Summer Budget 2015 – Landlords Reactions

http://www.ft.com/cms/s/0/10e71fca-1036-11e5-bd70-00144feabdc0.html#ixzz3um9ypCBB

Lots of people below have pointed the economic madness of this policy and they're right but sadly that assumes that solving the housing crisis is the goal.
There are 2 large factors at play as to why this is not the goal....
First is is a massively cynical attempt to get public stock into private hands (the tory way) even though it costs the taxpayer more in the long run and disincentivises housing associations from building more houses - i.e. the exact opposite goal of that public policy statement.
As per all these policies where things are stolen from the public purse and given at discounts to cronies, a certain amount of 'dressing up' (blatent lies to you and me...) is required and pretending its really for the people is a good distraction. Google Charles Gow or Ian Gow to see how these properties made it from poor residents (who couldn't afford to buy but were given a cash bribe to do so) into the hands of rich landlords (Tory MPs). There is likely a hidden market (that will have well covered tracks) between rich landlords and the poor people living in these houses where the rich landlord will fund the purchase and they will split the difference. half of 100k to a poor person is a lot of money and a rich landlord gets a captive tenant and a 17.5% discount on a house. Great. Yet it does NOTHING to solve the housing crisis.
Again if you assume that the myriad of groups who have pointed out the folly of this proposal (which is everyone from punters to economists to experts on all sides of the property markets) have been ignored because their message wasn't well understood then you assume that there is some flawed logic at heart rather than vested interests. How nice to blame simple incompetence. Sadly its a money chain that has Tory MPs at its heart.
A Second more important factor is more structural. Its ludicrous that everyone has to buy in this country anyway. Most countries in Europe are happy not owning as they have decent tenant rights. People wouldn't have been so obsessed with owning if we had these and Tory govts hadn't been pushing buy buy buy for 40 years now.But left to its own devices and better rights for people we might see an end to the sensless race to buy houses and this has a major impact on the economy.
You see money isn't worth the paper its printed on in the UK these days. The old 'Sterling' promise to exchange notes for Silver was dropped years ago and in reality Gold was dropped with Bretton woods in the 70's. This was probably (maybe) a coincidence but a Tory govt started to push people to buy houses just as commercial banks were effectively printing money (outside central bank control) via its lending and borrowing, using the new found Derivatives to package and sell these (allowing them to scale up massively). This is Fiat money (worth reading about as historically it has ALWAYS ended badly) and with sterling no longer having an asset backing meant money in the system expanded massively since the 70's. As a result forget about all the inflation crp you read about in RPI CPI as money has expanded from tens of Billions in the 70's to 2.3Trillion today. How did this money expand so much ? - through mortgages which were artificial amounts banks could lend (with no backing other than derivatives) which let to a massive expansion in the money in the system (with no expansion of real assets). Hence as banks wanted to create more money through lending - Mortgages took this up slack and, combined with a govt sponsored shortage of houses and disincentives to stop building, forcing people into a race to buy, house prices (as boosted by ever larger mortgages) went up.
The illusion was people got rich. But look at house sizes. We have 4 million Pound 2 bed flats these days! This is not material wealth. Its pretend wealth in a worthless currency. If you want to actually measure this then you need to look at an asset that is truly restricted and has therefore been used as a traditional hedge against money inflation - Gold. Compare Gold with uk houseprices since 1971 and the charts are parallel. (I.e. houses are really at the same price as they were - just that sterling has devalued). And how fast it has devalued as thats the amount your wages have devalued despite that your asset prices are fixed.
This is really whats happened - fiat money has expanded the money in the system - banks in the middle syphoned off lots of this and people feel richer but banks got rich at our expense and we are living in smaller houses, feeling forced to buy as the race continues yet we are poorer in real terms as our money has devalued. This is why the UKs only real industry is Finance and heres the problem.
If the UK govt actually intended to fix house prices by building more, fixing tenants rights and accepting that people might rent with no obligation to buy, the whole money system based on Borrowing (2/3 of ALL of which is Mortgages) would collapse.
How can they really fix this ? If we don't all buy into this Ponzi scheme sterling collapses!...
This is why its better to make brazen lies and pretend its a strategy....

Reply to the comment left by "Ros ." at "19/12/2015 - 12:42":

I would add that had this Kingman guy expanded on these ideas and tried to develop them into a PhD he would have failed abysmally as they would have been ripped apart within seconds. Just as Professor Booth points out that the premise behind C24 is the type of mistake a University undergraduate would make. Taken together with Osborne's history degree, we can see that financial policy is being decided upon by people with no idea what they're doing.

For a party that supposedly upholds family values, they seem completely ignorant of the fact that their policies rip them apart.

http://www.newstatesman.com/politics/economy/2015/10/ignore-spin-social-housing-still-under-threat-conservatives

Reply to the comment left by "Ros ." at "19/12/2015 - 14:10":

Clowns led by donkeys, or completely the reverse?

Hi all, Ive read a lot of this post but not all 665 pages yet. Ive been posting on some Facebook groups.

Im a highly geared landlord with 40 properties (LONG story..for another day).
Under the new changes I will need to find an additional £19k pa from money that I dont have or wont have earnt. (Lots more details if you like!) It is very likely that like lots of other landlords that I will be forced into bankrupcy. I live in South Wales which is a million miles away from London in property terms!

Im fed up of hearing ways to 'solve' this problem by incorporating, selling etc etc. I planned this as my pension I dont want to be forced into doing anything, and I dont have funds for expensive solutions that might be unwound next time around!

Where are we as a group actually FIGHTING THIS unfair, immoral, extortion, instead of looking for ways around it. Im led to believe the petition needs to get to 100k by the end of Jan for a parlimentary debate, is that true?

Ive heard rumours recently, but is anyone challenging the legality of these changes, taxing a debt for example?

I just need to be brought up to speed and id like to know what I can do to help. Ive already written to my MP like others. I have not had the set peice reply yet!! Thanks

Reply to the comment left by "Appalled Landlord" at "18/12/2015 - 22:28":

Great post Appalled Landlord

Reply to the comment left by "Rhys Jones" at "19/12/2015 - 14:36":

The petition needs to reach 100k to be CONSIDERED for a parliamentary debate. Only death and taxes are certain.

Reply to the comment left by "Rhys Jones" at "19/12/2015 - 14:36":

Hi Rhys. Welcome to the thread. I, too, am in South Wales. I believe you will be hearing about concrete steps we have planned very soon and we will need all the support we can get. Watch this space.

Reply to the comment left by "Rhys Jones" at "19/12/2015 - 14:36":

Hi Rees, welcome, from another new kid on the block. I doubt there is any chance of legally challenging what democratically elected government with a huge majority ( about 12 isn't it?) brings in.

Even if we gotten a parliamentary debate, not a big chance of any change, GO has said so. So as Change is unlikely, we Adapt, or Suffer.

Adapt is the only option the PRS HP (Housing Providors) would choose, and at the moment we can. When the Corbynistras and his Unions are in charge, things will really change.

@ rents pegged at 1980 levels,
@ right to buy from your landlord at 70% discount if you've been there for 5 years
@ no evictions unless you are more than 5 years in arrears.

Then there MAY be grounds for challenge under human rights deprivation of assets.........

So I think you must consider Adapting. Like:
@ Reduce gearing by: Selling some properties with tenants as investments to cash-rich sub 15 PRS HPs. Or 15 + property corporates. Or issues s21 to sell with vacant possession to maximise value and avoid enhanced SDLT.
@ refurbishing to a higher standard, to charge rents that make an economic return. That is commensurate with any other business, not a killing, just fair.
@ let out as holiday lets where appropriate.
@ become a Ltd. co. if that DOES achieve the desired aim
@ combine with others to make an Investment Trust (I'm out of my depth on the technicalities)
@ QNUPs

@

Reply to the comment left by "Chris Byways" at "19/12/2015 - 16:16":

Hi Chris,

New boy on this block but Ive been around other blocks a few times!

I appreciate that there are some measures that can be taken, but frankly at this time i dont have those options, and as i said earlier this is my business, my pension, my way to repay investors etc etc and I resent being put in a position where if I cannot release any equity because i dont have much if any. The Chancellor can dream up some scheme that requires me to pay £19k YES £19,000 MORE tax because he decides to tax my mortgage payments. How can anyone just do that its so immoral!

I am pretty fair, if something is introduced that is fair even though I dont like it, I will accept it and run with it. If GO in his wisdom introduced a 'Landlord Tax' of say £5000 pa, we might not like it but it would be fair for all landlords.

Most landlords are not in my position. I can tell from the other forums that people have either not worked out their new proposed tax, or they only own a few properties and are not that much affected.

I'm REALLY not in a position to make any drastic changes. We HAVE to stand up to this dictator somehow not just accept it, which is what most people are doing. If it really gets to the stage where I am expected to pay out 3 times more in tax than I have earnt, there must be a judge that will look at the complete lack of logic, the unfairness because it creates so much more harm that restricting tax relief for 40% tax payers to 20% which is what this was meant to achieve..yeh right!

I actually despise this man for what hes trying to achieve here. This farce will potentially wreck lives and business's its not just politics!