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


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#1 Mr. Miyagi

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Posted 07 May 2012 - 06:58 AM

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..../?ncid=webmail4

#2 Frank Hovis

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Posted 07 May 2012 - 07:12 AM

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!
High house prices - wrecking economies worldwide since 2003

#3 Bloo Loo

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Posted 07 May 2012 - 07:21 AM

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.
WARNING

Your
country is at risk
if you
do not keep up repayments
on a gilt or other loan secured on it





#4 bomberbrown

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Posted 07 May 2012 - 07:22 AM

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, 07 May 2012 - 07:22 AM.

In the 1950s Local Authorities built over 200,000 homes per year. In 2004 they built just 133.
Housing - Trends in tenure and cross tenure topics (general)

#5 7 Year Itch

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Posted 07 May 2012 - 07:29 AM

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, 07 May 2012 - 07:29 AM.

There is no ladder.

JY


No need to sell up, the next phase of the economics cycle is going to be very positive for anyone that owns property.

All I'm sayings is, don't listen to the property bears people, they are wrong.


#6 bmf

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Posted 07 May 2012 - 07:35 AM

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.



#7 Bloo Loo

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Posted 07 May 2012 - 07:39 AM

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?
WARNING

Your
country is at risk
if you
do not keep up repayments
on a gilt or other loan secured on it





#8 Mr. Miyagi

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Posted 07 May 2012 - 07:41 AM

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.

#9 Bloo Loo

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Posted 07 May 2012 - 07:45 AM

"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, 07 May 2012 - 07:48 AM.

WARNING

Your
country is at risk
if you
do not keep up repayments
on a gilt or other loan secured on it





#10 riverside

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Posted 07 May 2012 - 07:46 AM

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

#11 mfs1959

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Posted 07 May 2012 - 08:22 AM

"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.

#12 mfs1959

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Posted 07 May 2012 - 08:24 AM

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.

#13 bomberbrown

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Posted 07 May 2012 - 08:24 AM

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. Posted Image
In the 1950s Local Authorities built over 200,000 homes per year. In 2004 they built just 133.
Housing - Trends in tenure and cross tenure topics (general)

#14 bmf

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Posted 07 May 2012 - 08:26 AM

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).

#15 Democorruptcy

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Posted 07 May 2012 - 08:31 AM

http://www.housepric...dpost&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
Democorruptcy
If you say "Democorruptcy" quickly, it sounds a bit like "Democracy". In a "Democracy" people vote for politicians who represent their interests. In the UK's "Democorruptcy" people can only vote for expense fiddling thieving MPs who are in the hip pocket of big business and the finance sector.

Governbankment
A "Governbankment" is a Government that has no line between itself and it's banks. The UK's Governbankment does policies to enrich bankers at the expense of the public. The more money people are encouraged to borrow, the more money bankers make.

The Funding for Lending Scheme (FLS) is stealing from savers to make them pay for crimes by bankers. Via lower interest on savings, all the bank fines for PPI, LIBOR and interest rates swaps are now being paid by savers so that bankers can keep pocketing bonuses.

"We need to make a really big change: from an economy built on debt to an economy built on savings" - David Camoron Jan 2009
"Printing money is the last resort of desperate governments when all other policies have failed" - George Osborne Jan 2009
- So what do Camoron & Osborne do? Print money and leave interest rates at 0.5% when inflation is over 5%

If it is asserted that civilization is a real advance in the condition of man -- and I think that it is, though only the wise improve their advantages -- it must be shown that it has produced better dwellings without making them more costly; and the cost of a thing is the amount of what I will call life which is required to be exchanged for it, immediately or in the long run.
http://classiclit.ab...en-Part-2_4.htm

I want to tell you my secret now.... I see debt people




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