Summer Budget 2015 – Landlords Reactions

Article from Phil Spencer, lots of words that doesn't say anything. In my opinion.
http://www.thisismoney.co.uk/money/mortgageshome/article-3247632/Buy-let-tax-game-changer-not-building-homes-TV-star-Phil-Spencer-property-market-trends.html

Reply to the comment left by "Mark Shine" at "27/09/2015 - 20:38":

Good work Mark.

Is David Gauke the monkey or organ grinder in this?
was he listening when you met?

Reply to the comment left by "Mark Shine" at "27/09/2015 - 20:38":

Hi Mark S

If by “phasing in” in paragraph 5 you are suggesting that my mortgages are converted to repayment, this would bankrupt me, as I have posted previously.

For me it is a Landlord Tax (or a Landlord Mortgage Tax), but as with all expenses it needs to be taken into account when setting rent levels and if the returns justify the investment.

As to what is the right phrase to generate support, it depends who you are targeting, if tenants then perhaps tenant tax is right. If other landlords who are not aware of the impact on them, then in my view it should be something with Landlord in the phrase.

Also I do not think this is over when the finance bill becomes law. I tend to think that part of the reason for phasing the change in is to see what impact it has over the next 18 - 24 months and there may be further changes to this tax.

Reply to the comment left by "Appalled Landlord" at "27/09/2015 - 21:22":

Hi Appalled

By phasing – I meant in a way that would not unnecessarily bankrupt anyone.

For example *IF* after consultation the BOE conclude that highly leveraged BTL mortgages are a genuine risk / impending threat to the UK’s financial stability, then they could phase it in over say 4 years with something like:

- Year 1: For any mortgage above 85% LTV, the proportion of that mortgage that is above 85% to be converted to repayment, whilst the amount below 85% can still remain as IO.
- Year 2: For any mortgage above 80% LTV, the proportion that is above 80% to be converted to repayment, whilst the amount below 80% can still remain as IO.
- Year 3: For any mortgage above 75% LTV, the proportion that is above 75% to be converted to repayment, whilst the amount below 75% can still remain as IO.
- Year 4: For any mortgage above 70% LTV, the proportion that is above 70% to be converted to repayment, whilst the amount below 70% can still remain as IO.

Reply to the comment left by "Mark Shine" at "27/09/2015 - 23:02":

Hi Mark S

To pass the proposed levy on to my tenants I need to increase rents by 3% each year from 2017.

Quite apart from the subjectivity and cost of annual valuations, having to repay 5% of my loans every year would equal 80% of rent I receive, and 230% of my rental profit. It would bankrupt me.

Your cure is worse than the disease. In the words of Samuel Goldwyn, include me out.

Reply to the comment left by "S.E. Landlord" at "27/09/2015 - 21:41":

I am not sure about the phasing rationale and I and most i guess, will need to have have made decisions an started action on those decisions well before the Tenant Tax comes into effect.

I am not so sure support is what i am looking for here.. it is engagement!

Landlords who don't know..?. I have no clue what to do... save get tenant Tax in the press and them read the press. Tenant tax will get this from the finance pages to the pages that get read.I think lenders must surely start to make their borrowers aware as they will know the impact puts themselves at risk of having BTL defaulting all over the place and if not then, then when lenders shares start getting looked at re closely... BOE are already making noises that the city will not like in connection with BTL lenders. Pension companies and big investors will also get involved when lenders shares start to fall.......

One can disagree or agree / support or not support everyone needs to engage and act. Weather you are a landlord or tenant or have any skin in the game in any way at all, it will affect you! - mortgaged or otherwise.

Seems like tenants in some Property118 landlords houses are going to become homeless soon and so they will displace other tenants from unmortgaged LL's. LL's will jettison "Grade C" tenants for "Grade A" tenants and landlords with cheap houses will get full. Cheap renters will need to find more money and rents will rise as result of the Tenant Tax and greed / opportunity.

Like a convection current Tenant tax will effect air sea and land & you are going to get a bit of the Tenant Tax when it hits the fan - like it or not! Anyone who thinks they are unaffected will have a rude awakening. I might be utterly wrong.... but Tenant Tax is the strap-line that engenders - for goodness sake engage have a look, talk to someone, think! understand and then, and only then dismiss - don't not engage...

I think Tenant tax is correct as i don't have another income so it is coming from tenants or from nowhere. Tenants are younger activist consumers (and others of course) and so are loud and will be heard - Landlords are demur and introspective... Tenant Tax in the right hands is emotive enough to generate volume, generate debate, require debunking and at least get people to read the second line and be alerted enough to do something.

Reply to the comment left by "Appalled Landlord" at "27/09/2015 - 23:51":

I was not in any way suggesting "having to repay 5% of loans every year". I was suggesting converting 5% of an interest only mortgage to repayment (monthly repayments over x years). There's a huge difference.

And I was only suggesting it IF the BOE etc etc... as I mentioned

Reply to the comment left by "Mark Shine" at "28/09/2015 - 00:18":

I see.

I would have to convert 15% of the debt to the repayment basis over 3 years. After that, half of my (current) profit would go in repayments, every year. That would be difficult for me now, but if interest rates go up in the meantime I might not make enough profit to meet the repayment obligation, and so I would be in default. This proposal is not to my benefit.

The Conservative Party emailed me asking me to complete a short survey. It was really just 4 or 5 questions about why I'm not yet a member.

Anyway there was some standard tick boxes and then a box for other. I used this other box to briefly explain that the Landlord's Turnover Tax was a massive lurch to the left and is the reason I will now NOT be joining them. I just thought someone might take notice if they get loads of similar responses.

The Party Review Survey can be completed here https://www.conservatives.com/review