Number of buy-to-let mortgages available hits 1,000

Reply to the comment left by "Jon Pipllman" at "02/09/2015 - 11:00":

I don't share your view. House price growth will slow down but I don't think it will turn negative.

Over the next 5 years there will be about 2.5 million more people in the UK and only some 0.7 million additional homes. Thats more demand than supply so I think the market won't crash and definitely won't crash 25%

I understand capital gains will be due but it won't eat into all of the 25% deposit. Say you bought a house for £100k and its now £200k. The £100k gain minus the £20k exemption (husband and wife) leaves £80k taxed at £22.5k. Even if they had recently remortgaged into 75% LTV they would have a £150k mortgage on a £200k house or there would need to be a 14% fall before the lender took a hit and this assumes that the BTLer had no other assets or income to meet the loan and most will have at least a main home with lots of equity

And the beauty of the (relatively) free market in which we live and work, is that we can both have different views and structure our investments / businesses accordingly.

Only time will tell which of us is right (and neither of us should be surprised if we are both wrong by the way).

I wish you well with your ventures.

Reply to the comment left by "Jon Pipllman" at "02/09/2015 - 11:00":

I believe you are wrong over cgt diluting the amounts receivable. This would be the case for floating charges.....However most mortgages are based on a fixed charge I believe. Fixed charges take priority over tax.

I was referring specifically to situations of insolvency, where it is the trustee that is disposing of the bankrupt's assets.

In such cases, any chargeable gain arising from the disposal is payable by the trustee as an expense of the bankruptcy and before claimable debts. i.e. before working out how much is left to settle with creditors.

You can read about it in the HMRC manuals here

http://www.hmrc.gov.uk/manuals/insmanual/ins2405.htm

Reply to the comment left by "Jon Pipllman" at "02/09/2015 - 17:28":

@ Jon Pipllman: I take it you are the same person who has the user name ‘Pipllman’ on the HPC website and has made 851 posts there to date? On the thread entitled ‘BTL Scum Regrouping And On The Offensive’ on your HPC site I see you wrote ‘I was surprised to be the one to break the news of the petition response on 118.com’.

Can you ask your friends at HPC what is their view regarding the planned restriction of tax relief only being applied to non-incorporated LLs?

Yes Mark, that is indeed my HPC username.

I don't count any of the other posters on HPC as friends, but I will - if you really want me to - ask them what is their view regarding the planned restriction of tax relief only being applied to non-incorporated LLs

I could - if you really wanted me to - start a thread with that specific question.

You and I (and I expect most others reading this) can guess their responses(*), but there is some sense in gathering all the answers together in one place I guess.

(*) responses will range from the rabid hatred of all landlords (including me by the way: you don't get an exemption from that just by posting there!) through to sensibly reasoned arguments for and (very rare, but possible) against the proposed changes.

If someone more knowledgeable about this board will let me know if starting that thread over there would break any rules here, that would be appreciated.

I will take your post as an invitation to share my own view on the proposed legislation, which is that it has some merit. The current system - where having a larger income allows me to claim a higher rate of tax relief on finance costs for this particular asset class - gives me a clear advantage versus individuals with smaller incomes (and indeed companies) when it comes to financing a property.

I can see the logic in saying that advantage is unfair. Restricting the relief available to the basic rate (which happens to be very similar to the corporation tax rate) is one way of 'removing' that advantage.

So, whilst I am not supportive of the change personally, I can sort of go along with the case being made to support the proposals.

My own view is that I think the proposals have been brought about by the fact that larger and highly leveraged BTLers have been paying tax at rates that would make even the Starbucks CFO raise an eyebrow and the government doesn't like that.

Reply to the comment left by "Jon Pipllman" at "02/09/2015 - 18:55":

Jon - I try and have a quick look at all the forums and news articles to get a balanced view of what others are saying.

You say of the HPC site: ‘rabid hatred of all landlords’ and ‘you don’t get an exemption from that just by posting there!’

They don’t seem to apply those rules to ‘Phil321’ on there who says he is a landlord. Whether ‘Phil321’ is one of the regular HPCers ‘second account’ or not I do not know, but even the toughest of HPCers there seem to show him a lot of love and readily accept he is the only one decent LL in the world, whilst all millions of others are pure scum.

Sorry to say this, but the older I get, the more I realise that Humans are often not very pleasant individuals… and that could apply whether they are landlords, tenants or anything else.

Apologies to the OP… I don’t mean to hijack your thread, but given that HPC website seem to now spend the majority of their time (1) either copying any posts from this forum on to theirs where they see an angle to ‘use’ (ie: ‘oh look some random individual posted ‘blah, blah, blah’ on the internet!, hence that’s conclusive proof all LLs are scum!’) or (2) posing on other forums with multiple accounts and news article online comments appearing to represent ‘the common man’….

…I was wondering what their thoughts were on the non-incorp vs incorp point.

BTW I was not specifically referring to you Jon re the point (2) above. But a few of the hardest core HPCers seem to appear everywhere online using fake accounts.

I also see that HPCers are calling all this a ‘war’ and playing dirty if they can. There’s no need for that, all one needs to do is simply stick to the facts.

+1 to all that

What this tax change seems to highlight is how flawed this highly leverage strategy that many have followed and indeed has been marketed by many of the gurus seems to have been. I totally get using property as a pension.....my goal is to end up with 2 or 3 properties which have been totally paid off. I do that by using repayment mortgages and keeping leverage to a sensible level. What I just don't get with the high leverage model is. ...by refinancing all the time all your doing is kicking the CGT can down the road and you end up with a large portfolio of low yielding properties. Why would you want the hassle of dealing with 20 low yield properties when 3 or 4 unencumbered properties could yield just as much? Am I missing something or just to prudent by nature?

Yes James, the annoying so called 'properly gurus' are also now very quiet on the recent LL tax proposals. Unsurprisingly.