Btl Scum Regrouping And On The Offensive. -- Merged

[Ah-so]

6 hours ago, fru-gal said:

But there are loads who rent out "all bills included" properties for cash in hand. Just look in the windows of newsagents and you will see plenty.

Loads? Some maybe, but they operate at the fringes, probably appealing to tenants who also wish to stay off the grid. 

 

The bulk of landlords are now on some kind of list that the government can access. 

[Venger]

 

On 7/31/2016 at 1:27 PM, Bland Unsight said:

The Treasury are going to beat on the buy-to-let guys like a piñata till they start to give up in droves. Poor old Bos Reck is going to have to write letters morning noon and night in order to hold back the tide on what's coming.

On 12/24/2016 at 0:32 PM, Bland Unsight said:

And that is the exact problem with your 'reasoning'.

It's like when the half-wit w@nkers from PovertyLater turn up in then Guardian comments and go on about how they individually aren't bankrupted by Section 24. Fascinating for them, I'm sure, but it will be a pretty meagre crumb of comfort if a price move of 30% down leaves them with negative equity in their portfolio and waiting on the margin call letters from their lenders enquiring about their plans to restore the LTV in the loans.

 

On 11/27/2016 at 1:09 PM, Phil321 said:

...i wouldn't want to owe lots of money and not have the resource to repay it. If I were a 118'er I would be seriously worried. Well, I might just feel entitled and be sending lots of letters to people who dont care. Their plan really was built on poor foundations. 

 

More letters:

BTLers did not like some Newsnight feature - apparently lacking the balance the BTLs expect - err BTL has had glory coverage over the years too, for those minds who were eager/positioned to take their market bearings from it - not me... prospect of buying a home has been the overwhelming challenge given these prices, through years of HPI+ galore and BTLer double-down.  

https://www.property118.com/newsnights-biased-anti-landlord-coverage/94522/

Barwell.  https://www.property118.com/letter-to-gavin-barwell-housing-minister/94497/

 

Quote

 

Well done Ros. This man is a complete and utter idiot. Even Sad Javid had a pop at landlords the other day for “taking half of tenants salary in rent”

Disgusting.

 

---------------

On 12/23/2016 at 1:51 PM, Ah-so said:

I was amazed how long it took them to wake up to the CP when it was released. The great and the good of 118 shrugged their shoulders and said it didn't affect them before getting back to writing letters about s24 instead of joining in the Consultation 

Actually it did effect them. It effectively brought forward the impact of s24 to underwriting today and reduced LTVs to 60% for higher rate tax payers. 

They are also waking up to the remortgage sop, which will turn out to be useless. If used it will be within the regulations, but will mean accepting clients with significantly worse cash flows. The probability that the borrower will default over the life of the mortgage will become much higher. The regulator can say that something is within the rules but is not prudentially sound and require higher capital etc.

If s24 was the death sentence, the Supervisory Statement is the executioner. It may save some by forcing them to sell up sooner before the full impact of S24 hits their tax bill. 

 

On 12/24/2016 at 9:27 AM, Ah-so said:

13.79% is the correct figure ((145%-125%)/145%), and while it sounds small, it makes a big difference to future BTL affordability, particularly when you take the additional 3% stamp duty into account. 

For higher rate tax payers it now means that the minimum BTL deposit is nearer 40% as opposed to 25% and this makes a big difference to the ability to acquire an initial property and also the ability to use future house price gains to remortgage and acquire additional properties. 

Good stuff BTW, Ah-so.

[Venger]

Somewhere else on 118 recently... 

Quote

I have recently driven down a street in Everton, Liverpool and saw in big letters on a solicitors window, WE CAN DEAL WITH ROGUE LANDLORDS.
No win-no fee solicitors are now looking for a replacement for PPI.

 

[Bland Unsight]

2 hours ago, fru-gal said:

I hope so. There are always loads of these badly spelled adverts for rooms to rent (cash in hand naturally) in my local newsagents window.

Could easily be sub-letting by tenants.

The idea that the London property market is anchored to people paying rent cash in hand seems extremely dubious to me.

How are you supposed to build up a property empire with rent paid cash in hand without ASTs? Good luck trying to get mortgage finance with that paperwork. BTL is a capital gain play. Without financing you can't get access to the capital gain without selling up.

 

[kibuc]

53 minutes ago, fru-gal said:

I think it is mostly older people renting out rooms in their large London homes. It's not all illegal as they can get a certain amount legally without paying tax (I think it is something like £7.5k now for the "rent a room" scheme which the Government introduced a few years ago) but I'm sure a lot getting more than this and just getting paid in cash. I'll try and get a photo next time I venture out...

My neighbour downstairs has been sitting in a repection room of her 2-bedder and letting two rooms for the last ten years. I doubt she's ever paid any tax on it.

Although I should probably have said 'used to be letting', as she'd lost all her tenants last year, allegedly due to noisy kids upstairs (pffff, svck me my dear) and is in the process of selling. She converted her basement into a 'windowless room', put it on the market in September for a healthy 740k 'because people next door had just sold for 650k', accepted an early offer, the SSTC sign stood there for good two months, then things got a bit quiet, until it reappeared on the market the day before yesterday - again for 740k. I don't know whether it's just her or her EA, but somebody clearly cannot see the writing on the wall. Most places in the 'hood are getting reduced at an increasing pace. I think I'll be having a lot of fun watching this one.

[lastlaugh]

On 11/02/2017 at 1:55 PM, Exiled Canadian said:

I think that this is the key point.  The HMRC are effectively in business (as I was told by a wise old accountant many years ago) - until S24 most BTL would actually have had relatively little tax to pay as they seem to structure their affairs such that the rent just about covers the mortgage interest and other costs (by leveraging up like loons).  Hence the return to HMRC for tracking down BTL evaders and then getting the cash out of them is relatively small and probably not worth significant time and resources.

The cost benefit balance of going after BTL evaders is now moving quite rapidly to support investment in enforcement efforts for a number of reasons:

1. As noted by others "big data" and cheaper, more powerful IT makes identifying potential evaders quicker and cheaper.
2. S24 means that the liabilities being evaded will be higher, making the return on a successful investigation higher.

Any BTL tax evaders reading should also note that once HMRC identifies that you have been "economical" with the truth of your financial affairs they can go back to look at previously accepted returns and demand interest and further penalties on previous unpaid tax.  hence the longer before they catch you, the bigger the payoff when they do and the more and more effort they are going to put into finding you.....I'd sell now and sell everything.

 

 

Reminds of something we covered on here a couple of years ago.  A common misconception from landlords is that there is no need to declare anything to HMRC if there is no profit.  Hence it's fashionable to structure BTLs to wash their face and save on the paperwork.  I recall that all income needs to be reported.  Even facewashing businesses need to declare rental income above a certain amount and offset the allowable expenses via self-assessment.

In other words, there will be a significant amount of landlords who haven't declared anything in the past, who will have some explaining to do when they finally emerge out of the woodwork with S24.

[Confusion of VIs]

On ‎2‎/‎11‎/‎2017 at 9:03 AM, spyguy said:

Yes. The security questions were a bit unnerving this year.

Next it night might 'name of the topless starlet you were googling 5 minutes ago'.

Number of household, ctax and bank details can be crunched with ~50k rack of servers easily.t

You are probably right about this, but it does raise a bigger question about do you all want to live in what is effectively a continuous surveillance society.

I am fairly relaxed about this, having already almost given up using cash in favor of electronic/contactless alternatives but do have sympathy for the views of many others on here who have real concerns about this. 

I believe there is a bigger picture than just whether BTLrs can occasionally avoid taxes, for example I do not support stamp duty in any form. It's a dreadful counter productive tax that I don't support even when its hitting BTLers.    

[spyguy]

1 minute ago, Confusion of VIs said:

You are probably right about this, but it does raise a bigger question about do you all want to live in what is effectively a continuous surveillance society.

I am fairly relaxed about this, having already almost given up using cash in favor of electronic/contactless alternatives but do have sympathy for the views of many others on here who have real concerns about this. 

I believe there is a bigger picture than just whether BTLrs can occasionally avoid taxes, for example I do not support stamp duty in any form. It's a dreadful counter productive tax that I don't support even when its hitting BTLers.    

I dont think there surveillance as you mean it.

What I guess happens is they crunch the LR data on Name + DOB.

If anyone crops up twice then they have a closer look.

If you have one house then the computer passes you by.

 

[mat109]

2 hours ago, spyguy said:

I dont think there surveillance as you mean it.

What I guess happens is they crunch the LR data on Name + DOB.

If anyone crops up twice then they have a closer look.

If you have one house then the computer passes you by.

 

HMRC Connect is based off technology called netreveal by BAE systems. I've seen them selling the product in another domain.

It does pretty much exactly that - tries to link disparate pieces of information to build a single picture of activity (name, dob would be one way of linking together but includes the less obvious 'tell-tale' stuff like phone numbers etc.) and then find oddness in the profile it builds. Looks like clever stuff, but it's not magic.

So - I guess it could take Land Registry data and 'notice' you have n rubbish flats yet have never declared any income.

[Confusion of VIs]

2 hours ago, spyguy said:

I dont think there surveillance as you mean it.

What I guess happens is they crunch the LR data on Name + DOB.

If anyone crops up twice then they have a closer look.

If you have one house then the computer passes you by.

 

I was more thinking about the capability cheap and powerful computing gives anyone who wants to monitor others than the specific case mentioned.

HMRC have had the ability to hunt down BTLrs for a long time now, I doubt whether many who actually make significant profits have escaped the net.

  

[little fish]

HMRC should be able to pull in a fair few pounds from all those LL's who have to date been declaring a loss.            

[macca13]

On 11/02/2017 at 0:55 PM, Exiled Canadian said:

I think that this is the key point.  The HMRC are effectively in business (as I was told by a wise old accountant many years ago) - until S24 most BTL would actually have had relatively little tax to pay as they seem to structure their affairs such that the rent just about covers the mortgage interest and other costs (by leveraging up like loons).  Hence the return to HMRC for tracking down BTL evaders and then getting the cash out of them is relatively small and probably not worth significant time and resources.

The cost benefit balance of going after BTL evaders is now moving quite rapidly to support investment in enforcement efforts for a number of reasons:

1. As noted by others "big data" and cheaper, more powerful IT makes identifying potential evaders quicker and cheaper.
2. S24 means that the liabilities being evaded will be higher, making the return on a successful investigation higher.

Any BTL tax evaders reading should also note that once HMRC identifies that you have been "economical" with the truth of your financial affairs they can go back to look at previously accepted returns and demand interest and further penalties on previous unpaid tax.  hence the longer before they catch you, the bigger the payoff when they do and the more and more effort they are going to put into finding you.....I'd sell now and sell everything.

 

 

All these free "check you credit score" companies are not what they seem.. the people inputting their data are oblivious that the data they supply is being cross referenced then can be sold to different agencies/councils to stop fraud. You could enter an address and the data can be crossed referenced against names, tax database to see if anything pings up..  The golden rule, there is no such thing as free!

[Venger]

8 hours ago, Confusion of VIs said:

You are probably right about this, but it does raise a bigger question about do you all want to live in what is effectively a continuous surveillance society.

I am fairly relaxed about this, having already almost given up using cash in favor of electronic/contactless alternatives but do have sympathy for the views of many others on here who have real concerns about this. 

I believe there is a bigger picture than just whether BTLrs can occasionally avoid taxes, for example I do not support stamp duty in any form. It's a dreadful counter productive tax that I don't support even when its hitting BTLers.    

 

How much have you contributed along the way to tech-advancing it?      Played some part, yes?  Earnings with it?   As in the overall advancement of technologies and tech systems toward authorities being able to pull up data on individuals?   

Nevertheless, I understand your concerns, Mr Interpol, (+ other things....   hehe - I remember).    You a very very tech-intelligent (so is one of my close relatives.. mind-boggles me - got a 1st here mid 2000s).   

I pushed back against Labour's Identity Card / database plan in early/mid 2000s.  The thought of power (especially Labour 'we know what is best for you' / 'right thing to do') being able to look in on a big database of info on individuals.  Life is water, not stone.   Blanked out how much taxpayer money was wasted on all that Labour ID project before it got scrapped.

However you have to give some trust out to the powers that be.  Have faith in other people and their expertise.  That we would have individuals will push back against any creep-misuse of tech against the people as a whole.  The authorities need good data for tracking down bad guys and preventing bad things from happening.   I am fully okay with HRMC having data - providing it is used for seeking revenue owed, or accessible under strict conditions for security agencies.  Or other things to prevent misuse.  

From direct experience I know HMRC are organised.  Going way-back they picked up on something on me, working 3 summer jobs as a student.  Regular job + 2 contracts was handling myself from parent's home in the evenings.  Very impressed.  A HMRC Inspector telephoned to check my position, and had to fill in new self-assessment form (no extra tax to pay).  All for lower end earnings.  Just enough to have saved enough to buy and insure a very old Ford Cortina, a few treats like some new clothes, a few nights out with friends,+ £3K into savings.  

Fru-gal triggered me with a view that main part of LL/BTL rental income, and the houses, is held of the books, with the suggestion BTLers/LLs are way ahead of HMRC, which I read as a big downer on the meaning and effect of Section 24 ahead.  

There is a BTLer on one of the BTLer forums who brags about 'brown paper envelopes' (presumably tenant rent?) and how he has loads of cash out the system in a suitcase'.  His attitude toward tenants totally chills me.  S24 'tenant-tax', and basically tenants exist to be fed upon.   "They have to pay more or out they go - it's all for tenants to pay."     Although I blank it out.  He even gets criticised by his fellow BTLers, with some claiming they would dread to be one of his tenants.  He doesn't appear to see people as people.  I can only assume he is working at very lower end of the housing 'supplying homes' and from other stuff he has his financial problems.  Had some of his properties repo-ed in 2008-10, although would have preferred to see it all go, given his attitude.  I trust things to catch up with him eventually, and I suspect he is a landlord at the lower end for who would put up with a landlord like that, if they had any choice.

Anyway as I understand it, things are going full-scale BTL 'Enemy of the State' - and I am ace-okay with that - given the ridiculous housing financialistion sociatelly damaging BTLer double down greed bubble.  "11 houses is it Mr.BTLer?  Your pension?  Oh you don't like S24."  - "Life isn't fair," the housing VI have told me so frequently over the years.  I love HMRC.  I love Section 24. 

[regprentice]

2 hours ago, macca13 said:

All these free "check you credit score" companies are not what they seem.. the people inputting their data are oblivious that the data they supply is being cross referenced then can be sold to different agencies/councils to stop fraud. You could enter an address and the data can be crossed referenced against names, tax database to see if anything pings up..  The golden rule, there is no such thing as free!

Indeed. From personal experience im aware that the big banks buy data from credit refrencing agencies (experian, D&B) to populate their own customer data for things like basel3 etc...

The banks dont capture enough data from their customers, or if they do then connecting the data points in their poorly designed and connected systems is too much like hard work. Eventually project managers/department heads throw their hands up in the air and give up trying to source the data internally and pay cash to these companies.

This is particularly true for the data that drives the sme (small and medium sized companies) numbers that boe and government fixate on.

I worked for a Ltd company which the directors were trying to sell. The d&b report caused them significant problems convincing the buyers that the d&b report wasnt worth the paper it was written on - various problems including ficticious directors no one had heard of.

[Ah-so]

27 minutes ago, regprentice said:

Indeed. From personal experience im aware that the big banks buy data from credit refrencing agencies (experian, D&B) to populate their own customer data for things like basel3 etc...

The banks dont capture enough data from their customers, or if they do then connecting the data points in their poorly designed and connected systems is too much like hard work. Eventually project managers/department heads throw their hands up in the air and give up trying to source the data internally and pay cash to these companies.

This is particularly true for the data that drives the sme (small and medium sized companies) numbers that boe and government fixate on.

I worked for a Ltd company which the directors were trying to sell. The d&b report caused them significant problems convincing the buyers that the d&b report wasnt worth the paper it was written on - various problems including ficticious directors no one had heard of.

In my experience, banks love to be able to lend to their own customers, especially if they have the main current account. It allows them to have a good look at the client's expenditure and have a good estimate of spending patterns. 

The agency data is not as good - while it records basic data about loans and defaults, it does not provide the same level of data. While it provides a good average score, access to the underlying activity allows for the most accurate credit and pricing decisions.

But as you say, data analysis of personal current accounts could be better.

[Patient London FTB]

Just came across this post on Property Tribes that shows how bearish one of the LL brigade is thinking: 

Keep your cashpile ready and waiting.

Wait for S24 LL to implode

Look for properties that don't meet the EPC E standard

S24 upsets completely everything you ever knew

This is a unique time in 200 years of property ownership

You have about 6 years to buy distressed LL properties.

Never have so many properties been required to be sold up due to the S24 imperative

Any property without EPC E you can buy BMV as it would cost about £4000 to achieve E standard

Without an EPC E standard only FTB can buy it which reduces market appeal.

That is if the FTB can raise the finance which most can't.

So a LL will be the only one who can buy and therefore negotiate the price down

Remember any LL buying a property without the minimum EPC E cert can't let out the property in about a year LEGALLY!!

How long would it take for the property to achieve EPC E standard!?

There are only so many builders around to carry out the works.

There are about 640000 rental properties needing to have works carried out to achieve EPC E standard

There aren't 640000 builders, so the longer you leavecit the rarer will available builders be!!?

You simply cannot afford to be waiting  around for your possible EPC works to be carried out.

So with S24, PRA, and MMR a LL with cash is in a great position to buy BMV

If you wanted to hold out for the real bloodbath then wait 5 years when the full S24 hits

But as Vanessa says if you buy now and property reduces due to all these circumstances it will recover 6 years from now..

But you might be competing with FTB due to substantial price reductions

So you should cruise around shark like and if you see a tasty morsel just go for it!

Don't worry if prices might reduce.

You could wait til the last moment when there may not be much BMV stock remaining.

So just observe the market and use your sharklike nous!

Remember take advantage of distressed LL, they have nowhere else to go.

They will need people like you to get rid of their S24 millstones to.

This will be the only time in your lifetime this S24 situation will occur

Grab the advantage and screw the S24 LL to the floor.

You are in a perfect position to take advantage of this S24 situation.

http://www.propertytribes.com/where-are-we-on-the-property-cycle-t-127628388.html

 

 

 

 

 

 

[Lavalas]

It's sad that I know this post is by Paul Barrett without clicking the link. The man is an idiot, frankly, but I guess he's right about cash buyers although I don't know if in a crashing market whether everyone tends to wait for the bottom?

[CunningPlan]

The EPC standard is very interesting and not something I have seen discussed on here. Is there a thread about it?

[Lavalas]

The Tenant Tax canpaign's latest idea is to get Shelter on side as apparently Phillip Hammond will listen to them. They reckon they reckon they're going to go 'Shock and Awe' but firstly they're inviting all goons to comment here...

http://blog.shelter.org.uk/2016/09/debate-around-buy-to-let-tax-changes-points-to-general-need-for-extra-safeguards-for-tenants/

Just saying like...

[Jugador]

6 hours ago, Patient London FTB said:

Just came across this post on Property Tribes that shows how bearish one of the LL brigade is thinking: 

Keep your cashpile ready and waiting..... etc.

Heck, they're going to be feasting on each other. Almost makes me want to head over to meetup.com and attend one of their gloating sessions. Violence might break out.

[Venger]

1 hour ago, Jugador said:

Heck, they're going to be feasting on each other. Almost makes me want to head over to meetup.com and attend one of their gloating sessions. Violence might break out.

Yeah FTBs and would-be OOs just not going to get a look in on any house.... the BTLers will be feasting on each other.

There's a few still BTL mad into this, but how many when it turns.

You can't read the tides from watching how PB mouths off.

Doubtful.  3% SDLT surcharge, PRA.  Some really fun stuff over on PT about £400 'per unit' licensing. 

On 12/23/2016 at 1:51 PM, Ah-so said:

I was amazed how long it took them to wake up to the CP when it was released. The great and the good of 118 shrugged their shoulders and said it didn't affect them before getting back to writing letters about s24 instead of joining in the Consultation 

Actually it did effect them. It effectively brought forward the impact of s24 to underwriting today and reduced LTVs to 60% for higher rate tax payers. 

They are also waking up to the remortgage sop, which will turn out to be useless. If used it will be within the regulations, but will mean accepting clients with significantly worse cash flows. The probability that the borrower will default over the life of the mortgage will become much higher. The regulator can say that something is within the rules but is not prudentially sound and require higher capital etc.

If s24 was the death sentence, the Supervisory Statement is the executioner. It may save some by forcing them to sell up sooner before the full impact of S24 hits their tax bill. 

 

On 12/24/2016 at 9:27 AM, Ah-so said:

13.79% is the correct figure ((145%-125%)/145%), and while it sounds small, it makes a big difference to future BTL affordability, particularly when you take the additional 3% stamp duty into account. 

For higher rate tax payers it now means that the minimum BTL deposit is nearer 40% as opposed to 25% and this makes a big difference to the ability to acquire an initial property and also the ability to use future house price gains to remortgage and acquire additional properties. 

 

[Si1]

3 minutes ago, Venger said:

Yeah FTBs and would-be OOs just not going to get a look in on any house.... the BTLers will be feasting on each other.

There's a few still BTL mad into this, but how many when it turns.

You can't read the tides from watching how PB mouths off.

Doubtful.  3% SDLT surcharge, PRA.  Some really fun stuff over on PT about £400 'per unit' licensing. 

 

 

I don't think it will be down to BTLers willingness or not. It will be down to the ability to get the finance.

[macca13]

http://tenantrefund.co.uk/landing?utm_source=Facebook&utm_medium=moneyowed

no win no fee after landlords now.. like getting an arrow through the neck and finding a gas bill tied to it! ? S24, basil 3, then a nice solicitor sending you letters.. 

[spyguy]

2 hours ago, macca13 said:

http://tenantrefund.co.uk/landing?utm_source=Facebook&utm_medium=moneyowed

no win no fee after landlords now.. like getting an arrow through the neck and finding a gas bill tied to it! ? S24, basil 3, then a nice solicitor sending you letters.. 

Oh its not only deposits.

Agent fees are illegal unless hey can show they spent that money on a service.

I expect most letting agents to be sued out of existence. I told one that. He laughed then. I saw hi mrecently, after he's had a demand. Hes not laughing any more. At best he has to demonstate that he it really did cos £200 to renew a tenancy.

[mat109]

32 minutes ago, spyguy said:

Oh its not only deposits.

Agent fees are illegal unless hey can show they spent that money on a service.

I expect most letting agents to be sued out of existence. I told one that. He laughed then. I saw hi mrecently, after he's had a demand. Hes not laughing any more. At best he has to demonstate that he it really did cos £200 to renew a tenancy.

Interesting - do you have any sources for that (the demands, the illegality requiring them to show that it was spent on a service)?

There's a few letting agents I'd love to talk to...