Summer Budget 2015 – Landlords Reactions

Trendo

If their advice is as good as their calculator it's absolute crap.

I input the following figures.

Tax rate 20%

Rental £30,000 pcm

Service charges £10,000 pcm

Mortgage interest £20,000 pcm

It told me that the extra tax I would pay is zero!!!

I have since done a calculation if my own based on a £43,000 salary, which falls into the 20% tax band.

This is the real effect of the tax ....

As you can see, the landlord will be nearly £60,000 a year worse off by 2020.21 despite making zero profit.

The company you have linked to do not appear to be affiliated with any regulatory body. I doubt they have Professional Indemnity insurance either. In my opinion they will vanish without trace at the first hint of a tax inspection. Yes they are cheap, in every way, but you get what you pay for!
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https://www.gov.uk/government/news/new-buy-to-let-powers-to-help-bank-of-england-enhance-financial-stability

Another Bombshell on Buy To let. (Read above link)

On the flip side this may give some room for manoeuvrability for government to reverse some drastic policies introduced by Osborne as they have now passed the buck to BoE.

This seems like a good news particularly what Mr Hammond says at the end of this document.

"The Chancellor of the Exchequer, Philip Hammond, said:

It is crucial that Britain’s independent regulators have the tools they need to keep our financial system as safe as possible.

Expanding the number of tools at the Financial Policy Committee’s disposal will ensure that the buy-to-let sector can continue to make an important contribution to our economy, while allowing the regulator to address any potential risks to financial stability."

It makes me think that all this action is heavily focused on the south where yields are low and supply is low. All these measures won't have any affect where we operate as the yields are really good interest payments are low rents are high. Reading between the lines it really looks like they are trying to force the hands of many landlords in London and the south east to sell up make at a Decent profit and that owner occupiers FTB Buyers will step in as I would guess demand will be high in London and the surrounding areas. The more landlords do this prices may go down in certain areas making them more accessible to more buyers just a theory but it stacks up in my eyes. Once there has been a mass sell off down south policies will reversed or tweaked.!

Following paragraph from above document is also interesting! Clearly government accepts that BTL makes valuable contribution to economy!

"The consultation noted the positive impact of buy-to-let landlords in the economy, and the role they play in widening and balancing the overall housing market. They provide good quality accommodation for those who cannot at this point afford to buy a home, or who do not wish to commit to home ownership for personal or employment reasons. At the same time, the consultation set out the financial stability risks that buy-to-let lending may pose and how the FPC’s recommended tools would address these risks and ensure long-term economic stability."

Roll on autumn statement ?

Reply to the comment left by "David Price" at "14/11/2016 - 16:32":

"It’s already too late, the evictions have started."

You said you were going to do that. Have you started evicting your tenants?

Reply to the comment left by "H B" at "16/11/2016 - 19:53":

Yes, and whatever the announcements made in the Autumn budget I will continue to do so because Universal Credit is a disaster in the making. Combined with our dysfunctional court system and benefit caps no landlord can now afford to take HB tenants. Never mind the local authority can house them in bed and breakfast accommodation.

I have the software (home brewed) to produce S21 on demand so the whole process is completely automated, for many years my tenancy agreements have a large A in the top right hand corner in preparation for the court submission.

Reply to the comment left by "Simon Hall" at "16/11/2016 - 19:05":

I see that the extraordinarily egotistical 'Harry Potter Crew' (as someone here recently referred to them as) are currently wetting their pants in sheer joy over this news.

TBH I suspect the influence of BOE regulating lending in PRS, assuming they are genuinely independent.. will be infinitely more rational than all the outrageous doublespeak from Osbo or his corporate LL chums (S24).

I wonder if future actions by the BOE with regard to the PRS may even help to encourage a future releveling of the playing field between 'corporate' & 'private' LLs?

Reply to the comment left by "Mark Shine" at "16/11/2016 - 21:44":

"Harry Potter Crew"...absolutely hilarious. You really do not like them Mark!

I personally think it is a good news BoE taking over responsibility so government is no longer answerable as such they will be politically protected by any outcries and repercussions from potential electorates. Needless to say then they will have very little reason to meddle with well functioning housing market.

I always thought housing should not form part of politicians political agenda.

Reply to the comment left by "H B" at "16/11/2016 - 19:53":

I have started a wholesale clear out of LHA tenants.

I have so far evicted 5 in Leicester and I have put one HMO up for sale as it's in a total LHA area and I wouldn't buy a house and live there.

After XMAS, I will be evicting another 5, in North Hykeham, (Lincolnshire), and will be selling that property.

The council, (North Kesteven), have actually asked me on the phone if they could fill it.
I said I would do it with direct payment through a credit union to avoid any clawbacks of LHA or Universal credit, but they can't cope with anything slightly different to their normal renting model. (It's pathetic).

By March, I anticipate that I will be selling a flat in Nottingham that has an LHA tenant in it, that has lived there since Feb 2010 and has never had a rent rise.

This is in anticipation of Section 24, and now the proposed mandatory licensing for all HMO's that is coming.

I will pay down some of my other mortgages and move towards a rent to rent model.

I am actually in knowledge of my future circumstances, but most btl landlords I come across just don't have a clue of what is coming, because they have believed the rubbish that Osborne and Gauke have previously spouted.

They are like deer with a cars headlamps heading towards them.

So I may go into another property strategy, but first I need to sell off and reduce my LTV.

So that's 11 households and 3 properties, only another 3 LHA households to go and I will be totally clear of them and I can hopefully then rack up the rents as the PRS starts to burn as all the smaller landlords run for the hills in a mass panic.

What a disaster Osborne will have been for the housing market.
(He's just been given a medal for something as well)