Summer Budget 2015 – Landlords Reactions

Yet another regurgitation of what we all know, and Collinson doesn't fully appreciate London and rest of E&W are not the same.

http://www.theguardian.com/business/2016/jan/18/jump-two-bed-flats-for-sale-landlords-selling-up

"Countrywide research director Johnny Morris said: “2016 looks to be a complicated year for landlords. The additional 3% stamp duty charge, stricter regulation and changes to tax relief from 2017 onwards will all take their toll on investor sentiment and impact behaviour.

“With stock at a premium, the smaller landlords who decide to sell up will add upward pressure to rents, although any rises will be tempered by affordability pressures.”

http://www.telegraph.co.uk/finance/comment/12104608/Osbornes-stamp-duty-rises-threaten-to-tip-property-market-over-the-edge.html

An unintended consequence, : it is counterproductive, tax receipts fell!

"
When George Osborne, the Chancellor, announced a steep rise in stamp duty on residential property in December 2014 he might have anticipated a quick, easy win: cooling a hot market at the same time as tapping into a juicy new source of tax revenue.

Unfortunately, Land Registry data by Savills shows an 18pc drop in receipts in the first eight months of 2015 against the previous year, meaning the Exchequer is set to receive £870m less from stamp duty last year.

There are also other unintended consequences of the stamp duty hike, including profound implications for the development of new homes at the lower end of the market"

Reply to the comment left by "Chris Byways" at "18/01/2016 - 21:57":

Hi Chris

Thanks for the link.

Bruce Ritchie also wrote: “Many developers “forward sell” developments to buy-to-let investors years in advance of completion to provide cash flow to build that development and to meet their banks’ required pre-sale percentage covenants. But first-time buyers cannot commit or wait for years to buy these properties because mortgage offers only last an average of six months.”

I would be very interested to know what effect Clause 24 has had on developers’ forward sales.

Hi all, please can you take a few minutes to read Mark's latest article and sign the new petition: http://www.property118.com/increase-housing-supply-tax-regime-comparisons-for-landlords/83569/

The below important statement from Steve & Chris has just been posted on to the Clause 24 Facebook page:

"We are pleased to report that the judicial review of section 24 of the Finance (No. 2) Act 2015 has a “reasonable chance of success” according to our legal team, which includes Cherie Blair QC, Connor Quigley QC and Sarah Hannett.

The next step is for our lawyers, Omnia Strategy LLP, to send a letter outlining our case to the Government with a view to commencing judicial review proceedings. We will continue to update our funding partners and supporters on our progress in this matter. We expect the letter to be sent next week and will provide a further and more detailed update in the near future.

We will also be in further contact with key decisions makers within the various landlord, property, accountancy and other organisations to explore areas of common interest.

Your continued support and patience is both appreciated and welcomed.

If you have any questions or constructive thoughts, please leave a comment and we will answer you as quickly as we can. Thank you.

Steve Bolton & Chris Cooper"

Reply to the comment left by "Appalled Landlord" at "18/01/2016 - 22:29":

I hadn't thought of that additional retrograde effect on house building, just another drop of adverse benefit to housing and house builders.

In total, the effects will be substantial on housing. A little unpredictable.

Minute in the greater scheme, but I was contemplating bidding on a couple or so low value units coming up for auction, but I have no appetite, even though they would be below the SDLT threshold. The tenants won't buy them, that's for sure. So they will probably stay in the rather squalid state they are in. But no matter for me, but if that is the sentiment of just 1 in 20 prospective housing providers, the fine balance will shift substantially more than Gideon intended. I would be inclined just to hold on to what I have, buy if there was any dips in prices (unlikely), but with the anti rhetoric, not be tempted with less than clear 10% or better aim 20% ROCE going forward. IE buying and flipping........

Gareth, yup, btdtgtts.

Nb anything I say may be taken down and used against us on HPC. ?

Just wondering. Do you have to pay SDLT for a parking bay?

Daft question, but when it costs £350,000 you do have to consider the pennies. And that's just for an 88 year lease.

http://www.rightmove.co.uk/property-for-sale/property-52721632.html

Reply to the comment left by "Gareth Wilson" at "18/01/2016 - 23:35":

Full steam ahead!

Reply to the comment left by "Chris Byways" at "18/01/2016 - 23:55":

Why bother with a parking space, £350,000 plus SDLT plus purchase expenses plus the cost of buying and running a car would probably get 88 years worth of taxis. And the big plus no congestion charge - no parking fines - no speeding fines - no responsibility - allowing you to concentrate on paying your C24 taxes.

Reply to the comment left by "David Price" at "19/01/2016 - 00:21":

Buying the right car spaces CAN be a shrewed move or a disaster. Many of the promoted "investment opporutinites" turn out to be green fields of doubtful value, capital or rental.

I have been buying the last few secured spaces from the developer of a prime city centre apartment building (the lease requires the ownership of an apartment).

The purchase price attracts VAT but will generally escape SDLT.

If you structure it correctly it is possible to register for VAT and gain "partial exemption" meaning that in the tax year of purchase a landlord can reclaim input VAT on other wise exempt supplies proviidng the annual claim meets the "de minimis" requirements (essentially a reclaim of exempt supply VAT of £7500 and not more than 50% of total input VAT). The purchased spaces must be rented to other than your own tenants and VAT must be charged. It can be a hassle but the cashflow advantage is collossal. We are in our second year of doing this.