Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "Ros ." at "18/08/2015 - 00:23":

Hi Ros

This bit caught my eye

It should be borne in mind that the response to various forms of double taxation that are imposed on investors is normally the development of complex tax avoidance mechanisms. In fact, the most likely outcome of the Green policy is that there will be no new revenue for socialised housebuilding and a lot of revenue for bankers designing tax efficient funding products.

Reply to the comment left by "Ian Simpson" at "18/08/2015 - 07:48":

Hi Ian

I don't follow what you are saying either.
.

Housing minister Brandon Lewis has backtracked on suggestions that the government may introduce longer standard tenancy agreements in the private rental sector.

Back in September of last year, speaking at the RESI conference, Lewis launched the government’s model tenancy agreement, which went to consultation with the industry.

At the time he said: “Today we are publishing our own tenancy agreement which tenants can use to ask for longer tenancies from their landlord if they want to. These agreements will also benefit landlords. It allows them to avoid leaving their properties empty and pay fees to lettings agents for finding new tenants as often.”

However, in an interview in last week’s Sunday Times Lewis appears to have made a 180 degree turn.

Having reiterated his recent announcements and consultation documents on a possible blacklist for rogue letting agents and additional licensing rules to prevent unsafe and overcrowded homes, he categorically ruled out any longer standard tenancies.

“But he has no plans to bring in laws for longer tenancies” says Sunday Times journalist Martina Lees, who interviewed Lewis.

The quote from Lewis himself on the subject is: “If you get too much regulation in the [private rental] sector it drives down supply and in the long run that’s bad for tenants.”

The greatest drive down in supply will be not allowing mortgage costs as an expense!

Reply to the comment left by "Ros ." at "18/08/2015 - 08:11":

I would be interested in that calculation as well, something I can prod my accountant with. Me and math don't mix either. Not enough head space...

Reply to the comment left by "Ros ." at "18/08/2015 - 00:23":

Thanks for the link Ros. Interesting reading.

Just seen this!

As many as four million 18 to 39-year-olds are actively trying to purchase a buy-to-let property to cash in on the boom, new research suggests.

Almost half of young people believe that becoming an amateur landlord is the best investment available, according to new research by letting agent Rentify.

Many claim that pension freedoms are unfair on the younger generation because they have given the over-55s a one-off boost in buying power.

Now younger people are keen to jump on the bandwagon by purchasing buy-to-let properties as well.

George Spencer, chief executive of Rentify, said: "The fact that 49% of first-time buyers would consider investing in buy-to-lets is fantastic and shows that there are more options out there and more people who want to get on the ladder."

Growing interest from younger buyers would further fuel demand for buy-to-let, which is already outpacing the UK residential market.

Although there are fears that banks are set to crack down on the amounts landlords can borrow and insist they pass tough new stress tests.

With interest rates on buy-to-let driven to new lows, demand looks set to continue even though Chancellor George Osborne recently limited higher rate tax relief on buy-to-let.

Reply to the comment left by "KATHY MILLER" at "18/08/2015 - 08:50":

Thanks for that Kathy. I think they'd better be quick because they're going to find it really tough to get a BTL mortgage when the lenders clamp down due to the changes, if they come in.

The formulas they used to calculate affordability are going to be shelved and I can't see any way an individual will get such a mortgage without huge deposits. Wel... I say that, but of course rents will be on the way up soon anyway.

Hi Connie.
I saw your link yesterday to the Webinar last night but did not get a chance to watch it. Did anyone on this forum see it? And if so did they have anything useful to say?

Reply to the comment left by "KATHY MILLER" at "18/08/2015 - 08:50":

Hi Kathy.
I wonder how many of these would have a deposit and meet the criteria. Out of all of my houses, I can only pinpoint one tenant - who is about 27 and has a PhD in Chemistry and an income in excess of £2,000pm - who could be in a position to buy. The house he rents from me is worth about £100,000, and I think mortgage companies want a deposit of 20% for the best rates. I want to ask if he would like to buy the house, but have no idea if he has a spare £20,000 floating about and if he would want to settle in the area as he is from the east of England and he's a bit young to settle down; it would also restrict his job mobility. His mortgage payments would be around £325 per month and his rent with me is £485, but then mortgage rates are far more open to fluctuation than rents and he would have to pay for his own maintenance. Since he's been there, we had to put on a new roof, for example.
On the other hand, there are houses in the valleys which can be got for under £50,000. They wouldn't be in the 'good' areas and the new, young BTL landlord would probably have to let the house to tenants on benefits. And because they use the house more, I think the maintenance issues can be more expensive. And of course the landlord would have to be accredited and licensed in Wales - I don't know the details yet, but it will involve attending training courses - unless they give the small margin of profit to a managing agent.... I think these surveys should be taken with a pinch of salt. I might be asked - would you like to go and live on a treasure island for a bit? And I might say 'Yes.' (although the survey does talk about 'actively planning - but how much have they saved for example?)
Another interesting point though is how this move by GO is going to dash people's dreams of getting a BTL or two instead of a pension and/or escaping the rat race and being their own boss (I always hated having a boss - not because I was unruly, but because I was too sycophantic). So it is an attack on aspirations and closing a door for many people.

Reply to the comment left by "Appalled Landlord" at "17/08/2015 - 22:38":

Appalled, unfortunately, I'll have to disagree with you as phasing can be used for both new and existing.

Although, I can understand your argument, why would he go through phasing when he can slap full 20% from 2017.