Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "Eden Lan" at "19/06/2016 - 23:50":

It seems as if the government is back-peddling to level the playing field between individual and corporate landlords in the light of pending judicial review.

Reply to the comment left by "Simon Hall" at "20/06/2016 - 13:01":

If that is the case. The first two million pounds in interest (is exempt if I have understood it) should apply to us as well. I doubt it if any one of us paying two million pounds per year in interest.

Reply to the comment left by "Simon Hall" at "20/06/2016 - 13:01":

If that is the case. The first two million pounds in interest (is exempt if I have understood it) should apply to us as well. I doubt it if any one of us is paying two million pounds per year in interest.
Another thing I don't understand .Is it only for multinational group of companies or individual small Ltd companies based in the UK

I don't have the source document to hand but I know the Treasury has been considering interest dissalowance to combat profit shifting. Essentially, the paper was discussing the ways in which multi-nationals could invest in the UK in ways of their choosing without adverse consequences for the tax base One prosal was that interest WOULD be available where paid to an arm's length third party i.e. not "Starbuck's Inter-subsidiary International Funding Divusion B.V." It didn't seem unreasonable.

It doesn't take a rocket scientist to realise if they go through with this the economy will crash.

Reply to the comment left by "mark andrews" at "19/06/2016 - 18:28":

Debt and the impact it has on prices was always my issue. I doubt the forums here will acknowledge it.
Make no mistake rents will be driven by affordability rather than what a Landlord feels they need to charge. If rents do not cover the costs of owning - then the costs of owning will drop.
Warned previously C24 was the starting point - more will come with Basel III. You can't have £120k rent covering £1.6m mortgages. The multiples only work with low interest rates. I am assuming 10% pay rates. You can't have people paying these prices based on such low yields whilst a whole generation struggle to buy.
Interest rates may not increase for years but the government is worried about leverage and debt.
No need to build houses across the whole of the country just curtail lending or the desire to borrow and the supply and demand will balance out again.
More buyers will mean less renters so the rental market should stay static or at least fall back to where it was a few years ago...as will house prices.
Corporates next.....

Reply to the comment left by "adam prospect" at "20/06/2016 - 18:53":

"Debt and the impact it has on prices"
- I take it you are not saying this is not applicable to cheaper owner occupier debt?

"Make no mistake rents will be driven by affordability rather than what a Landlord feels they need to charge."
- Yes, but nevertheless do you agree that C24 may exert some upward pressure on rents? Many LL, myself included, rarely increased rents previously.

"No need to build houses.." "..rental market should stay static..."
- I take it you are assuming there will be zero population growth and also that FTB's will be snapping up sharer rental properties (ie HMOs)?

"Corporates next….."
- will believe it when I see it. Why 'next' as opposed to simultaneously. If the latter was done, then C24 would have perhaps been a little more plausible in July 2015?

"– I take it you are assuming there will be zero population growth"

330,000 net migration last year.

Let you know at the end of the week re inflow. 🙂
Assumption is BTL improves supply. BTL may buy most new builds but that drives prices. The threat of a 30% house price drop is no longer perceived as a negative thing by many.
Increasingly those with most influence, economically valuable and earning capacity (work earning capacity) are also those who have struggled or know others who have struggled high house prices. This was okay when it was an uneducated clerical worker......but that's no longer the case. It's junior doctors, solicitors, teachers and dare I say it - Young MPs. Politically this will have drivers.
Again for me, those LLs who feel victimised and do not restructure and reduce debt will be those that suffer most.
It has made things ackward for me and I have sold when I didn't want to. But I appreciate the tide of sentiment and the direction of travel. The predictions of doom and gloom re house prices is increasingly become a mixed message for many. Appreciate the corporate arguement made in this thread and again I think they are next. If you don't build what you own then the debt penalties will be high.

Reply to the comment left by "Mark Shine" at "20/06/2016 - 21:10":

“Debt and the impact it has on prices”
– I take it you are not saying this is not applicable to cheaper owner occupier debt?
It is not just the price of the debt it is the amount you can borrow that impacts on house prices
I earn £2k a month I can borrow £80K....maybe £100k.
If my rent is £2k a month I can borrow £320K...oh dear.
OO drive demand....but BTL is driving some insane prices.
.

“Make no mistake rents will be driven by affordability rather than what a Landlord feels they need to charge.”
– Yes, but nevertheless do you agree that C24 may exert some upward pressure on rents? Many LL, myself included, rarely increased rents previously.

Me neither...so some back rents may go up if that is what LLs choose to do, I tend to hold rents for good tenants beause a void and decorating job takes a long time to make back in increased rent...but new rents will be what they are.

“No need to build houses..” “..rental market should stay static…”
– I take it you are assuming there will be zero population growth and also that FTB’s will be snapping up sharer rental properties (ie HMOs)?

So the demand is the demand....BTL is shifting the demographics and sectors but not creating stock. BTL may have encouraged building...but without it builders will still build. Prices and land will drop accordingly to maintain the real economy, profit, wages and tax.

“Corporates next…..”
– will believe it when I see it. Why ‘next’ as opposed to simultaneously. If the latter was done, then C24 would have perhaps been a little more plausible in July 2015?

Because it would require a change to the progressive tax system we have for personal tax. Both get 20% relief...the same. Of course I realise the impact hits those pushed into HR tax brackets...but that is the HR tax bracket not a difference in relief. The next step will be a look at whether 20% relief is removed...thats when the limited companies will come into it.

I know everyone on here things I don't own property but I do. My appetite to defend myself and BTL is low....I have seen this coming for a while. I know LLs impacted, LL not impacted, tenants who are happy with the changes, tenants who are unhappy.
Anything that enables some correction to these prices (even at a cost to myself) is not something I can argue against. My kids are lucky because I know I can leave them a house when they themselves retire....but I have no idea how families who are not as privileged will cope...and I can't imagine how they feel.

Appreciate all the threads and comments but this one was LLs reactions to 2015. And I know as a LL I am not the only one who has reacted in this way. If everyone did what I had done then 10% of the population would own the whole housing stock...and the budget made me question not what we had done but the direction it was going.