Anyone thinkng of selling BTL due to Labour risk?
Discussion
I have a couple of buy to lets.
They make a profit.
But would barely break even if Labour were in power and introduced a 3% of 55% of property value LVT.
That combined with a subsequent not insignificant fall in property prices.
And tne fact i could pay of my home mortgage with the capital i have n the BTLs.
I think i have reached the conclusion that BTL isn’t worth the risk any longer.
The BTLs were supposed to be a fairly safe way to provide for retirement.
But with 5he brexit/labour threats, it seems not so safe now.
One is in the midlands and hasn’t increased in value in 12 years, and i am starting to think won’t in the next 10 years.
The other is in north london and has not aporeciated in tne last few years.
Anyone feel the same way/have similar plans?
Thoughts?
They make a profit.
But would barely break even if Labour were in power and introduced a 3% of 55% of property value LVT.
That combined with a subsequent not insignificant fall in property prices.
And tne fact i could pay of my home mortgage with the capital i have n the BTLs.
I think i have reached the conclusion that BTL isn’t worth the risk any longer.
The BTLs were supposed to be a fairly safe way to provide for retirement.
But with 5he brexit/labour threats, it seems not so safe now.
One is in the midlands and hasn’t increased in value in 12 years, and i am starting to think won’t in the next 10 years.
The other is in north london and has not aporeciated in tne last few years.
Anyone feel the same way/have similar plans?
Thoughts?
Is there anything to stop private landlords and tenants entering into their own contracts, more like commercial property? Clearly there would have to be fair and reasonable contract terms (i.e. I’ll maintain the property and provide you with quiet enjoyment, you look after it and pay the rent or you’re out), but what’s to stop private landlords (and tenants) saying sod this, we’ll have our own contract?
troika said:
Is there anything to stop private landlords and tenants entering into their own contracts, more like commercial property? Clearly there would have to be fair and reasonable contract terms (i.e. I’ll maintain the property and provide you with quiet enjoyment, you look after it and pay the rent or you’re out), but what’s to stop private landlords (and tenants) saying sod this, we’ll have our own contract?
Yes, the law.OK. The law also says you can’t drive over 70 mph on the motorway. Most seem to ignore that without consequence. Government action always creates a reaction. Surely many landlords (who own outright without mortgages) would be looking at alternative contracts? If they are fair and reasonable and entered into freely, what’s the problem?
troika said:
OK. The law also says you can’t drive over 70 mph on the motorway. Most seem to ignore that without consequence. Government action always creates a reaction. Surely many landlords (who own outright without mortgages) would be looking at alternative contracts? If they are fair and reasonable and entered into freely, what’s the problem?
My daughter rents because she wants to be mobile and live in a city centre and doesn't want a leasehold flat. I rent out a 3 bed house in a nice area. It amazes me when I see some of the tenancy agreements. There are certain aspects of tenant law that as a landlord I just wouldn't ignore or try to write my own version.
In fact the Goverment has published an ideal AST contract. Available on thier website, paid for by the tax payer. I can't see anything g in it that isn't fair and reasonable both ways.
Yes I am selling up before Labour get into power. With the recent rises in property prices, and the fact I've not put my tents up means the effective yield is low (ROI is good though).
A value based tax would make the yields negligible, so any repairs or voids would not be covered. I can get a better return else where.
A value based tax would make the yields negligible, so any repairs or voids would not be covered. I can get a better return else where.
Pit Pony said:
My daughter rents because she wants to be mobile and live in a city centre and doesn't want a leasehold flat.
I rent out a 3 bed house in a nice area. It amazes me when I see some of the tenancy agreements. There are certain aspects of tenant law that as a landlord I just wouldn't ignore or try to write my own version.
In fact the Goverment has published an ideal AST contract. Available on thier website, paid for by the tax payer. I can't see anything g in it that isn't fair and reasonable both ways.
I get that (I have a couple myself). I’m just playing devils advocate that if Corbyn is hostile and tips the balance too far, what’s to stop clever lawyers drafting alternative contracts if reasonable and freely entered into. I can see rents increasing if supply is reduced and free money dished out. I rent out a 3 bed house in a nice area. It amazes me when I see some of the tenancy agreements. There are certain aspects of tenant law that as a landlord I just wouldn't ignore or try to write my own version.
In fact the Goverment has published an ideal AST contract. Available on thier website, paid for by the tax payer. I can't see anything g in it that isn't fair and reasonable both ways.
bearman68 said:
What's LVT? As far as I can see it's Luxury Vinyl Tiles, but why would Labour tax tiles at 3%?? 
Apparently it means Land Value Tax.However after reading an article on the subject I think having a sliding scale of taxation on Luxury Vinyl Tiling is probably more workable.
troika said:
OK. The law also says you can’t drive over 70 mph on the motorway. Most seem to ignore that without consequence. Government action always creates a reaction. Surely many landlords (who own outright without mortgages) would be looking at alternative contracts? If they are fair and reasonable and entered into freely, what’s the problem?
There is consequences though, if they get caught over 70 they get 3 points and a fine. Sure you would get away with it for so long, until you get a tennent who knows there stuff. No deposit scheme? Kaching... etc.troika said:
Pit Pony said:
My daughter rents because she wants to be mobile and live in a city centre and doesn't want a leasehold flat.
I rent out a 3 bed house in a nice area. It amazes me when I see some of the tenancy agreements. There are certain aspects of tenant law that as a landlord I just wouldn't ignore or try to write my own version.
In fact the Goverment has published an ideal AST contract. Available on thier website, paid for by the tax payer. I can't see anything g in it that isn't fair and reasonable both ways.
I get that (I have a couple myself). I’m just playing devils advocate that if Corbyn is hostile and tips the balance too far, what’s to stop clever lawyers drafting alternative contracts if reasonable and freely entered into. I can see rents increasing if supply is reduced and free money dished out. I rent out a 3 bed house in a nice area. It amazes me when I see some of the tenancy agreements. There are certain aspects of tenant law that as a landlord I just wouldn't ignore or try to write my own version.
In fact the Goverment has published an ideal AST contract. Available on thier website, paid for by the tax payer. I can't see anything g in it that isn't fair and reasonable both ways.
Labour wouldn't introduce LVT without rent caps to prevent landlords passing on the increased costs.
That is guaranteed.
Why make LVT payable by the owner and then allow landlords to pass the cost to the tenant? They won't.
You won't be able to increase rents past inflation or wage growth or whichever is smaller.
Section 21 no fault evictions is on it's way out, so no evicting tenants and renting to someone else at a higher rate.
On a 200k BTL, LVT at 3% of 55% is £3300 pa.
Payable by the owner/landlord.
That must have an effect on house prices? 10-20% fall?
philv said:
There would be rent caps.
Labour wouldn't introduce LVT without rent caps to prevent landlords passing on the increased costs.
That is guaranteed.
Why make LVT payable by the owner and then allow landlords to pass the cost to the tenant? They won't.
You won't be able to increase rents past inflation or wage growth or whichever is smaller.
Section 21 no fault evictions is on it's way out, so no evicting tenants and renting to someone else at a higher rate.
On a 200k BTL, LVT at 3% of 55% is £3300 pa.
Payable by the owner/landlord.
That must have an effect on house prices? 10-20% fall?
Do you think a Labour govt would actually have the wherewithal to effectively implement and apply rent caps / LVT etc or is this just political rhetoric and posturing? Labour wouldn't introduce LVT without rent caps to prevent landlords passing on the increased costs.
That is guaranteed.
Why make LVT payable by the owner and then allow landlords to pass the cost to the tenant? They won't.
You won't be able to increase rents past inflation or wage growth or whichever is smaller.
Section 21 no fault evictions is on it's way out, so no evicting tenants and renting to someone else at a higher rate.
On a 200k BTL, LVT at 3% of 55% is £3300 pa.
Payable by the owner/landlord.
That must have an effect on house prices? 10-20% fall?
Derek Chevalier said:
philv said:
They make a profit.
But would barely break even if Labour were in power and introduced a 3% of 55% of property value LVT.
What is your plan if/when base rates rise?But would barely break even if Labour were in power and introduced a 3% of 55% of property value LVT.
I am quite comfortable with my planning on the mortgage side, and the effect of any base rate increases.
philv said:
Derek Chevalier said:
philv said:
They make a profit.
But would barely break even if Labour were in power and introduced a 3% of 55% of property value LVT.
What is your plan if/when base rates rise?But would barely break even if Labour were in power and introduced a 3% of 55% of property value LVT.
I am quite comfortable with my planning on the mortgage side, and the effect of any base rate increases.
Sold ours in January. Took about 8 months to sell in a fairly popular area.
Returns are just not good enough for the risk now. I would consider another but it would be the very cheapest end of the market, 2 up 2 down for £100k with no mortgage. Going rate seems to be £650-£700 PCM. I was getting £950 for a 4 bed semi worth £250k! The only plus point is my mortgage was about 20% LTV so most of the rent was profit but that brings its own problems now with taxation.
I will be waiting to see what happens to the market over the next 12 - 18 months. My priority at the moment is to get some funds into my 19/20 ISA but again waiting to see what happens around the new year.
Returns are just not good enough for the risk now. I would consider another but it would be the very cheapest end of the market, 2 up 2 down for £100k with no mortgage. Going rate seems to be £650-£700 PCM. I was getting £950 for a 4 bed semi worth £250k! The only plus point is my mortgage was about 20% LTV so most of the rent was profit but that brings its own problems now with taxation.
I will be waiting to see what happens to the market over the next 12 - 18 months. My priority at the moment is to get some funds into my 19/20 ISA but again waiting to see what happens around the new year.
troika said:
philv said:
There would be rent caps.
Labour wouldn't introduce LVT without rent caps to prevent landlords passing on the increased costs.
That is guaranteed.
Why make LVT payable by the owner and then allow landlords to pass the cost to the tenant? They won't.
You won't be able to increase rents past inflation or wage growth or whichever is smaller.
Section 21 no fault evictions is on it's way out, so no evicting tenants and renting to someone else at a higher rate.
On a 200k BTL, LVT at 3% of 55% is £3300 pa.
Payable by the owner/landlord.
That must have an effect on house prices? 10-20% fall?
Do you think a Labour govt would actually have the wherewithal to effectively implement and apply rent caps / LVT etc or is this just political rhetoric and posturing? Labour wouldn't introduce LVT without rent caps to prevent landlords passing on the increased costs.
That is guaranteed.
Why make LVT payable by the owner and then allow landlords to pass the cost to the tenant? They won't.
You won't be able to increase rents past inflation or wage growth or whichever is smaller.
Section 21 no fault evictions is on it's way out, so no evicting tenants and renting to someone else at a higher rate.
On a 200k BTL, LVT at 3% of 55% is £3300 pa.
Payable by the owner/landlord.
That must have an effect on house prices? 10-20% fall?
I am sure Momentum have spent quite a bit of time looking at this and sorting out the finer details.
The finer details of making sure there are no loopholes.
I think Labour would be quite happy to squeeze every last landlord out of the market, no matter the consequences.
They won't be the first government in history around the globe to implement policies that are the f
ked up idea of utopia, no matter what the consequences.I'm not one o those that things it can't happen here.
Momentum are behind the scenes and they most certainly do have a different idea of utopia to most everyone else.
Another advantage of selling the btls is that it would provide me the opportunity to move abroad.
That may well sway thiings to selling up.
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