The future for the small BTL investor
Discussion
pbg2770 said:
Eric Mc said:
Thread No. 5 on this topic I think.
Why does it matter how many threads there are? Are you the Capacity and Storage manager for Haymarket?It just gets difficult to monitor the questions being raised and the answers being given when there are two or more threads running on the same subject - and you get lots of repeat questions and duplication.
I wish they had a thread merge facility on PH as it would bring multiple threads on the same subject together.
Kendrik said:
Whilst a corporate will have some tax advantages, I don't think they have been staying away because they are unable to compete. And a non UK company will still pay tax in the UK....
3% advantage on purchase and the ability to set off finance costs against profits doesn't sound like a "small" advantage to me. If a multinational had that and their competitors didn't, they would wipe the floor with them.Sure, non UK companies pay tax
Any sizeable multinational ensures their tax burden is limited by shifting funds and cross charging to low tax regimes.mph1977 said:
making it less attractive for the amateur property tycoon and the pointed toed brown shoed 'letting agents ' ...
despite the fact that some powerfully built PHer will be along to claim they do it out of the goodness of their heart ...
Someone had to say it, and agree entirely. despite the fact that some powerfully built PHer will be along to claim they do it out of the goodness of their heart ...
A few aspirational 'Candy' dreamers already have, desperate attempts at justification that tend to expose far more than perhaps they realise.
Eric seems to have their measure, which is good to see. I'm fully behind this, should have happened a long time ago.
I'm not down on those who want to buy properties for letting at all. What I do find rather hard to fathom are those who -
a) think they are doing society a favour by buying up properties
b) think they are engaged in an effective pension strategy
c) pretend that they are NOT engaged in a form of speculation
a) think they are doing society a favour by buying up properties
b) think they are engaged in an effective pension strategy
c) pretend that they are NOT engaged in a form of speculation
Eric Mc said:
I'm not down on those who want to buy properties for letting at all. What I do find rather hard to fathom are those who -
a) think they are doing society a favour by buying up properties
b) think they are engaged in an effective pension strategy
c) pretend that they are NOT engaged in a form of speculation
None of the above applies to me - it's simply a side business and one that will be affected by these changes; like anything the government does; those unaffected won't be bothered and may even applaud certain moves - whilst those affected will be frustrated at having their mojo messed with. BTL is great when done properly; my partner has just one BTL and hers is in central London; she bought 10 years ago at 350,000 and it's just been valued at over a million - she doesn't think for a second she's doing society a service (who thinks that!?) and of course it's a form of speculation... with informed decisions; speculation that can pay handsomely.a) think they are doing society a favour by buying up properties
b) think they are engaged in an effective pension strategy
c) pretend that they are NOT engaged in a form of speculation
Having read this thread, I can see some of the argument for the changes - but I don't like it - and personally, I'll simply find a way to mininise the effect. The chess game of tax tactics will just get a little harder.
Eric Mc said:
I'm not down on those who want to buy properties for letting at all. What I do find rather hard to fathom are those who -
a) think they are doing society a favour by buying up properties
b) think they are engaged in an effective pension strategy
c) pretend that they are NOT engaged in a form of speculation
Same, free market etc. My views may also be influenced by those BTLL with whom I have had the misfortune to have met over the years. 'Warm' doesn't come close, particularly their relationships with local estate agents and jobbing builder pseudo property developer wannabes. a) think they are doing society a favour by buying up properties
b) think they are engaged in an effective pension strategy
c) pretend that they are NOT engaged in a form of speculation
I would never classify buy to let owners as being particularly nasty. I've known hundreds (as a tenant and as clients) over the years and their personalities reflect a cross section of humanity. Some are decent - some are not.
I certainly wouldn't tar them all with the same brush.
However. I do think that over the past few decades taxation policy has, on the whole, been fairly kind to those who chose to "invest" in land and property - and not so kind to those who chose to invest in industry or commerce.
A rebalancing of the tax environment has long been overdue.
Also. culturally, the UK population has become rather fixated with property ownership as a symbol of "capitalist entrepreneurship" - which I actually don't think it always is.
I certainly wouldn't tar them all with the same brush.
However. I do think that over the past few decades taxation policy has, on the whole, been fairly kind to those who chose to "invest" in land and property - and not so kind to those who chose to invest in industry or commerce.
A rebalancing of the tax environment has long been overdue.
Also. culturally, the UK population has become rather fixated with property ownership as a symbol of "capitalist entrepreneurship" - which I actually don't think it always is.
Eric Mc said:
I would never classify buy to let owners as being particularly nasty. I've known hundreds (as a tenant and as clients) over the years and their personalities reflect a cross section of humanity. Some are decent - some are not.
I certainly wouldn't tar them all with the same brush.
However. I do think that over the past few decades taxation policy has, on the whole, been fairly kind to those who chose to "invest" in land and property - and not so kind to those who chose to invest in industry or commerce.
A rebalancing of the tax environment has long been overdue.
Also. culturally, the UK population has become rather fixated with property ownership as a symbol of "capitalist entrepreneurship" - which I actually don't think it always is.
I'd agree with most of this but would add that there's nothing wrong with renting instead of buying. Europeans embrace rental as a perfectly acceptable lifestyle choice. Rental properties do deliver a worthwhile service. I have both rented and been a landlord for most of my adult life, very often simultaneously. I would have been totally lost at many stages throughout had I not had the opportunity to rent a place to live, most often from a private landlord (and by no means just in the UK). Over many decades of doing this, I've never rented a property to anyone who expressed any desire to buy. It's always been a life stage or pragmatic study/work choice for my tenants, just as it has been for me.I certainly wouldn't tar them all with the same brush.
However. I do think that over the past few decades taxation policy has, on the whole, been fairly kind to those who chose to "invest" in land and property - and not so kind to those who chose to invest in industry or commerce.
A rebalancing of the tax environment has long been overdue.
Also. culturally, the UK population has become rather fixated with property ownership as a symbol of "capitalist entrepreneurship" - which I actually don't think it always is.
Finally, it's worth repeating the obvious. Most "owners" do not own their own property. Their lenders do.
Eric Mc said:
I'm not down on those who want to buy properties for letting at all. What I do find rather hard to fathom are those who -
a) think they are doing society a favour by buying up properties
b) think they are engaged in an effective pension strategy
c) pretend that they are NOT engaged in a form of speculation
I disagree with B.a) think they are doing society a favour by buying up properties
b) think they are engaged in an effective pension strategy
c) pretend that they are NOT engaged in a form of speculation
I WISH I had used BTL as a decent pension strategy, I would be much MUCH better off.
What's not to like - rent washes the face of a repayment mortgage meaning your deposit turns into an entire property over time. Done.
Don't forget that putting your savings into funds or equities or bonds or gold or whatever is ALSO speculation.
walm said:
I could not agree with this more.
And I would go further and say I wish the government grew some balls and DID raise income tax.
It is utterly deplorable that they were thinking of taking £1,300 from the least well of when despite all the BS of the "squeezed middle" - I honestly can't imagine anyone would notice 40% going to 41% or the 45% rate going back to 50%.
It's absolutely nuts.
I would happily have paid £1,300 more a year if it meant someone almost on the bread line got to keep theirs. Of course I might have to delay the next car purchase or stay in the UK over the summer rather than head to the sun but that is NOTHING compared to potentially having to give up Sky TV
no... I mean genuinely - losing that tiny buffer between carrying on as today, just about surviving with the odd treat for those on tax credits vs. pushing them into serious financial issues.
Walm Nothing to stop you posting a chq if it makes you happy .And I would go further and say I wish the government grew some balls and DID raise income tax.
It is utterly deplorable that they were thinking of taking £1,300 from the least well of when despite all the BS of the "squeezed middle" - I honestly can't imagine anyone would notice 40% going to 41% or the 45% rate going back to 50%.
It's absolutely nuts.
I would happily have paid £1,300 more a year if it meant someone almost on the bread line got to keep theirs. Of course I might have to delay the next car purchase or stay in the UK over the summer rather than head to the sun but that is NOTHING compared to potentially having to give up Sky TV
no... I mean genuinely - losing that tiny buffer between carrying on as today, just about surviving with the odd treat for those on tax credits vs. pushing them into serious financial issues.Behemoth said:
I'd agree with most of this but would add that there's nothing wrong with renting instead of buying. Europeans embrace rental as a perfectly acceptable lifestyle choice. Rental properties do deliver a worthwhile service. I have both rented and been a landlord for most of my adult life, very often simultaneously. I would have been totally lost at many stages throughout had I not had the opportunity to rent a place to live, most often from a private landlord (and by no means just in the UK). Over many decades of doing this, I've never rented a property to anyone who expressed any desire to buy. It's always been a life stage or pragmatic study/work choice for my tenants, just as it has been for me.
Finally, it's worth repeating the obvious. Most "owners" do not own their own property. Their lenders do.
The lust for owning property is strong in the British Isles. It's a combination of a "land" thing (very strong in Ireland) and an "Englishman's Castle" thing - both of which are deep rooted. In more modern times it has been exacerbated by propaganda from government and the media which has put forward the view that a person needs to own property for them to be properly ranked as fully valuable members of society.Finally, it's worth repeating the obvious. Most "owners" do not own their own property. Their lenders do.
This also has its roots in history. At one point, only those who owned property were allowed to vote.
I don't think that the social stigma associated with renting has ever been that strong on continental Europe.
Eric Mc said:
The lust for owning property is strong in the British Isles. It's a combination of a "land" thing (very strong in Ireland) and an "Englishman's Castle" thing - both of which are deep rooted. In more modern times it has been exacerbated by propaganda from government and the media which has put forward the view that a person needs to own property for them to be properly ranked as fully valuable members of society.
This also has its roots in history. At one point, only those who owned property were allowed to vote.
I don't think that the social stigma associated with renting has ever been that strong on continental Europe.
Eric I would suggest that the lust for property is because the government can't print houses.This also has its roots in history. At one point, only those who owned property were allowed to vote.
I don't think that the social stigma associated with renting has ever been that strong on continental Europe.
Sound money and 4% interest rates would go a long way to solve the problem .
kitz said:
Eric I would suggest that the lust for property is because the government can't print houses.
Sound money and 4% interest rates would go a long way to solve the problem .
That is a situation not unique to the UK or Ireland. We do have a different attitude to property ownership on these islands which is way deeper than purely a response to government policy or market forces.Sound money and 4% interest rates would go a long way to solve the problem .
kitz said:
Sound money and 4% interest rates would go a long way to solve the problem .
Very true. One of my hobby-horses is that government/central bank policies (not just in UK) over the last decade have made it increasingly clear that "money" in itself is a pretty valueless commodity. It is IMO essential to start raising interest rates immediately - but that doesn't mean they will!If my partner and I want to buy a new home together (but we own, between us, several BTL's) - will the purchase of our new home cost us an extra 3% in stamp duty from April '16? Do I have that right? The fact we have other properties in our name means we will have to pay that extra 3%?
Was having a few drinks with a couple of property fund managers today.
On the surface it seems like the intent is to try and halt retail investment into the residential market and to focus it more to funds. The theory is that it will make the rental market more efficient, more competitive and more importantly better able to withstand a market correction.
It was pointed out that the State owned banks and others still have extreme exposure to mortgage debt and that institutional investors would not be forced sellers in a downturn unlike the less well capitalised private investor.
Seems an interesting argument.
On the surface it seems like the intent is to try and halt retail investment into the residential market and to focus it more to funds. The theory is that it will make the rental market more efficient, more competitive and more importantly better able to withstand a market correction.
It was pointed out that the State owned banks and others still have extreme exposure to mortgage debt and that institutional investors would not be forced sellers in a downturn unlike the less well capitalised private investor.
Seems an interesting argument.
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