Mr. Miyagi

Stop Buy-To-Let Tax Breaks To Help First-Time Buyers

92 posts in this topic

Property and its price are a particularly British fascination, but for generations of people owning property has become a very distant dream.

Despite the financial meltdown in 2007, the average price of a property in the UK still stands at just over £200,000 but the average wage in Britain is just £26,000. If you work to the principle that you shouldn't borrow more than three times your salary to fund a mortgage, a homebuyer needs a deposit of £125,000. Not very realistic is it.

The government has come up with a number of scheme to help first-time buyers, including underwriting mortgages, part-buy/part-rent plans. But there is one simple solution that I think the government has overlooked: tax the buy-to-letters more.

The rise of buy-to-let property owners is destroying the chance for young to get a foot on the property ladder. The buy-to-letters are snapping up the smaller properties, such as one bedroom flats, that are perfect for younger buyers, in order to take advantage of soaring rental income (another thing which is preventing renters from saving up enough deposit).

http://money.aol.co.uk/2012/05/01/stop-buy-to-let-tax-breaks-to-help-first-time-buyers/?ncid=webmail4

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This was a searingly honest comment. Jaw-droppingly so IMO:

Taff Waters

The writer is either ill informed, ill advised, deluded and intoxicated, or being intentionally provocative. I have several BTL properties, and as the mortgage terms expire, I will walk away from them, as re mortgaging will not be feasible. I would think I am not alone in my situation, there will soon be a glut of housing on the market. Without growth in the market, BTL doesn't work, With the low interest rates, the last few years have given a good return, but I have foolishly spent on improvements, during a period when equity has dropped 30%, Prior to the financial crash, I quite often has to subsidise mortgage payments from salary, BTL can be a bumpy ride.

:o

I didn't see that one coming!

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This was a searingly honest comment. Jaw-droppingly so IMO:

:o

I didn't see that one coming!

that, and remove the tax advantage and we will have our price drops.

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I quite often has to subsidise mortgage payments from salary, BTL can be a bumpy ride.

The fact that the person regards paying into their investment being a subsidy speaks volumes. I think it also sums up the whole 'money for nothing' culture that BTL introduced in the early nineties.

Its this (BTL) and the 1988 AST act that have been a pox on British society I the past 20 odd years.

Edit: formatting

Edited by bomberbrown

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This was a searingly honest comment. Jaw-droppingly so IMO:

:o

I didn't see that one coming!

Taff by name, thick as f*** by nature

Edited by SeeYouNextTuesday

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that, and remove the tax advantage and we will have our price drops.

If only this was a policy that was going to happen and not some guy writing on AoL.

Another awesome couple of comments:

susan

If the writer thinks being a Landlord is a get rich quick and easy money maker she needs to spend a day in my shoes. I make no monthly profit and on some occasions I have to add money from my wages of my full time job to pay mortgages when renters have not paid rent. Renters feel that they have a god given right to everything and give nothing back. For example I spent over £1000.00 on a bathroom for my new tenant but the room wasnt big enough for a full size bath so it was made a shower room. 1 year later and she now expects me to rip the shower out knock walls down and put in a bath as she has had a bady. Government have reduce rents so DSS can no longer afford any top ups and again we bear the brunt.

You talk about young people trying to get on the housing ladder what will happen to all the Dss who never had and never will have a chance to buy? should we just say nobody has a right to a roof in the UK? because if your idea was to be enforced all buy to let landlords would leave the market and leave what is already a country struggling to house its population with a problem nobody could sort.

And of course the old favourite:

discho190

A lot of buy to letters are buying to let help their children because they cannot afford to buy themselves.

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If only this was a policy that was going to happen and not some guy writing on AoL.

Another awesome couple of comments:

And of course the old favourite:

Tenants demanding a place to clean the body....being filthy scum, the LL is quite right to be miffed at having to provide a property with a cleaning ones body room.

One can imagine spending £1000 for a facility.....probably wasnt there before?

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Tenants demanding a place to clean the body....being filthy scum, the LL is quite right to be miffed at having to provide a property with a cleaning ones body room.

One can imagine spending £1000 for a facility.....probably wasnt there before?

We all know renters are filthy scum.

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"As an estate agent, it's not the investors that aren't letting first time buyers get on the market.

It's the fact that they need upto a 20% deposit.

First time buyers in East Yorkshire are like gold dust."

So, is he suggesting the BTL DOESNT need a 20% deposit?

I beleive that in this case, BTL needs the same deposit as an OO.

The problem of windmilling equity via a "porfolio" is clearly seen in the case of the Wilsons.....it all goes wrong when growth in prices disappears.

a 1% drop affects the entire portfolio, and being leveraged, thats a massive equity drop for every tiny drop in prices....margin calls are not far away.

Imagine having built up a portfolio since 2004....you have nothing to show for it today, and are probably in serious negative equity, except maybe in London.

Edited by Bloo Loo

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This article hits at one of the real problems in the housing market I would add

Banks are to BTL'rs in preference to low income FTB'rs. After a purge in 2009 of the johnny come lately BTL'rs the remaining BTL'rs have more collateral behind them than a FTB so if there is a crash in values of 30% the BTL's are in a better position to ride it out

The trend of european migrant workers means that BTL'rs now get an income stream from a different source making their business model more resilient

Another way of dealing with BTL is to include rental yields/property values in the calculations for pension lifetime limits. Currently

If the rich are on target to hit the pension fund lifetime limit they are entitled to of £1.5m then they can get round it by using BTL. If the rental yields or value of their property portfolio were included in this figure then that would cap the growth in BTL amongst the chattering classes

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"As an estate agent, it's not the investors that aren't letting first time buyers get on the market.

It's the fact that they need upto a 20% deposit.

First time buyers in East Yorkshire are like gold dust."

So, is he suggesting the BTL DOESNT need a 20% deposit?

I beleive that in this case, BTL needs the same deposit as an OO.

The problem of windmilling equity via a "porfolio" is clearly seen in the case of the Wilsons.....it all goes wrong when growth in prices disappears.

a 1% drop affects the entire portfolio, and being leveraged, thats a massive equity drop for every tiny drop in prices....margin calls are not far away.

Imagine having built up a portfolio since 2004....you have nothing to show for it today, and are probably in serious negative equity, except maybe in London.

As an EA he might wonder why lenders want a 20% deposit. The rise in deposit levels came about not just because of a shortage of funds, thus providing a means of rationing loans. The initial underlying reason was that lenders could not be sure how much the house on which they were lending was worth; a high deposit secured their loan against a fall in house prices. Strangely EAs and VIs do not mention this reason for a high deposit.

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This article hits at one of the real problems in the housing market I would add

Banks are to BTL'rs in preference to low income FTB'rs. After a purge in 2009 of the johnny come lately BTL'rs the remaining BTL'rs have more collateral behind them than a FTB so if there is a crash in values of 30% the BTL's are in a better position to ride it out

The trend of european migrant workers means that BTL'rs now get an income stream from a different source making their business model more resilient

Another way of dealing with BTL is to include rental yields/property values in the calculations for pension lifetime limits. Currently

If the rich are on target to hit the pension fund lifetime limit they are entitled to of £1.5m then they can get round it by using BTL. If the rental yields or value of their property portfolio were included in this figure then that would cap the growth in BTL amongst the chattering classes

Interesting idea, but then you might have to allow the BTLer to claim tax relief for any personal cash put into the BTL as it would be a pension contribution.

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1336375333[/url]' post='909032167']

The fact that the person regards paying into their investment being a subsidy speaks volumes. I think it also sums up the whole 'money for nothing' culture that BTL introduced in the early nineties.

Its this (BTL) and the 1988 AST act that have been a pox on British society I the past 20 odd years.

Edit: formatting

I make no monthly profit and on some occasions I have to add money from my wages of my full time job to pay mortgages

Another leech that think she's owed a living. dry.gif

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As an EA he might wonder why lenders want a 20% deposit. The rise in deposit levels came about not just because of a shortage of funds, thus providing a means of rationing loans. The initial underlying reason was that lenders could not be sure how much the house on which they were lending was worth; a high deposit secured their loan against a fall in house prices. Strangely EAs and VIs do not mention this reason for a high deposit.

Totally agree with this. Banks are factoring in a 20% fall via deposits. It amazes me people can't see this. Banking is all about getting a gain whilst not holding the risk (within a band of tolerance).

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http://www.housepricecrash.co.uk/forum/index.php?showtopic=153979&view=findpost&p=2773261

I've downloaded all the MPs and named the HTML files with their name and party (.html)

The ones below are the ones that contain the phrase "8. Land and Property" (175 of them)

PS (on edit) - 112 out of 175 are conservative if that interests anyone!

Adam-Afriyie-Conservative.html

Adrian-Bailey-Labour.html

Adrian-Sanders-Liberal Democrat.html

Alan-Duncan-Conservative.html

Alasdair-McDonnell-Social Democratic and Labour Party.html

Alistair-Darling-Labour.html

Alok-Sharma-Conservative.html

Andrea-Leadsom-Conservative.html

Andrew-Griffiths-Conservative.html

Andrew-Love-Labour.html

Andrew-Murrison-Conservative.html

Andrew-Robathan-Conservative.html

Andrew-Selous-Conservative.html

Andrew-Stephenson-Conservative.html

Andrew-Turner-Conservative.html

Angus-MacNeil-Scottish National Party.html

Angus-Robertson-Scottish National Party.html

Ann-Clwyd-Labour.html

Anne-Marie-Morris-Conservative.html

Anne-McIntosh-Conservative.html

Annette-Brooke-Liberal Democrat.html

Barry-Sheerman-Labour.html

Bernard-Jenkin-Conservative.html

Bill-Esterson-Labour.html

Bob-Blackman-Conservative.html

Bob-Neill-Conservative.html

Bridget-Phillipson-Labour.html

Caroline-Spelman-Conservative.html

Catherine-McKinnell-Labour.html

Charles-Hendry-Conservative.html

Chi-Onwurah-Labour.html

Chris-Bryant-Labour.html

Chris-Grayling-Conservative.html

Chris-Heaton-Harris-Conservative.html

Chris-Williamson-Labour.html

Christopher-Huhne-Liberal Democrat.html

Christopher-Leslie-Labour.html

Clive-Betts-Labour.html

Conor-Burns-Conservative.html

Damian-Collins-Conservative.html

Dan-Byles-Conservative.html

David-Cameron-Conservative.html

David-Crausby-Labour.html

David-Jones-Conservative.html

David-Lammy-Labour.html

David-Morris-Conservative.html

David-Nuttall-Conservative.html

David-Rutley-Conservative.html

David-Simpson-DUP.html

David-Ward-Liberal Democrat.html

David-Willetts-Conservative.html

Desmond-Swayne-Conservative.html

Dominic-Grieve-Conservative.html

Douglas-Carswell-Conservative.html

Edward-Davey-Liberal Democrat.html

Edward-Garnier-Conservative.html

Eilidh-Whiteford-Scottish National Party.html

Emily-Thornberry-Labour.html

Eric-Ollerenshaw-Conservative.html

Esther-McVey-Conservative.html

Fiona-Bruce-Conservative.html

Fiona-Mactaggart-Labour.html

Francis-Maude-Conservative.html

Geoffrey-Clifton-Brown-Conservative.html

Geoffrey-Cox-Conservative.html

Geoffrey-Robinson-Labour.html

George-Eustice-Conservative.html

George-Freeman-Conservative.html

George-Hollingbery-Conservative.html

Geraint-Davies-Labour.html

Gerald-Howarth-Conservative.html

Gerry-Adams-Sinn Fein.html

Glyn-Davies-Conservative.html

Gregory-Barker-Conservative.html

Harriet-Harman-Labour.html

Helen-Grant-Conservative.html

Henry-Bellingham-Conservative.html

Henry-Smith-Conservative.html

Hilary-Benn-Labour.html

Huw-Irranca-Davies-Labour.html

Iain-Stewart-Conservative.html

Ian-Davidson-Labour.html

Jacob-Rees-Mogg-Conservative.html

James-Arbuthnot-Conservative.html

James-Clappison-Conservative.html

James-Duddridge-Conservative.html

James-Paice-Conservative.html

Jeremy-Hunt-Conservative.html

Jesse-Norman-Conservative.html

Jessica-Lee-Conservative.html

Jim-Murphy-Labour.html

Jim-Shannon-DUP.html

John-Baron-Conservative.html

John-Bercow--.html

John-Glen-Conservative.html

John-Penrose-Conservative.html

John-Randall-Conservative.html

John-Redwood-Conservative.html

John-Stevenson-Conservative.html

Jonathan-Djanogly-Conservative.html

Julian-Lewis-Conservative.html

Julian-Smith-Conservative.html

Karl-McCartney-Conservative.html

Keith-Vaz-Labour.html

Kerry-McCarthy-Labour.html

Kevin-Barron-Labour.html

Kwasi-Kwarteng-Conservative.html

Lindsay-Hoyle-Labour.html

Lorraine-Fullbrook-Conservative.html

Lyn-Brown-Labour.html

Mark-Pawsey-Conservative.html

Mark-Spencer-Conservative.html

Mark-Tami-Labour.html

Martin-Horwood-Liberal Democrat.html

Mary-Macleod-Conservative.html

Matthew-Offord-Conservative.html

Michael-Ellis-Conservative.html

Michael-Meacher-Labour.html

Mike-Freer-Conservative.html

Nadhim-Zahawi-Conservative.html

Natascha-Engel-Labour.html

Neil-Carmichael-Conservative.html

Neil-Parish-Conservative.html

Nia-Griffith-Labour.html

Nicholas-Dakin-Labour.html

Nick-Gibb-Conservative.html

Nigel-Adams-Conservative.html

Nigel-Dodds-DUP.html

Nigel-Evans-Conservative.html

Nigel-Mills-Conservative.html

Norman-Lamb-Liberal Democrat.html

Owen-Paterson-Conservative.html

Pat-Glass-Labour.html

Paul-Beresford-Conservative.html

Paul-Burstow-Liberal Democrat.html

Paul-Maynard-Conservative.html

Pauline-Latham-Conservative.html

Peter-Aldous-Conservative.html

Peter-Hain-Labour.html

Peter-Luff-Conservative.html

Peter-Soulsby-Labour.html

Phil-Woolas-Labour.html

Philip-Dunne-Conservative.html

Philip-Hammond-Conservative.html

Philip-Hollobone-Conservative.html

Richard-Benyon-Conservative.html

Richard-Drax-Conservative.html

Richard-Fuller-Conservative.html

Richard-Harrington-Conservative.html

Richard-Ottaway-Conservative.html

Rob-Wilson-Conservative.html

Robert-Goodwill-Conservative.html

Robert-Halfon-Conservative.html

Robert-Walter-Conservative.html

Roger-Gale-Conservative.html

Roger-Williams-Liberal Democrat.html

Rory-Stewart-Conservative.html

Rushanara-Ali-Labour.html

Sajid-Javid-Conservative.html

Sarah-Newton-Conservative.html

Shailesh-Vara-Conservative.html

Shaun-Woodward-Labour.html

Sheila-Gilmore-Labour.html

Simon-Hughes-Liberal Democrat.html

Sian-James-Labour.html

Stephen-Metcalfe-Conservative.html

Stephen-Phillips-Conservative.html

Stuart-Andrew-Conservative.html

Teresa-Pearce-Labour.html

Theresa-Villiers-Conservative.html

Therese-Coffey-Conservative.html

Tony-Baldry-Conservative.html

William-Hague-Conservative.html

William-McCrea-DUP.html

Zac-Goldsmith-Conservative.html

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The fact that the person regards paying into their investment being a subsidy speaks volumes. I think it also sums up the whole 'money for nothing' culture that BTL introduced in the early nineties.

Its this (BTL) and the 1988 AST act that have been a pox on British society I the past 20 odd years.

Edit: formatting

+100

Thought exactly the same as I read it. Truly are leeches.

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http://www.housepricecrash.co.uk/forum/index.php?showtopic=153979&view=findpost&p=2773261

I've downloaded all the MPs and named the HTML files with their name and party (.html)

The ones below are the ones that contain the phrase "8. Land and Property" (175 of them)

PS (on edit) - 112 out of 175 are conservative if that interests anyone!

NAMES

Thanks that helps. One of them is my MP and I shall be asking their opinion on house prices and what should be done. I suspect the answer will lose them a vote.

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http://www.housepricecrash.co.uk/forum/index.php?showtopic=153979&view=findpost&p=2773261

I've downloaded all the MPs and named the HTML files with their name and party (.html)

The ones below are the ones that contain the phrase "8. Land and Property" (175 of them)

Thanks for that, it's really interesting - so am I right in thinking that around a third of MPs have some sort of BTL interest? That would explain a few things!

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Err I'm not sure banks prefer BTL to FTB.

Banks are running away from IO mortgages.

The LTV and arrangement fees for BTL can be horrendous.

If I was a bank I would be expecting the the tax advantage to go.

Banks might prefer BTL when the LL has a large amount of equity in their own house.

The quote ' walk away' is laughable.

Most BTL empires end up with the BTL props and the LL own house being sold.

I last took on a new rental 12 years ago.

Looking at the local paper, the equivalent properties -2 beds are pretty much the same price.

The only differences is that there are about 10 times more properties available and they are much, much nicer furnished.

The number of rentals in the local area is now huge. Outside of DHSS, there is just not a great deal of demand with the economy being what it is i.e. jobs going rather than being created.

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Err I'm not sure banks prefer BTL to FTB.

I believe the property developers prefer investors over FTB's. I know for a fact that if you are an Investor and know where to look you will be able to get fairly big off-the-books discounts on new builds from the big developers. These discounts are not publicly advertised; investor only deals. Presumably because the sales process is more straight-forward.

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Thanks for that, it's really interesting - so am I right in thinking that around a third of MPs have some sort of BTL interest? That would explain a few things!

Donations to MPs by people with property interests are not always listed in the name of the firm just in the name of the person making the donation. It's only when it's an unusual name that it's easier to pick out the business interests of the person making the donation.

Harriet Harman made the news about a donation 2007:

The controversial donation of £5,000 towards Harriet Harman's costs of running for Labour deputy leader - made by a proxy for the northern property developer David Abrahams - was one of 18 donations received by Harman this year. But according to inquiries made by The First Post, it was the only one where the donor was not well-known to the Harman campaign team.

Yet neither Harman nor any member of her team thought it necessary to query the donation. Harman, who yesterday paid back the £5,000 following the storm of protest over Abrahams's secret donations to Labour, said she had no idea that Janet Kidd was acting on behalf of someone else. She said she accepted the cash because Kidd was a pre-existing Labour donor and was on the electoral register

http://www.theweek.co.uk/people/36191/janet-kidd-unique-harriet-harman-list

http://www.theyworkforyou.com/regmem/?p=10260

I see Harriet had a donation from "Stefanos Stefanou, a building entrepreneur" I wonder if it is this one:

http://www.doyleplc.co.uk/about-us/stef-stefanou-obe.html

"Stefanou" is a name that crops up on the register of interests for ex-Labour housing minister Alison Seabeck (Stefanos), ex-Labour housing minister Nick Raynsford (Stef ) and current Labour Housing Minister Jack Dromey (Stelio)

http://www.theyworkforyou.com/regmem/?d=2010-09-06

Alison Seabeck is Nick Raynsford's partner and Jack Dromey is Harriet Harman's husband

Dromey made the expense news

http://www.dailymail.co.uk/news/article-2089020/Labour-minister-forced-apologise-MPs-failing-declare-60-000-payments-Unite-union.html

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The problem of windmilling equity via a "porfolio" is clearly seen in the case of the Wilsons.....it all goes wrong when growth in prices disappears.

a 1% drop affects the entire portfolio, and being leveraged, thats a massive equity drop for every tiny drop in prices....margin calls are not far away.

Imagine having built up a portfolio since 2004....you have nothing to show for it today, and are probably in serious negative equity, except maybe in London.

Did somebody say Margin Calls?

MARGIN CALLS!!!!!!!!!!!

Edited by RufflesTheGuineaPig

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happy2bhelen

I managed to get a Buy to let mortgage some years ago when it was possible to self-certify, intending this to be a long term investment that might one day provide me with funds towards a pension.

Calling Eric

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