Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "Ros ." at "05/08/2015 - 22:27":

To shift away from the view this is just a discriminatory, illogical and badly conceived idea. An argument to which the government will pay little heed.

Acknowledge it is possible those round the table may have known exactly the impact this has. It is very precise and looks very targeted.

To move to an understanding debate on what the government believes it is trying to achieve and then understand how those concerns be addressed in other ways.

Clearly there are concerns about the finance model bring used. Leveraging to a level is an acceptable business risk. To the extent some have gone is speculative and impacts on the housing market.

There will be differing views on whether that impact is positive or negative thing. But there are political pressures at play too.

The other option is to keep believing that no one else gets it or is jealous.

My comments on the efforts behind the petition have been positive.

Reply to the comment left by "kathleen drea" at "05/08/2015 - 10:41":

Hi Kathleen

I meant to reply earlier but had to deal with Entrepreneur first, then work got in the way.

Your proposal would save the bacon of the couple in the example with the large portfolio who only make £50,000 profit between them and have no other income.

It would also preserve the man in Megan Shaw’s example – unless he gets a pay rise. If his salary increases by more than 4.5% in the next 2 to 6 years it would make him a higher rate payer.

Paradoxically, this man with one property would then pay the levy on his finance costs, while the couple with over 30 times as much interest would not.

I don’t think we should be suggesting this. Besides, to quote a well-known politician “We are all in this together”.

Reply to the comment left by "Ros ." at "05/08/2015 - 22:16":

I do hope you are right, though I smell a rat!

I think this has been planned way way back, before the election when the government was a coalition. I think they knew they would get opposition so held off. This 'revolutionary rental' build to rent or whatever was not thought of just last week. There has been planning and numbers and expected cash flow and consultations with huge companies and developers, and creation of reports (surfacing now). The relaxing of pensions rules was not to enable pensioners to dabble in buy to let; I think it was in time for this 30bn innovation. Pensioners are also cash-rich; any source for the government.

The BOE warned that personal debt was spiralling and not good for stability. However, buy to let has been going on for over twenty years. The low interest rates baited more landlords in for almost four years, ready for this tax. I do believe it was strategic. I think Osborne guessed the impact and will be seen to ease some of the pressure by offering something like a CGT holiday or stamp duty holiday as landlords adjust.

However, I want to be wrong.

I absolutely would love you to be right and that these Etonians do not know what they are doing and reverse their knee-jerk reaction, just as you say. I pray I am very wrong in all this; a paranoid and delusional conspiracy-seeker. Then I know we can win and I can sleep easy.

Hi Connie

I got my first BTL mortgage over 30 years ago, from the TSB surprisingly enough, in 1984.

Yes, time flies. I do remember all the Let and To Let signs in London when I was at Secondary school and not knowing what they meant. Yes, that was over 30 years ago! I keep thinking I'm younger than 42! 😀

P.S - Orwell gave us fair warning.

Perhaps we should fight this under one banner "UKIL" United Kingdom Independent Landlords.

In fact I will add a little more before I leave.

One if you said "I don't know WHY the government think this is a good idea" and that is the point I have tried to make. No attempt is made to understand contra views.

This buying a 100 houses, starting with a £30k deposit and leveraged is something they clearly want to stop. For both economical reasons and political ones too.

Maybe it's because of the following example:
The current 2m buy to let landlords decided to use the model and buy 10 each - 20m homes of the 22m now PRS. This ignores the leveraged examples of 50 or 100 houses.

I mentioned to tone down the 'increase rents' chants - hoped you might change it to being a very unwanted consequence rather than a threat. Demonstrate an understanding of the responsibility OWED to tenants under your stewardship.

Suggestions ignored......so if you are government and reading this thread, would that engender trust of private landlords or would it make you think they are not as balanced as you had hoped. It may re-enforce the need that this needs controlling and quickly.

Feeling more like a tax of leveraged financed used in housing and less like a tax on landlords everyday. Thanks for helping me understand that.

This is the wrong arena and audience to influence - but I think it's helped me understand the tax and now form a view.

Keep the victim approach going, re-enforce each others feeling of entitlement and remember guys - I just don't get it.

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To Adam Prospect,

I have not used leverage once. All my deposits are from savings. I will still be taxed in the same way, though. I may be able to restructure into a ltd company, though, because I'm such small fish, but there are still costs and 22k in stamp duty if I do so. However, this way I will protect my business and my tenants, too, as I want to keep my business running and keep my tenants.

The strategy you refer to was encouraged by all the gurus - a build a huge portfolio quickly strategy. I was content with just four flats in areas of high mobility and high rental demand. I was not competing with FTBs as they tend to go for houses. These property sales enabled two sellers to move onto bigger properties with their growing families.

Perhaps it is a tax of leveraged finance as you say, but it's a blanket approach that will affect indiscriminately. I only feel entitled to what I have worked and put in, try not to become bankrupt or lose my own home, as standing to lose 20 years of savings is very unsettling.

That's all.

Hi Adam

But if landlords were able to do the same via a limited company that would not stop the leverage. Obviously its harder to get finance and a higher cost plus larger deposit.

Costly for existing properties to be put into the company due to CGT and land tax ( which I believe is what the government is after, they need the money)

Mortgage companies would not want to lose the BTL business so will they not be looking at bringing out better deals for companies.

I cant see them giving a CGT break!