Barclays Break Cover - New BTL Criteria Due to New Tax Regim

[528Sport]

All the landlord haters are going to love this.

I give it a few years and the incentives for private landlords will be massive. The landlord haters simply fail to understand "not everyone wants to buy".

I am a renter myself and there is a huge shortage of suitable property for me and my family.

[cat with a hat]

528Sport said:

All the landlord haters are going to love this.

I give it a few years and the incentives for private landlords will be massive. The landlord haters simply fail to understand "not everyone wants to buy".

I am a renter myself and there is a huge shortage of suitable property for me and my family.

Im on the opposite side of the fence.. I have a decent sized deposit to drop on a property but havent been able to buy because fking cash buyers get accepted despite offering less than me or the property enters a bidding war because BTL 3% changes were coming into affect.

I cant compete. Now I'm hoping it all crashes and burns, but the govt will try to avoid that.

Dont get me started on the piss take that is 'help to buy'. In spite i havent opened an 'savings' account that will help me save all of 1k in the time propety prices have rising by the equivalent of 5-10k.

[Casa1862]

Sarnie said:

Yep.............rumours of Natwest moving to 135% too.......

Aren't Natwest already 125% at 7% already, if they go 135% at 7% can't see then getting much business, perhaps that's the points, rates seem to be not very either.

[Casa1862]

cat with a hat said:

Im on the opposite side of the fence.. I have a decent sized deposit to drop on a property but havent been able to buy because fking cash buyers get accepted despite offering less than me or the property enters a bidding war because BTL 3% changes were coming into affect.

I cant compete. Now I'm hoping it all crashes and burns, but the govt will try to avoid that.

Dont get me started on the piss take that is 'help to buy'. In spite i havent opened an 'savings' account that will help me save all of 1k in the time propety prices have rising by the equivalent of 5-10k.

If it's cash buyers giving you the problem then these changes won't make any difference as they only affect mortgages. If they put the minimum threshold up for rents then gives landlords a good reason to increase the rent, that certainly won't help first time buyers.

[Sarnie]

Casa1862 said:

Aren't Natwest already 125% at 7% already, if they go 135% at 7% can't see then getting much business, perhaps that's the points, rates seem to be not very either.

No, never been 7%...........

[Casa1862]

Sarnie said:

No, never been 7%...........

http://intermediary.natwest.com/downloads/natwest/btl-rental-cover.pdf


http://intermediary.natwest.com/downloads/natwest/...

[eliot]

528Sport said:

All the landlord haters are going to love this.

I give it a few years and the incentives for private landlords will be massive. The landlord haters simply fail to understand "not everyone wants to buy".

I am a renter myself and there is a huge shortage of suitable property for me and my family.

If everyone rents and never owns a property (for whatever reason) - I trust they are building up a sizeable pension pot, as they are going to have to continue to rent until they die. Whereas with a mortgage you will eventually own the property, which if nothing else at least means you can live on less in retirement or have the choice to downsize and release capital.

[Ozzie Osmond]

Last year all the muppets were piling into BTL. So the chancellor made it much less attractive. But all the muppets are still piling in!

Totally confirms the whole BTL insanity.

[Sarnie]

Casa1862 said:

http://intermediary.natwest.com/downloads/natwest/...


http://intermediary.natwest.com/downloads/natwest/...

"Rental cover - up to four loans

We use a rental cover percentage to work out how much your client can borrow.
All rental cover percentages are based on an interest rate of 125% at 5.5%."

http://intermediary.natwest.com/home-options.asp?p...

[drainbrain]

If a load of people who up till now have been buying BTL property now exit the market won't this mean even fewer property sales and the likelihood of a fresh round of price reductions to get the stock moving at all? Presumably this will mean even less business for estate agents, letting agents, mortgage advisors etc etc. And other ancillaries like insurers and tradesmen and all the others who make part or all of their living from the property industry.

Is all this really just to stop BTL people expanding and making more profit?

Why? Does that make anything better for anyone?

And if there's a reduced stock of rental property isn't that going to lead to increased rents (supply/demand thing)?

Don't think destroying the BTL industry is necessarily a good idea other than by potentially driving down prices in certain areas i.e. London so that it becomes more affordable. Not that a lot of BTL property is the type of property the modern FTB wants anyway.

[528Sport]

cat with a hat said:

528Sport said:

All the landlord haters are going to love this.

I give it a few years and the incentives for private landlords will be massive. The landlord haters simply fail to understand "not everyone wants to buy".

I am a renter myself and there is a huge shortage of suitable property for me and my family.

Im on the opposite side of the fence.. I have a decent sized deposit to drop on a property but havent been able to buy because fking cash buyers get accepted despite offering less than me or the property enters a bidding war because BTL 3% changes were coming into affect.

I cant compete. Now I'm hoping it all crashes and burns, but the govt will try to avoid that.

Dont get me started on the piss take that is 'help to buy'. In spite i havent opened an 'savings' account that will help me save all of 1k in the time propety prices have rising by the equivalent of 5-10k.

I feel for you.



Recently I've been researching BTL and flipping houses. You'd be surprised just how few houses even make the estate agents window. Most agents have lists of investors ready to buy, they charge a buyers premium/finders fee..


This is how to fix the system:
I'd like to see a world where ALL properties must be advertised for 21 days to give everyone a fighting chance.
I'd also like to see the mortgage system speeded up.
One other way would be for the lenders to look at historic rental payments and if you can afford them and have a deposit then match a mortgage to suit.
I pay £695/month rent but according to a bank cant afford a mortgage despite having nearly a 40% deposit on the house type id like to fit our needs.....


Just remember even though landlords have been painted badly they do provide a service to people who don't want to buy. At the moment I'm very happy renting.

Edited by 528Sport on Monday 9th May 10:43

Edited by 528Sport on Monday 9th May 14:16

[Jockman]

drainbrain said:

Is all this really just to stop BTL people expanding and making more profit?

No, he just wants a bigger piece of the pie. Georgie Porgie etc...

When a party makes manifesto commitments on the big ticket items eg VAT, Income Tax, NI - combined with an enormous deficit - then personal peripheral taxes are in the firing line.

[drainbrain]

Jockman said:

drainbrain said:

Is all this really just to stop BTL people expanding and making more profit?

No, he just wants a bigger piece of the pie. Georgie Porgie etc...

When a party makes manifesto commitments on the big ticket items eg VAT, Income Tax, NI - combined with an enormous deficit - then personal peripheral taxes are in the firing line.

So how does doing less business increase the tax take?

[Jockman]

drainbrain said:

So how does doing less business increase the tax take?

He is calculating that you won't do less business. If BTL remains profitable then why would anyone stop doing it?

Dividends have just been hit with an extra 7.5%. He calculates people will still pay them. He's right.

[drainbrain]

Jockman said:

drainbrain said:

So how does doing less business increase the tax take?

He is calculating that you won't do less business. If BTL remains profitable then why would anyone stop doing it?

Dividends have just been hit with an extra 7.5%. He calculates people will still pay them. He's right.

What I meant was if people are going to reduce their interest in or withdraw from BTL how does shrinking that industry and discouraging participation in it increase the amount of tax it generates?

In my case I've sold off stock to buy back and pay off debt. Less income, less expenditure (taxable wages) and of course less tax to pay.

[Welshbeef]

drainbrain said:

What I meant was if people are going to reduce their interest in or withdraw from BTL how does shrinking that industry and discouraging participation in it increase the amount of tax it generates?

In my case I've sold off stock to buy back and pay off debt. Less income, less expenditure (taxable wages) and of course less tax to pay.

But so many people are playing the long game - the hard facts are vastly too few houses in existence and the need to build X amount s year just to keep up with demand. If they don't even match that (they appear to be building half the number required) then you have even more of a supply issue yet demand is increasing.).

So some may choose to do what you have other night we'll have to due to finances but don't think that means massive withdrawal from that sector.

Remember also that actually buying a house is so hard that some parents (us included) are buying houses now and then 25odd years time the kids can have them otherwise they wouldn't have a chance in buying or again if they did they'd have a studio and leveraged to the hilt this way they get a house with off road parking and frankly no need to ever move up he ladder unless they want to - plus guess what I'll not need to pitch in with hefty deposits when they need it wiping out our hopefully comfortable retirement instead.

Horses for courses

[Jockman]

drainbrain said:

What I meant was if people are going to reduce their interest in or withdraw from BTL how does shrinking that industry and discouraging participation in it increase the amount of tax it generates?

I know what you meant hence my answer. I can hear you grinding your teeth in annoyance - me too, especially over dividends!!

He will make it up to you before 2020. He's a politician.

[MrChips]

Hmm, this might actually cause me some issues! One BTL with a LTV of around 55-65%. Mortgage taken in line with a stress test of 125% based on a 5% rate. However our options were a bit limited at the time as many lenders were stress testing at 5.5% or 6%.

Just signed new tenants on a contract which would be cover us at a stress test of 135% based on a 5% rate, so in general terms were pretty much at the top end of what we can borrow against the house. The house has likely gained in value quite a bit in the past 6 months which is pushing our return on investment down a fair bit in % terms.

Unless I can release some more cash into the house in a couple of years, I think these measures, along with the income tax changes may mean we're ripe to be one of those pushed to sell up. Or put the rent up and up

[Sarnie]

MrChips said:

Hmm, this might actually cause me some issues!

You won't be the only one, people just don't realise it yet............

[Jockman]

Access to Funds is tightening....on a illiquid asset.

A veritable cocktail for some.