Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "Dom " at "02/09/2015 - 16:12":

Hello Dom,
I love the 8th line up from the bottom of your post which is from David Gauke and I quote:

"Landlords should be allowed to claim tax relief on genuine expenses that they incur"

Just what the hell does he think the interest that we pay to the finance companies is? GENUINE EXPENSE!

Reply to the comment left by "Jim S" at "02/09/2015 - 19:34":

Agreed Jim. It's incredible how they try to suggest otherwise!

BTL RELIEF COULD BE A STEPPING STONE
The government's changes to high rate tax BTL relief could be a stepping stone to a wider crackdown in the years to ahead Chase De Vere's head of communications Patrick Connolly has warned.
Connolly has suggested that the government could cut tax relief for people paying basic rate tax as well as higher rate earners to give people buying their homes an advantage over investors
Under the current system investors can claim back up to 45% tax in mortgage interest costs but by 2020 the amount claimed will be restricted to 20%
Connolly and property analyst Kate Faulkner are currently in collaboration to research the merits of BTL compared to othertypes of investment.
He said it wouldn't be the greatest suprise if at some point all landlords were unable to offset mortgage interest against their income.It would be dangerous strategy to do it all in one go.
The political way of doing it is in phases so start with the higher earners and widen it out.
Faulkner agreed that the government has been clever by encouraging people to invest in other areas of the economy rather than property.
She said " Restricting mortgage tax relief is going to cost some people thousands and most who invest in BTL are high rate tax payers"
What they have done is to make other forms of invest more attractive-it's quite clever
20% of landlords currently don't earn any income from BTL so by 2020 it's going to be tough for them to break even
Connolly also reckoned too many people have used BTL as a get rich quick scheme
He added "The government has been supportive of the residential property market but they also wany people lookant to support people in buying their own homes
That's more difficult when there are so many BTL properties which have pushes up property prices over the years
" I would argue that there are too many people looking to invest in BTL
"With the changes ahead i would warn people looking to invest in properties to do so with their eyes open"

Reply to the comment left by "Roger Rabbit" at "02/09/2015 - 17:49":

Hi RR,
Have you seen the flats that have been created in Stratford from the athlete rooms in the former Olympic village? The rent that is being requested is probably at least 20% more than the average for equivalent accommodation in that area. I think it is a very good example of things to come in the PRS. If I was a tenant, I'd be very concerned for the future. Even the comments on the Shelter Facebook posts suggests there's a major problem with Housing Associations at the moment.

Reply to the comment left by "Barry Fitzpatrick" at "02/09/2015 - 15:20":

Good luck with Countrywide Barry, I have emailed them twice and have had no response!

Reply to the comment left by "Roger Rabbit" at "02/09/2015 - 17:40":

I don't think big corporates are interested in sparsely distributed piecemeal portfolios (especially at current rental yields). They will simply develop the large brownfield sites coming online into purpose built estates where their centralised purchasing department and economy of scale can hammer out deals on products and services (bricks and labour) ensuring build costs are kept to a minimum. Operations and maintenance will also be cheaper as their onsite dedicated maintenance teams won't waste half their day travelling from one property to the next.

These developments will have their own shops, bars, and schools and will compete directly for tenants. Incorporated landlords may pick up a few properties as individual landlords sell but even these guys will struggle in the face of what the government wants, especially if basic rate relief is also removed (which, if it is, the only way to be a landlord will be to build).

I think the government's aim is to enable the large corporate landlord to drive costs down, essentially doing to the small landlord what tesco did for the small high street shop. However, in this case the large corporate landlord has the *explicit* backing of government and the government wants one built wherever they can.

" the small landlord what tesco did for the small high street shop "

Oh, noooooooo. I am already open all hours. The tenants call me late at night because they have lost their keys or had their hand bag stolen..

Reply to the comment left by "Barry White" at "03/09/2015 - 09:59":

Welcome to the new tenement ghettos of the twenties

I thought the letter from the RLA to the Government was excellent. God knows if it will have an effect, but I think they have made a very clear case. The link is here:

http://news.rla.org.uk/chairman-asks-chancellor-pause-for-evaluation/

Savills summary analysis:
http://www.savills.co.uk/research_articles/141563/189851-0