Chris Unwin

Thanks to everyone who has contributed to this thread. One thing is clear; I will scrutinise very carefully the ground rent provisions in any future leases I contemplate buying........ Read More

I speak as a private individual and any comments are not advice and should not be taken as such.

I am glad to see someone else is looking at SIPPs. I think they are great. You can invest and get an average stock market return probably higher than from a BTL investment. You pay tax at only three quarters of your marginal rate when you remove money from the SIPP (or take 25% tax free) and can get standard tax relief as well. As a landlord with rental only income I believe you can invest up to £3600 gross annually (but check this). So why would you pay off the mortgage? Your SIPP asset sits outside your estate which helps with Inheritance Tax. For the last few years I have invested in a SIPP each April, the maximium I can with rental only income. I look forward to April coming each year now! If you are working for a salary as well you can claim tax back at 40% if you are a higher rate payer. Whats not to like? I have a SIPP, my wife has a SIPP and I do believe this helps significantly with post section 24 tax management.

As always, take proper financial advice before doing anything.... Read More

I am so relaxed today I think I'll have a ramble on Property 118

Disproportionately wealthy?

I am just a guy who left university with nothing but a maths degree and nothing in the bank.
My only set of clothes were getting closer to the bone(Kris Kristofferson said that)

I got a job teaching mathematics (which I did enjoy). When I was a kid I used to love playing monopoly. I loved the risks, the windfalls, the pile of cash growing, the wisdom of reinvesting, the rent collection and the sense of achievment.
I recall even to this day when I once picked up a chance card and was saddled with "Street repairs" how I in that instant I looked into the future and sensed my own reality in the distance. It was prophetic.

I always won (nearly always).

So when I left college I was consumed with the desire to purchase property and to grow a portfolio. I saved my first £5000 deposit by scrimping and saving. I worked a second job at weekends playing soldiers in the Terratorial Army where for £12 a day I would run around in Norfolk with a rifle taking verbal abuse from over zealous Corporals and Sargents. I dont why but they seemd to pick on me( they didnt like the way I spoke or something). I was having a a good day out happy for I knew I was not frittering my money away at the weekends.

I bought my first house in 1986. Within 6 months I had a second and my destiny was set. I was playing monopoly for real at last.
The point is that I have long since been in a state of semi retirement "doing what I want to do and being what I want to be and nothing means a thing to me at all" (Kristofferson again).
Am I disproportionately wealthy according to that guy in the Guardian? Probably not among the upper echelons of Property118 Landlords but very much so in comparrison to very many people who have stayed in Jobs all their lives. I consider my result even stacks up reasonably against a certain late comedian.

So yes I have got a result.
I am worth it.
I have worked weekends and bank holidays. I have even got off a train on the way home in the evening to paint a kitchen as my final task for the day. I have been into meetings with unsavoury tenants with an iron bar under the settee just in case..... I have had one tenant die. I have run properties at a loss. I have suffered the high interest rates of the late eighties. ( Actually that is where some TA para mentality came in usefull. ie the will to "Dig in and hold a position).

The road has been long and rarely rosey. I persevered and succeded. Whatever I have, I have earned through my own energy and labours.

I wish more people understood this. I think a lot of people are just jealous. I reckon:

"If they new how we do it,
you could bet your life,
They'd be doing it as well"

instead of whinging at the success of others

Have a nice day. I am off on holiday....... Read More

What am I missing here??

A landlord wants to get rid of his portfoilio due to adverse tax.

It seems to me he has to sell it. (He cannot just leave it empty and walk away with no repercussions). Somebody buys that portfolio. They cannot just leave it empty and hope for price growth as they will still get taxed on a benefit in kind. So they can either live in or rent it. In either case the house has not vanished it is still in the housing stock. Perhaps someone has bought a home to live in for a little bit cheaper than was possible in the past. Is that bad? It will mean a reduction by one in rental demand. If he rents it then there is no change to demand/supply. The rent might go up a bit but only if the market will stand it.
I struggle to understand how portfolios being sold on mass is really going to effect demand and supply. These properties will not simply vanish.
This was the very point made in the radio interview with , I think Eddie Lester (or maybe Nester) The person being interviewed had no convincing answer.

I feel this is perhaps the real reason why the government feels no need to repeal s24.
Assuming I am missing the point somehow, could someone perhaps enlighten me.

Thanks.

Chris Unwin... Read More

Like so many other Landlords I have been pondering the longterm effects of the Section 24 Tax changes to me personally. I ruefully came to the conclusion that for the first time ever I would have to pay for some advice. Mark struck me as an individual who has walked the walk rather than just talk the talked so it was an obvious choice for me to sign up for one of his consultations. I took the opportunity of meeting with Mark whilst on holiday in Malta. The meeting was relaxed and one key question was answered.... to incorporate or not right now. A stratetgy for the future was discussed and that has now moved on to the implementaion phase. In passing Mark pointed out one small and obscure error in my annual tax return accounting practices (Thankfully the error had only been short term but would have gone on much longer if not spotted). It won't be many years before a correction to that error will pay for the consultation and the weeks holiday in Malta. So all in all, largely thanks to Mark I am feeling pretty comfortable with the tax changes ahead and how to deal with them. Thank you Mark.... Read More

A crucial point it seems to me has been made by Puzzler above.

I would be very weary of claiming space in my main residence as office space in order to save a few bob on income tax. If the house price rises rapidly for any reason and you want to sell you could possibly find that the extra CGT you have incurred will be far more than the few bob you have saved by claimimg relief on an office.

This is how it seems to me but I would be very happy to be proved wrong.... Read More

Thanks to everyone for your replies. To clarify, I did not take any advice but acted off my own bat when I took out the SIPP. I made a small contribution to the SIPP initially just to see how the whole thing works and to get some confidence in it before making a bigger commitment. Dissapointing as it that it seems my tax pounds are not as good as someone's tax pounds who is in employment, the outcome that I can at least pay in £3600 gross and get tax relief (x2 as I can do the same for my wife) is some small result so the whole exercise has not been a compete disater. At the end of the day I will be claiming back some £700 of my taxes which cant be bad. The net result is that I can 10 years growth from the Stockmarket on my sipp before thinking about drawing any pension at age 65.

There is another aspect to pensions in general in the post clause 23 world. When I was a boy I had a job (I knew no better) and my employer made payments into a DC pension scheme for me. I have seen this grow over 25 years and it is now a very healthy sum. Heres the catch. As a reasonably successful landlord, Mr Osborne has made artificial higher rate tax payers out of both myself and my wife when under the old rules we were not . So should I try and access funds from my occupational DC pension pot (I am over 55) any money I take after the first 25% will be taxed at 40% when under the old rules I feel I could have managed the withdrawls to keep my tax rate at 20% if I so chose.

So I reckon I have been well and truly shafted on several fronts.

Thank God I did not vote Tory last time....... Read More

Thanks but already got them down from 100k... Read More

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Thanks Mark and Jon,

The longer term plan is to make further acquisitions at about the same price over the next year so to end up with 3/4 properties in the company and then to graually sell off the non company properties as and when circumstances dictate or require.

The rent is £7200 pa. The annual expenses except mortgage interest are about £2200 pa. I will still be paying £3325 interest on the remortgage of the previously unemcumbered property in London.

Given that I am a higher rate payer already, Then I will pay 40% of (7200-2200)=2000 but get a tax rebate from the remortgaged property of £665 making my net gain of
5000-2000+ 665=3665 or about £300 pcm.. just enough to pay the new mortgage on the previously unemcumbered property in London.

Any comments most welcome

Chris... Read More

Hi Neil. Thanks for that. What I am really keen to be able to do is to get the date for a specific address...just the number of police call outs and not the reasons.

The reason is that I have my eye on a castle of a place and have become unnerved by the recent appearance of a "Beware of the dog" sign even though there is no dog at the property. I realise the possible deterrant value of a sign even without a dog but also 100 meters up trhe stree I noticed a group of bare footed eastern europeans loitering and came to a conclusion. The place in question is out in the sticks so presumably it is on the radar of local hoodlums. Chris... Read More

Another example of a dodgey tenant trying to defraud his honest reputable landlord and seeking advice from a landlord support website on how to do it. Hilarious!... Read More

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Hi Mark.

Thanks for your reply.

To spell it out then is the net result after 4 years that when I do my tax return I will not be able to claim any buy to let interest at all as an expense?

Thanks

Chris... Read More

Hi.

I am a small landlord and am becoming concerned I have completly misunderstood the the budget changes.

Reading the articles above it seems to me that mortgage interest is not now an allowable expense at all. I understood it to be restricted to 20% so if you are not a higher rate tax payer you are not affected. Am I wrong to think that if I have 100k of rent, 10k of expenses and 30k of Mortgage interest then my profit will be 100k-10k -30k=60 k? This will be split between myself and my wife leaving us under the 40% tax threshhold. Ie no change, for us at least.

What has aloso come out but not mentioned in the news is the removal of the 10% wear and tear allowance which will have a huge impact on all landlords. (very nice it was too)

When I was a boy in 1986 I bought my first house. A year later I bought my first buy to let under a conservative government. I then had to sit back and watch the government which I had voted for persue a ruthless policy of "shadowing the mark at 3.0" regardless of the damage it did to business and individuals. The result was that interest rates went from 11% to 15.7%. I came within a whisker of loosing my house. I then realised that the conservative government was not for the small business man and I took a solemn oath never to vote for them again. So in the 2015 election I was tempted to vote for them but I I never forgot the lesson they taught me in the eighties and so in spite of the recent hammering on the buy to let market I can say to myself "At least I did not vote for them" The moral of the story is that governments and in particular conservative governments cannot be trusted. Never vote for a government promising 12billion worth of cuts and taxes without them specifying exactly where it will come and then dont believe them

As I write this I have just passed my 55th birthday and had been fine tuning my portfolio for retirement and now have to deal with all these adverse tax changes.....

Chris Unwin... Read More

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I have a simple question . Is it possible for an owner to place a property on Zoopla/Rightmove themselves and avoid the rather redundant attentions of an Estate Agent.

I did successfully sell a property in France in France using only a Property Website..

Thanks... Read More