BTL tax relief options

[Z064life]

Hi All,

With the tax relief changes coming into play over the next few years, BTL seems to be pretty much non profitable. But if rents are risen, is there any profit to be made? For example in the West London area. Or is rising rent not an option?

What would be another suitable option for investment other than BTL? (open question, not enough info I know!)

Thanks!

[UpTheIron]

Z064life said:

...BTL seems to be pretty much non profitable.

Personally, I don't see that this is the case. If it wasn't profitable then people (myself included) wouldn't do it.

Yes it will affect some over-leveraged landlords, but a recent review of my position and I can't find anything compelling enough to move to (in terms of risk v reward). Some - for example those banking on price rises - may get burned.

In terms of other options, all of which I have:

Shares - I have a relatively small number of holdings in various companies that I follow on a long term basis.
P2P - My personal view is that P2P lending is probably a higher long term risk that property, otherwise I would be inclined to move away from property and into some longer term lending (e.g. Ratesetter 5 year)
VCT - handy for offsetting tax if useful to you
Bank Accounts - plenty of easy 3%-5% options (small balances only)

[BoRED S2upid]

As above it only becomes non profitable if the borrowing is too high I've just signed my tenants up for another 12 months at the same rent.

[Z064life]

UpTheIron said:

ersonally, I don't see that this is the case. If it wasn't profitable then people (myself included) wouldn't do it.

Yes it will affect some over-leveraged landlords, but a recent review of my position and I can't find anything compelling enough to move to (in terms of risk v reward). Some - for example those banking on price rises - may get burned.

In terms of other options, all of which I have:

Shares - I have a relatively small number of holdings in various companies that I follow on a long term basis.
P2P - My personal view is that P2P lending is probably a higher long term risk that property, otherwise I would be inclined to move away from property and into some longer term lending (e.g. Ratesetter 5 year)
VCT - handy for offsetting tax if useful to you
Bank Accounts - plenty of easy 3%-5% options (small balances only)

The problem I see is that nothing you invest in can really return a few hundred £ a month though.

[UpTheIron]

Z064life said:

The problem I see is that nothing you invest in can really return a few hundred £ a month though.

That statement doesn't make sense. All of the things I listed can return much more, it just depends how much capital you put at risk.

What sort of capital are you talking about and what sort of return do you expect?

[Z064life]

UpTheIron said:

hat statement doesn't make sense. All of the things I listed can return much more, it just depends how much capital you put at risk.

What sort of capital are you talking about and what sort of return do you expect?

Well when I compare a house to those options, a house (at least in London) typically will only go up in value not down, which makes it attractive.


With the tax relief changes, is it a case that regardless of rent, you would lose money? (I.E. for every £1 you lose £1.20) or could you mitigate this loss by increased rents?

[caymanbill]

Z064life said:

With the tax relief changes, is it a case that regardless of rent, you would lose money? (I.E. for every £1 you lose £1.20) or could you mitigate this loss by increased rents?

Not everyone will be automatically making a loss post changes, it's largely dependant on how leveraged you are. I'm not really sure I understand your question?