New, extra 3% Stamp Duty on BTL?
Discussion
528Sport said:
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?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.
jdw1234 said:
Won't corporates only be interested at decent yields (i.e. lower than todays asking prices)?
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.
I'll try and answer bothLandlords 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.
Some people buy for yield. Some people but hoping the property rises in value and any yield is a bonus.
Above depends on if your in the business for short or long term gains....
Landlords are providing a service, the service is
providing a house to those who for whatever reason need a home.
At one point the council provided this service but they sold out and opted to outsource to the private sector instead of replacing homes sold under the right to buy scheme. Now there is a social housing shortage and the private landlord is covering the hole.
Look at it like a taxi, you need to get from a2b Should we tax the taxi drivers and encourage private car ownership? Yes? Maybe you can't drive or don't wish to. Should the taxi driver be taxed out of business and if your answer is yes what you gonna do then theirs no taxi?
528Sport said:
jdw1234 said:
Won't corporates only be interested at decent yields (i.e. lower than todays asking prices)?
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.
I'll try and answer bothLandlords 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.
Some people buy for yield. Some people but hoping the property rises in value and any yield is a bonus.
Above depends on if your in the business for short or long term gains....
Landlords are providing a service, the service is
providing a house to those who for whatever reason need a home.
At one point the council provided this service but they sold out and opted to outsource to the private sector instead of replacing homes sold under the right to buy scheme. Now there is a social housing shortage and the private landlord is covering the hole.
Look at it like a taxi, you need to get from a2b Should we tax the taxi drivers and encourage private car ownership? Yes? Maybe you can't drive or don't wish to. Should the taxi driver be taxed out of business and if your answer is yes what you gonna do then theirs no taxi?
;-)
528Sport said:
I'll try and answer both
Some people buy for yield. Some people but hoping the property rises in value and any yield is a bonus.
Above depends on if your in the business for short or long term gains....
Landlords are providing a service, the service is
providing a house to those who for whatever reason need a home.
At one point the council provided this service but they sold out and opted to outsource to the private sector instead of replacing homes sold under the right to buy scheme. Now there is a social housing shortage and the private landlord is covering the hole.
Look at it like a taxi, you need to get from a2b Should we tax the taxi drivers and encourage private car ownership? Yes? Maybe you can't drive or don't wish to. Should the taxi driver be taxed out of business and if your answer is yes what you gonna do then theirs no taxi?
I think you are massively over-estimating the number of people who are renting through choice though. I would argue the majority that are renting would actually rather buy, if the prices at least stabilized, at least sufficient that they could save a deposit.Some people buy for yield. Some people but hoping the property rises in value and any yield is a bonus.
Above depends on if your in the business for short or long term gains....
Landlords are providing a service, the service is
providing a house to those who for whatever reason need a home.
At one point the council provided this service but they sold out and opted to outsource to the private sector instead of replacing homes sold under the right to buy scheme. Now there is a social housing shortage and the private landlord is covering the hole.
Look at it like a taxi, you need to get from a2b Should we tax the taxi drivers and encourage private car ownership? Yes? Maybe you can't drive or don't wish to. Should the taxi driver be taxed out of business and if your answer is yes what you gonna do then theirs no taxi?
Yes there would still be some who would rent out of choice, just like there will still be some landlords staying in the BTL business to service them.
As mentioned elsewhere, the supply of houses is largely fixed. More people being able to buy means there would be a decrease in demand for rental properties. Out of all the people I know who currently rent, I can only think of a single example who are doing so because for reasons other than an inability to buy due to the current housing market problems.
jdw1234 said:
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).
So corporate property investors don't get financing? Are they also "parasitic"? If they are, they've just been dealt a very nice hand by the government which is a clear market distortion in their favour. They now have lower tax rates (SDLT) & cheaper financing (financing allowed as a business cost), when they are already in an advantageous position (due to size & structure) for both.Behemoth said:
jdw1234 said:
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).
So corporate property investors don't get financing? Are they also "parasitic"? If they are, they've just been dealt a very nice hand by the government which is a clear market distortion in their favour. They now have lower tax rates (SDLT) & cheaper financing (financing allowed as a business cost), when they are already in an advantageous position (due to size & structure) for both.Yes they are parasitic unless they "build to let".
Maybe more professionally run? Other people will have more insight here and I can see argument for/against corporate rental sector.
Agree with the your points on market distortion.
Squirrelofwoe said:
528Sport said:
I'll try and answer both
Some people buy for yield. Some people but hoping the property rises in value and any yield is a bonus.
Above depends on if your in the business for short or long term gains....
Landlords are providing a service, the service is
providing a house to those who for whatever reason need a home.
At one point the council provided this service but they sold out and opted to outsource to the private sector instead of replacing homes sold under the right to buy scheme. Now there is a social housing shortage and the private landlord is covering the hole.
Look at it like a taxi, you need to get from a2b Should we tax the taxi drivers and encourage private car ownership? Yes? Maybe you can't drive or don't wish to. Should the taxi driver be taxed out of business and if your answer is yes what you gonna do then theirs no taxi?
I think you are massively over-estimating the number of people who are renting through choice though. I would argue the majority that are renting would actually rather buy, if the prices at least stabilized, at least sufficient that they could save a deposit.Some people buy for yield. Some people but hoping the property rises in value and any yield is a bonus.
Above depends on if your in the business for short or long term gains....
Landlords are providing a service, the service is
providing a house to those who for whatever reason need a home.
At one point the council provided this service but they sold out and opted to outsource to the private sector instead of replacing homes sold under the right to buy scheme. Now there is a social housing shortage and the private landlord is covering the hole.
Look at it like a taxi, you need to get from a2b Should we tax the taxi drivers and encourage private car ownership? Yes? Maybe you can't drive or don't wish to. Should the taxi driver be taxed out of business and if your answer is yes what you gonna do then theirs no taxi?
Yes there would still be some who would rent out of choice, just like there will still be some landlords staying in the BTL business to service them.
As mentioned elsewhere, the supply of houses is largely fixed. More people being able to buy means there would be a decrease in demand for rental properties. Out of all the people I know who currently rent, I can only think of a single example who are doing so because for reasons other than an inability to buy due to the current housing market problems.
I totally agree there's alot of people who want to buy I DO. But I can't, I'm self employed, I've got a big deposit (upto 40% of purchase price) but can't get a mortgage because of affordability rules and being self employed I'm stuck by the system the banks and government have created.
Now if i want a BTL mortgage that's not a problem, and that cant be right.
I NEED to rent I've no choice at all.
Lets say the affordability rules changed and became relaxed to pre 2007 rules, property prices would go up
because all of a sudden there'd be a load of renters who would buy, simple supply and demand logic. Great?
The problem is very complex and can't be fixed by simply taxing a few.
All I know is this increase wont fix the problems in the housing market. Its just too complex
Edited by 528Sport on Friday 27th November 14:16
jdw1234 said:
Maybe more professionally run? Other people will have more insight here and I can see argument for/against corporate rental sector.
The difference in approach is analogous to the supermarket vs small corner shop / independent chain. Or the smaller retailer on the High St vs the Amazon behemoth. Price & service quality will be different but by no means fall in favour of corporate ownership. There will be bad suppliers, expensive suppliers & good value ones. Just as there are with private landlords. This is my experience when living in Germany.
One thing is for sure - a healthier market is one where there is fair competition amongst all competing suppliers.
Behemoth said:
jdw1234 said:
Maybe more professionally run? Other people will have more insight here and I can see argument for/against corporate rental sector.
The difference in approach is analogous to the supermarket vs small corner shop / independent chain. Or the smaller retailer on the High St vs the Amazon behemoth. Price & service quality will be different but by no means fall in favour of corporate ownership. There will be bad suppliers, expensive suppliers & good value ones. Just as there are with private landlords. This is my experience when living in Germany.
One thing is for sure - a healthier market is one where there is fair competition amongst all competing suppliers.
jdw1234 said:
analogous to your mate Dave down the pub decorating/fixing your house rather than a professional. Reading landlord forums shows a scary amount of regulatory non-compliance, reluctance/lack of cash to adequately maintain
There are cowboys in every industry but you shouldn't tar everyone with the same brush.Reading internet forums about plumbing, building & joinery jobs scares the bejeezus out of me and these are also supposedly regulated environments. But then so is banking and look what happened there with Libor & sub prime.
Corporatisation and implementing anti competitive barriers to entry is not the answer to these issues. Effective regulatory control is.
Am reading this and similar threads with interest.
I'm going through all the possible ramifications of this and the mortgage rate relief issue and my peanut size brain is struggling. Something not picked up on is, when the SDLT rules kick in and the rate relief begins to be tapered in from 2017/18 does this mean that those struggling to get on the ladder will suddenly be able to stump up the chunk required for a deposit, wherever it may be in the UK, and get mortgage.
No.
How happy are we as taxpayers to be subsidising the help to buy scheme currently at 40% and no doubt will increase, has this scheme really solved or massively changed the housing market. No. Also, are people going onto or qualifying for this scheme now going to meet the criteria for a residential mortgage or find the money for a deposit. Again, no.
I agree with some other comments, no doubt the hawkes in the forms of large investment companies are circling looking to mop up properties owned by private landlord for whom the BTL portfolio now becomes unviable. So where do all the tenants now go, be them private or council tenants the Local Authorities can't wave a magic wand and make new properties appear. The councils will be forced to the investment companies and guess what, the rent has just gone up by XX %.
Could a side effect of this whole issue be that Local Authority's will now have to pay out an awful lot more in housing benefit, therefore costing Mr Osbourne in the long run?
But it's all ok because the Chinese Billionaire now has a 10K plus bill on his second home in London.
These new rules have not been thought about properly and could have some serious repercussions for the housing market and economy as a whole.
Even my peanut size brain can work that out.
I'm going through all the possible ramifications of this and the mortgage rate relief issue and my peanut size brain is struggling. Something not picked up on is, when the SDLT rules kick in and the rate relief begins to be tapered in from 2017/18 does this mean that those struggling to get on the ladder will suddenly be able to stump up the chunk required for a deposit, wherever it may be in the UK, and get mortgage.
No.
How happy are we as taxpayers to be subsidising the help to buy scheme currently at 40% and no doubt will increase, has this scheme really solved or massively changed the housing market. No. Also, are people going onto or qualifying for this scheme now going to meet the criteria for a residential mortgage or find the money for a deposit. Again, no.
I agree with some other comments, no doubt the hawkes in the forms of large investment companies are circling looking to mop up properties owned by private landlord for whom the BTL portfolio now becomes unviable. So where do all the tenants now go, be them private or council tenants the Local Authorities can't wave a magic wand and make new properties appear. The councils will be forced to the investment companies and guess what, the rent has just gone up by XX %.
Could a side effect of this whole issue be that Local Authority's will now have to pay out an awful lot more in housing benefit, therefore costing Mr Osbourne in the long run?
But it's all ok because the Chinese Billionaire now has a 10K plus bill on his second home in London.
These new rules have not been thought about properly and could have some serious repercussions for the housing market and economy as a whole.
Even my peanut size brain can work that out.
Muffster said:
How happy are we as taxpayers to be subsidising the help to buy scheme currently at 40% and no doubt will increase, has this scheme really solved or massively changed the housing market.
I'd rather be giving "one off" assistance to homebuyers than building council houses which people move into for life at subsidised rents with all the maintenance obligations falling on taxpayers as well. Council housing is IMO a complete disaster which, amongst other things, enables people without jobs to live in areas that people with jobs can't afford. Now that really is perverse.The housing market in UK isn't going to change any time soon with net immigration at 300,000+ per year and house building at only 200,000 per year. Remember those immigration figures ignore population growth among people who are already here so in reality the gap/shortage is even more extreme.
Syrian refugee? In you come - there's plenty of room....
That is a really good comment about the through life cost of a council tenant/house.
The point I tried to put across is the much trumpeted scheme is not a golden solution.
I was going to leave the immigration issue aside in this topic, lots of other threads and a huge can or worms etc. But there can be no doubt vast amounts of extra people in the country over the last 15 years has to have an knock on effect.
The point I tried to put across is the much trumpeted scheme is not a golden solution.
I was going to leave the immigration issue aside in this topic, lots of other threads and a huge can or worms etc. But there can be no doubt vast amounts of extra people in the country over the last 15 years has to have an knock on effect.
None of these tax changes have done anything to help the first time buyer struggling to raise a deposit. Very little property will be released onto the market and it won't suddenly be at an affordable cost.
With the market distortion the chancellor introduced, corporate investors are being shown a wide open door. These guys are in it for both income and capital growth, to a much more ruthless extent than any private landlord.
Why do you think Merkel is letting vast numbers in? It isn't altruism and guilt. She has great foresight. Immigration is needed to pay for a rapidly ageing population.
With the market distortion the chancellor introduced, corporate investors are being shown a wide open door. These guys are in it for both income and capital growth, to a much more ruthless extent than any private landlord.
Why do you think Merkel is letting vast numbers in? It isn't altruism and guilt. She has great foresight. Immigration is needed to pay for a rapidly ageing population.
Behemoth said:
None of these tax changes have done anything to help the first time buyer struggling to raise a deposit. Very little property will be released onto the market and it won't suddenly be at an affordable cost.
It's not about "suddenly". It's about two things - changing attitude
raising some dosh
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