faceless corporate, why does this not apply to housing? My dealings with large landlords have been a nightmare. The association I'm dealing with at the moment has 16,000 properties and apparently about two surveyors on the books. Its taken months to arrange a meeting. Had I been dealing with a small landlord chances are he'd be a tad more responsive.

528Sport

1,431 posts

233 months

Friday 27th November 2015
quotequote all
Eric Mc said:
528Sport said:
No its called looking after your family and securing your future
Absolutely - but it is, at heart, a very, very selfish view on life and essentially tribal i.e only the immediate clan matters.

I would like to think that modern society has moved away from only wanting to care for the well being of blood relatives.
I'd like to think so but it hasn't...
:-)
why is it ok for corporate to provide BTL properties then?

Its like saying the guy who runs the corner shop should close down or be taxed out of business and allow Tesco to take over.

I see the future being large BTL companies spring up make a shed load of cash, provide VERY poor service and move the company off shore to protect against corporation tax. That way their will be a bigger housing issue and less £££ for HMRC.

Lets see how this pans out.

Did you know a lot of home builders will give very healthy discounts to investors? I was offered a 25% discount on some new build houses last year. I was specifically asked NOT to discuss this with site sales staff as the max discount they can give (if I remeber correctly) was 5-8%.







Behemoth

2,105 posts

130 months

Friday 27th November 2015
quotequote all
528Sport said:
Last night I saw a classic post "we have a client who wishes to purchase 50+ properties in the north, 70K-130k min yield of 7%" there are regular requests like this on a weekly basis.
Those are the people who need stopping or taxing, not your average "joe" who just wants a secure income.
Spot on. This is scary stuff.

Osborne is supporting his city cronies who have seen their opportunity and done their lobbying. Over the next decade or two, the private rental sector will be corporatised. Profits will disappear into elaborate multinational tax avoidance schemes and rents will go up.

The Victorian three bed terraced house you need to lease for a few years whilst you raise the deposit to buy a house will be an asset held by a multinational head-quartered in Luxembourg. It will be ruthlessly run by managing agents with their own high profit margins who will squeeze every last penny possible from the onerous contracts they impose.

528Sport

1,431 posts

233 months

Friday 27th November 2015
quotequote all
poocherama said:
Eric Mc said:
Essentially, what you are saying is, as long as a person is satisfying their own personal wants and desires - everybody else can go hang.

The classic "I'm all right, Jack" world view.
I never can understand this. What on earth is wrong with prioritizing the well being of ones family over that of perfect strangers? Who honestly looks at their own circumstances and that of their children, then makes a decision based on the perceived well being of the rest of the population. I'd be interested in examples that aren't pure virtue signaling.

I'm also having difficulty understanding the animosity shown to small landlords. In virtually every other industry small and local is touted as preferable to some faceless corporate, why does this not apply to housing? My dealings with large landlords have been a nightmare. The association I'm dealing with at the moment has 16,000 properties and apparently about two surveyors on the books. Its taken months to arrange a meeting. Had I been dealing with a small landlord chances are he'd be a tad more responsive.
I'm dealing with a very large Home Group :-) over the purchase of my mothers house. My mum owns 25% share and wants to buy the rest (she has the right and its in the contract) HomeGroup are standing in our way whereveer possible to hold this up, been ongoing since feb 2015. There is no discount being offered at all.
If my mum rented from homegroup fully (ie no share) she'd be entitled to upto 60% discount for being a long term tennant.
Very unfair system but hey its large corp and thats what you get.



Squirrelofwoe

3,181 posts

175 months

Friday 27th November 2015
quotequote all
poocherama said:
I'm also having difficulty understanding the animosity shown to small landlords. In virtually every other industry small and local is touted as preferable to some faceless corporate, why does this not apply to housing?
This issue isn't with how they behave as landlords- I'm sure most of them are fine. It's simply that there are so many of them, and they are competing with first time buyers to purchase houses from a limited amount of stock.

This is putting prices up beyond the reach of those who don't already own property- all the while charging rent that prevents those tenants from saving up a deposit at a rate that keeps pace with the ever increasing prices.

I know that the big corporate ones need to be targeted as well, but to think that they are the only ones causing the problem is a bit naive- it's hardly like we are talking about a handful of small private BTL owners across the country. The sheer amount of publicity this news has generated gives an idea to the number of private BTL owners out there, and so as a collective they are as much a viable target as the big corporate landlords. It's not about who owns the BTLs, its about the number of houses owned as BTLs full stop.

As mentioned earlier, I have been saving on average just over £1,000/month for the last 18 months and I am now actually further away from having the deposit I require than I was when I started saving!

Edited by Squirrelofwoe on Friday 27th November 12:12

Eric Mc

121,779 posts

264 months

Friday 27th November 2015
quotequote all
Shaoxter said:
Eric Mc said:
528Sport said:
No its called looking after your family and securing your future
Absolutely - but it is, at heart, a very, very selfish view on life and essentially tribal i.e only the immediate clan matters.

I would like to think that modern society has moved away from only wanting to care for the well being of blood relatives.
So by your moral standards we should all be giving up our jobs and possessions and go to help the kids in Africa.

Being selfish and only caring about yourself and relatives/friends is what capitalism is all about.
Only if you want it to be that way. It's not a "natural law".

Squirrelofwoe

3,181 posts

175 months

Friday 27th November 2015
quotequote all


This issue isn't with how they behave as landlords- I'm sure most of them are fine. It's simply that there are so many of them, and they are competing with first time buyers to purchase houses from a limited amount of stock.

This is putting prices up beyond the reach of those who don't already own property- all the while charging rent that prevents those tenants from saving up a deposit at a rate that keeps pace with the ever increasing prices.

I know that the big corporate ones need to be targeted as well, but to think that they are the only ones causing the problem is a bit naive- it's hardly like we are talking about a handful of small private BTL owners across the country. The sheer amount of publicity this news has generated gives an idea to the number of private BTL owners out there, and so as a collective they are as much a viable target as the big corporate landlords. It's not about who owns the BTLs, its about the number of houses owned as BTLs full stop.

As mentioned earlier, I have been saving on average just over £1,000/month for the last 18 months and I am now actually further away from having the deposit I require than I was when I started saving!

poocherama

396 posts

208 months

Friday 27th November 2015
quotequote all
Squirrelofwoe said:
poocherama said:
I'm also having difficulty understanding the animosity shown to small landlords. In virtually every other industry small and local is touted as preferable to some faceless corporate, why does this not apply to housing?
This issue isn't with how they behave as landlords- I'm sure most of them are fine. It's simply that there are so many of them, and they are competing with first time buyers to purchase houses from a limited amount of stock.

This is putting prices up beyond the reach of those who don't already own property- all the while charging rent that prevents those tenants from saving up a deposit at a rate that keeps pace with the ever increasing prices.

As mentioned earlier, I have been saving on average just over £1,000/month for the last 18 months and I am now actually further away from having the deposit I require than I was when I started saving!
Sure, I get that. However as mentioned above, small landlords driven out of the market by gov't policy will quickly be replaced by large corporates, I've plenty of friends working with investors doing just this. You'll still be saving for a deposit but paying rent to a company with a 100,000 houses on the books and 'customer satisfaction' low down on their list of priorities.

Eric Mc

121,779 posts

264 months

Friday 27th November 2015
quotequote all
poocherama said:
I never can understand this. What on earth is wrong with prioritizing the well being of ones family over that of perfect strangers? Who honestly looks at their own circumstances and that of their children, then makes a decision based on the perceived well being of the rest of the population. I'd be interested in examples that aren't pure virtue signaling.
At least you are admitting to being concerned about the "rest of the population". I'm not saying people shouldn't look after their families or next of kin. But they shouldn't exclude the rest of society either in their thinking.

After all, what is it that binds us together as people and a nation?


Squirrelofwoe

3,181 posts

175 months

Friday 27th November 2015
quotequote all
poocherama said:
Sure, I get that. However as mentioned above, small landlords driven out of the market by gov't policy will quickly be replaced by large corporates, I've plenty of friends working with investors doing just this. You'll still be saving for a deposit but paying rent to a company with a 100,000 houses on the books and 'customer satisfaction' low down on their list of priorities.
Indeed, and those corporates need to be targeted too. But I would rather the government be doing something, rather than simply leaving it as it is. If it was a choice between them targeting the private BTL owners or nobody, I would chose this option all day long.

poocherama

396 posts

208 months

Friday 27th November 2015
quotequote all
Eric Mc said:
At least you are admitting to being concerned about the "rest of the population". I'm not saying people shouldn't look after their families or next of kin. But they shouldn't exclude the rest of society either in their thinking.

After all, what is it that binds us together as people and a nation?
OK, but who does this? Who actually changes their behaviour on the basis of what benefits the rest of society?

Edited to add without coercion from gov't!

Edited by poocherama on Friday 27th November 12:23

poocherama

396 posts

208 months

Friday 27th November 2015
quotequote all
Squirrelofwoe said:
poocherama said:
Sure, I get that. However as mentioned above, small landlords driven out of the market by gov't policy will quickly be replaced by large corporates, I've plenty of friends working with investors doing just this. You'll still be saving for a deposit but paying rent to a company with a 100,000 houses on the books and 'customer satisfaction' low down on their list of priorities.
Indeed, and those corporates need to be targeted too. But I would rather the government be doing something, rather than simply leaving it as it is. If it was a choice between them targeting the private BTL owners or nobody, I would chose this option all day long.
And that there is the rub. Property investors aren't going away. If you don't target ALL the investors you're simply replacing one problem with another. Ultimately the situation remains unchanged.

Eric Mc

121,779 posts

264 months

Friday 27th November 2015
quotequote all
Many do. We don't all live in selfish bubbles.

Education is where altruistic thoughts come from - both at home and in school. For 40 odd years the emphasis in the UK has been to encourage a very "selfish" approach to life. Other countries don't adopt such an attitude - the Scandinavian countries being prime examples.

There is no law of nature saying that humans have to only look after No. 1 all the time.

Squirrelofwoe

3,181 posts

175 months

Friday 27th November 2015
quotequote all
poocherama said:
And that there is the rub. Property investors aren't going away. If you don't target ALL the investors you're simply replacing one problem with another. Ultimately the situation remains unchanged.
Perhaps, but I refuse to believe that EVERY house that a private BTL landlord sells will end up in the hands of a corporate landlord.

There are significantly fewer potential corporate landlord buyers out there than there are private ones, particularly those with the buying power to have a significant impact on the market should a large amount of previously owned BTLs become available as a result of these changes.

Yes some of them will undoubtedly get hoovered up, but not all. And it's also more about the change of mindset- making property a less attractive investment vehicle for the average joe looking to setup a retirement fund. It might take a while to filter down, and ultimately probably won't happen soon enough to help me- but it should hopefully have a positive impact for future generations of first time buyers.

wisbech

2,939 posts

120 months

Friday 27th November 2015
quotequote all
In my experience, renting from corporates is far far better than renting from small time landlords. So much so that now I'll only rent from a proper company. They know the rules, stick to them, and have professional managers who will replace (say) a faulty washing machine within a day. Plus they'll be declaring income properly, don't hold grudges or act irrationally. In Germany most rental property is held by pension funds, and I guess UK will go same way (as they have tax advantages over other corporates)


oyster

12,577 posts

247 months

Friday 27th November 2015
quotequote all
onedsla said:
Coupled with the April changes, this sounds like a good way to push up rent, making it even harder for first time buyers to build deposits.
How can this possibly push up rent?

jdw1234

6,021 posts

214 months

Friday 27th November 2015
quotequote all
Won't corporates only be interested at decent yields (i.e. lower than todays asking prices)?

I don't understand the mechanism where rental supply gets reduced. The house isn't destroyed - it is either sold to an owner occupy (reducing rental demand at the same time) or a landlord at a price where the numbers work (i.e. current landlord takes a hit).

I also don't understand why people expect:

1). Rent to go up.
If landlords can just increase rent (normal market forces don't apply apparently), why not just increase it to £1m per week to cover yourself.

2). A flood of people trying to buy BTL property before the new stamp duty regs come in.
This is just an idiotic assumption. Why would someone rush to buy something which is about to become less attractive and probably cheaper?
I expect you will see a flood of people trying to sell rather than rushing to buy!

People also need to differentiate between property management (a value add service) with acquiring a leveraged BTL portfolio (a parasitic misallocation of capital that would be better invested in the productive economy). Landlords who claim they are "providing a service" are normally referring to their property management activities. Unless they are involved in building I cant see how they are "providing homes" given they already exist.




528Sport

1,431 posts

233 months

Friday 27th November 2015
quotequote all
Squirrelofwoe said:
poocherama said:
And that there is the rub. Property investors aren't going away. If you don't target ALL the investors you're simply replacing one problem with another. Ultimately the situation remains unchanged.
Perhaps, but I refuse to believe that EVERY house that a private BTL landlord sells will end up in the hands of a corporate landlord.
If you do some property training or maybe go to some PIN (property investment meetings)
you'd be surprised what goes on.
I mentioned earlier about deal sources. These are specific people who source properties for investors and make a bloody good living out of it.
The future looks to me like this: (Bear in mind i've done the training and attend meetings)

Small landlord gets forced out the market due to new tax rules.
Makes less profit (that's why he's in business to earn a living)
Deal sourcing agents hear of "Joe" with 10 properties he wants to sell and make him an offer. Deal agent sells deal on to bigger landlords for a fee.
Result is the housing stock gets sold to a corp and hey no stamp duty paid (or very little) paid under new rules.
Housing stock never even enters an estate agents window resulting in less properties on the market.

I know 2 deal sourcing agents in the northeast who regularly show "London" investors round. They fly up north and buy cheap often 10, 20, 30+ houses at a time and fly back to london.

Small landlords will simply be replaced by the big boys. It will and is happening.

The more houses that go to big corps will result in less business for local estate/lettings managment agents.

The only way to fix the issue is regulate how many properties 1 landlord can own and make it easier to get mortgages to buy your own home.

One other thing that could help... Force by law ALL houses to be advertised when for sale.


I see in a few years time we will be crying out for landlords to "come back to the market" as their wont be enough competition and renters wont want to deal with the big boys because the service is poor.


I've done the training I can see what happening and on the private forums and facebook pages im a member off I read about it all the time.


In all honesty the whole BTL market needs looking at to find out:

Why people need/wish to rent (there are very good reasons)
Why people can't buy (fix those issues)
Help landlords get rid of bad tennants (its VERY VERY hard)
Build more houses and help people first time buying onto the ladder.
Stop property going up in value as quick unless you can prove youve added value to your house (extra bedroom ect ect)

Dont just tax the small guys it wont help at all







528Sport

1,431 posts

233 months

Friday 27th November 2015
quotequote all
oyster said:
onedsla said:
Coupled with the April changes, this sounds like a good way to push up rent, making it even harder for first time buyers to build deposits.
How can this possibly push up rent?
Ok what happened when fuel costs (and taxes) went up? Supermarkets charged more for the products on the shelves, electricians, plumbers ect ect charged more.

The property market is exactly the same

A landlord is a business, his/her mortgage, insurance, managment and other costs come off the rent you pay.
When the margin goes down the costs somewhere have to go up..
Simple business.