BTL - how does it make money?
Discussion
It always seems to be forgotten that for older properties there will be big bills to get them to comply with new green regs for rentals and read today in the DT more aggro expected with levelling up (they quote NRLA saying £10k)
Personally I think rent controls are just down the road
I certainly won’t be buying any more
Personally I think rent controls are just down the road
I certainly won’t be buying any more
Meanwhile in Scotland.......about 15 years ahead of England
https://www.gov.scot/publications/new-deal-tenants...
https://www.gov.scot/publications/new-deal-tenants...
Kickstart said:
It always seems to be forgotten that for older properties there will be big bills to get them to comply with new green regs for rentals and read today in the DT more aggro expected with levelling up (they quote NRLA saying £10k)
Personally I think rent controls are just down the road
I certainly won’t be buying any more
There are a raft of exemptions… and I doubt we’ll see anything scary in the way of rent controls. Personally I think rent controls are just down the road
I certainly won’t be buying any more
Polome said:
For the past few years HMRC have been reducing the percentage of the mortgage interest that can be claimed as tax relief….and I think that from 2021 no interest can be claimed as relief…worth a check as it can be a lot of tax to pay.
That's right but you now receive a tax-credit, based on 20% of your mortgage interest payments. So I think its pretty similar if you are a low rate tax payer to how it was before. LooneyTunes said:
Kickstart said:
It always seems to be forgotten that for older properties there will be big bills to get them to comply with new green regs for rentals and read today in the DT more aggro expected with levelling up (they quote NRLA saying £10k)
Personally I think rent controls are just down the road
I certainly won’t be buying any more
There are a raft of exemptions… and I doubt we’ll see anything scary in the way of rent controls. Personally I think rent controls are just down the road
I certainly won’t be buying any more
Rent controls
Land Value Tax
Long leases
Right to buy at a 25% discount (funded by the landlord)
Given that gross yeilds in the private rental sector are about 5% landlords would be f
ked. Value tax and profit taxes, no ability to raise rents to cover, and you're trapped letting a loss making asset. Add to that your asset is now worth 25% less if you want to sell (but your taxes are based on full market value).It will only take a change of government.
Groat said:
Meanwhile in Scotland.......about 15 years ahead of England
https://www.gov.scot/publications/new-deal-tenants...
But stick to a 2-bed and avoid a 3-bed flat due to over-enthusiastic regs after some event about 10 or more years back, right?https://www.gov.scot/publications/new-deal-tenants...
DD rented in Glasgow - property had a 3rd bedroom the landlord didn't rent out due to much steeper costs/regs!
98elise said:
I Disagree. It was part of a raft of punitive changes planned by Labour at the last election, including....
They didn’t get elected. One could argue however that Corbyn’s position (as illustrated by proposals such as these) was waaaaay too far to the left to gain any real traction. I know many who would have moved to say LibDem as a result of brexit but wanted to do everything possible to ensure he didn’t move in to #10.
It would be reasonable to expect some changes with a change of government, but nothing approaching the extent of the list you posted as parties aren’t electable if they’re too far left/right of centre.
/np&e
Kickstart said:
It always seems to be forgotten that for older properties there will be big bills to get them to comply with new green regs for rentals and read today in the DT more aggro expected with levelling up (they quote NRLA saying £10k)
Personally I think rent controls are just down the road
I certainly won’t be buying any more
Wasn't that designed to stop scummy landlord types and forcing them to improve the standard of their BTLs?Personally I think rent controls are just down the road
I certainly won’t be buying any more
I’m quite impressed this thread hasn’t degenerated into a lot of humble bragging by powerfully built company directors.
Like a lot of people, I “accidentally” fell into a single small btl about 20 years ago, and for quite a few years after that I was exactly the same as the OP. Couple of medium sized bills and it was a loss for the year.
And yet the papers were full of the Candy Brothers etc. making gazillions. Which I still don’t understand, I can only assume successful landlords were very, very tax efficient.
Like a lot of people, I “accidentally” fell into a single small btl about 20 years ago, and for quite a few years after that I was exactly the same as the OP. Couple of medium sized bills and it was a loss for the year.
And yet the papers were full of the Candy Brothers etc. making gazillions. Which I still don’t understand, I can only assume successful landlords were very, very tax efficient.
It isn’t just tax. It’s also access to capital and scale (which in turn brings efficiency). If you turn around a small project or portfolio there’s a limit in absolute terms of what you can make. Make a similar percentage (or even a bit less) on a project 50x the size and you’ve made some significant money.
starting the full refurb of this beauty today......
https://www.onthemarket.com/details/11213589/#/pho...
In ten grand's time (total purchase + refurb £45k) it'll become home to a nice perma-DSS tenant at £495pcm
Rising area with rising prices. Housing Association estate management coming within next 3 months!!
https://www.onthemarket.com/details/11213589/#/pho...
In ten grand's time (total purchase + refurb £45k) it'll become home to a nice perma-DSS tenant at £495pcm
Rising area with rising prices. Housing Association estate management coming within next 3 months!!
LooneyTunes said:
98elise said:
I Disagree. It was part of a raft of punitive changes planned by Labour at the last election, including....
They didn’t get elected. One could argue however that Corbyn’s position (as illustrated by proposals such as these) was waaaaay too far to the left to gain any real traction. I know many who would have moved to say LibDem as a result of brexit but wanted to do everything possible to ensure he didn’t move in to #10.
It would be reasonable to expect some changes with a change of government, but nothing approaching the extent of the list you posted as parties aren’t electable if they’re too far left/right of centre.
/np&e
98elise said:
LooneyTunes said:
98elise said:
I Disagree. It was part of a raft of punitive changes planned by Labour at the last election, including....
They didn’t get elected. One could argue however that Corbyn’s position (as illustrated by proposals such as these) was waaaaay too far to the left to gain any real traction. I know many who would have moved to say LibDem as a result of brexit but wanted to do everything possible to ensure he didn’t move in to #10.
It would be reasonable to expect some changes with a change of government, but nothing approaching the extent of the list you posted as parties aren’t electable if they’re too far left/right of centre.
/np&e
It will be very different this time. If I was a betting man I'd go for a small Labour majority.
If Boris is still PM then Labours spiel on the doorstep will write itself.
philv said:
Don't forget the ever more demanding EPC.
By 2030, a rental will require a B rating at a cost of up tp 10000.
And if labour ever get in, you might as well hand them the keys.
I dont think that is correct. At present nothing has been passed and the talk is about C rating from 2030. Current rating min is E so my bet would be that it gets watered down to a D rating in 2035By 2030, a rental will require a B rating at a cost of up tp 10000.
And if labour ever get in, you might as well hand them the keys.
The other thing that annoys me is if you bought a house for 100k, assume the price keeps up with inflation which I think in the long run is what you expect, when you go to sell it's worth say 200k and after cgt you pocket 178k which is in real terms than the 100k you put in. Again leverage helps.
BTL has only ever made money from house price growth. the rent covers the mortgage, or maybe a bit more if you're lucky or a bit less if you're not. but it's just noise compared to owning a massively leveraged asset that goes up 10% a year.
if house prices had been falling reliably 10% a year for 30 years no-one would be interested.
in Japan prices dropped almost continuously after the bust in 1989 and only really started flattening out or going up a bit 25 years later. surprisingly enough, BTL is not really a popular thing there!
if house prices had been falling reliably 10% a year for 30 years no-one would be interested.
in Japan prices dropped almost continuously after the bust in 1989 and only really started flattening out or going up a bit 25 years later. surprisingly enough, BTL is not really a popular thing there!
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