Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "Mark Shine" at "01/12/2015 - 18:52":

Very well put Mark. David, thoughts please?

"nevertheless is his comment an admission that he realised that Clause 24 is not fit for purpose or fair?"

My sentiments.

If you ask me Osborne is a bit of Pri**.

More than often he contradicts himself as indicated by Mark Shine. As he knows full well that, they (Tories) have formed a government single-handedly and as there is no Coalition, hence, he is free to do what he wants.

I was not fan of Nick Clegg but had he been around in case it was Coalition Government, he would not have allowed this madness.

The tax grab is to enable to governement to be 'seen' to help FTB's get on the property ladder - if anyone has read the Evening Standard this evening they will know that the government are looking to help FTB's with a 40% deposit boost by lending the buyer an interest free loan. The downside is that the government own 40% of the property so any increase in property prices will mean that the buyers will struggle to afford their next home. If prices fall they will be in negative equity and won't be able to move house either. If they start a family there will be massive overcrowding and this will put a strain on social housing.

The conservative government sold the dream of home ownership in the last century and as a result had willing buyers for the social housing sell off - and it's selling the dream again. What they didn't do then was forcee the private landlord into bankruptcy.

I'm not sure what todays buyers are expecting but they won't be getting extra cheap property in the best part of town and they won't be getting cheap rents. In the meantime rents will rise way before the unfair tax really kicks in and when they do rise, limited companies will join in. I think that there will be more tax hikes and rent caps after 2021 and I also think the bias against smaller limited company property portfolios will increase in order to wipe out those too.

This interview on the budget tax changes is worth a listen.

http://www.propertytribes.com/landlord-43-years-tony-altman-shares-secret-his-t-127622736.html#pid243928

Reply to the comment left by "Tracey Hoad" at "01/12/2015 - 20:10":

Supply and demand clearly shows us rent wil increase , why some idiots think LL will not have a ready supply of tenants who can and will pay higher rates is crazy. Any shrinkage in the rental stock will magnify this effect.

Those sat there thinking the are going to buy a prop at 10-50% discount are going to be very dissappointed.

As prices go down - yields go up - which will attract more investors, spoke to my solicitor today - 11 BTL instructions in 1 week due to stamp duty news last week - unheard of figures for a small practice !

As for rent rises of 20% over 5 years ...i am getting it in one move, and now - with several properties. I am explaining exactly why it is increasing, i closed one tenancy on freezing the rent for a year at the +20% rate if they signed last week and for 12 mths not 6mths.

In the real world LL are consolidating and reacting quickly.

There are many micro markets within BTL localities to be considered carefully.

The one place I see big trouble, is prop with only LHA potential tenants - these need careful consideration as to wether they should be offloaded and something more stable introduced to portfolios. Even at HMO level (LHA)- i cannot see enough future flexibility to manouvre out of potential trouble with these props.

Reply to the comment left by "Appalled Landlord" at "01/12/2015 - 15:54":

Oh I see! I will add that to my spreadsheet too!

Regards,
Mike

Reply to the comment left by "Saeef Khan" at "01/12/2015 - 19:43":

Recently, Private Eye (No. 1404) had a little bit about a company called Osborne & Little which hasn't paid corporation tax since 2008 and even got a rebate of over £12k for 2009-2010 through some clever accountancy. It is owned by the father of someone called George Osborne who owns 15% of the company.

I would love to know who their accountant is because I am paying more corporation tax than they are!

Reply to the comment left by "Mike Smith" at "01/12/2015 - 21:06":

Mike,

Mike, I have heard that, Osborne paid around £437 in Tax on his millions of £'s worth of assets and income last year. Apparently he has organised his assets in very complex offshore entity which means although he resides and owns assets in this country but his asset's equity is assigned to foreign entity which exempts him from paying any taxes.

These rules fall under, Law as opposed to taxation therefore they are accessible to those who are filthy rich like Osborne.

Reply to the comment left by "John McKay" at "01/12/2015 - 18:27":

I think osborne knows exactly what he is doing.

Incorporation of landlords will definitely raise the accounting standards and tax paid, as corporations have less room to "forget" filling a self assesment on a single buy-to-let, which is not the main source of income. Also any HMRC raid held at a big company might cause less negative reputation than doing the same thing at the average joe.

But the main reason might be that osborne does not want to help out banks again if things go wrong (thats why we have these stress tests too). If every average joe has a BTL property and things go really wrong, banks will take everything including main residences and families will face evictions - he cant let this happen, he will be forced to pay extraorbitant amounts again on bailouts.

However, if most buy-to-let houses are in ltds, personal wealth is separated from business activity, main residences and personal assets are safe. A few businesses might go bankrupt but that is really not a huge deal, it's just a few people losing their income, that happens every day.