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Father Fred

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  1. "Government were encouraging BTL " [my words] is not the same as "government made me do it" [your lies]. The former is a background reason (I would not have bought a BTL had government not been encouraging it by allowing BTL mortgages, but it was my decision to do it) whereas the latter falsely states causation and implies regret.
  2. I did not say that the government made me do it. Its pretty pathetic lying about what people say. Government deliberately created circumstances which encouraged people like me to do it. Whether or not you like it they encouraged me to BTL and my net wealth and post tax income over the last 16 years has been higher as a result. I do feel somewhat bad for the tiny marginal effect my participation in the market has had on people like you, but I think you should blame government and not me. Besides, I doubt that you will be offering to subsidise my pension in the future if I fall on hard times, so I am not sure why you should think I should make financial decisions I regard as sub-optimal in order to do you a favour. I do not trust financial institutions or government. This is worst when investing in shares or in pensions (I also don't trust myself - I know enough to know I have not got the time to research properly), bad but less so when investing in BTL. IMHO. I am really not at the mercy of the banks, though obviously I am not totally free of them either (apart from on my debt free home). Still, so long as prices don't fall more than 60-70% I should be OK one way or another. In fact - just done some calcs - given my savings I'd probably be OK if forced to sell BTLs at around 20-25% of current market value - I'd miss the income I currently enjoy, but it wouldn't be the end of the world. I am wary but quite happy with my lot. Sorry to be the bearer of bad news. Not all BTLers are overleveraged idiots who think they're geniuses because they first bought when prices were reasonable and MEWd repeatedly. I do not support the P118 BS campaign - Dr Ros is a clown and I can honestly say I have more sympathy with your position than hers. I think S24 has some merit, but I personally would advocate different policies to help tenants and would-be FTBs. I came on here after years away because an HPC crash is much more likely now than I have thought it has been for some time now. I may well leave again because its still full of (understandably) bitter people - what is not so understandable is why so many are nasty and small minded even to people who advocate more tenant rights. I am here for a different perspective (albeit one I have considered for 15 years) - but many on here seem keen to drive away anyone who might offer one. That is your right, but I can't see what's in it for you unless you have a mindset similar to an EDL-supporting moron and being nasty to people who you feel inferior to is the only thing that gives you pleasure.
  3. I am less sure of what will happen to prices than I have been for years (not that I have always been right). Nationally I have not a clue because I don't really follow national prices, and besides an average which includes PCL, outer London, smart towns in the SE, houses in former mining towns, failing industrial towns etc is a bit meaningless. Where I know best - East London - I'd perhaps argure that prices were fair in 2001 and maybe until 2003. 2004 they got high and by 2007 insane. SInce then we have had a correction and a massive bounce back. I would probably argue that prices are 40% to 60% over-valued based on wages, but that this is off-set by low interest rates, bank of mum and dad, cash rich people who wish to invest, foreigners who wish to invest, poor alternative opportunities, shortages etc etc. Dependent on the extent to which these factors continue I would expect falls of between 0% and 40%. Not a clue.
  4. You make a good point. To follow up - (1) By your rationale government policy would be quite happy with an outcome where BTL lending ended but hedge funds stepped in to buy up all BTL properties and more, making the overall lot of would-be FTBs worse. (2) Do you think that any government would "proactively engineer a deflation of the housing bubble" given the harm it would do to leveraged OOs (and HAs who borrow, and bank blanace sheets etc etc). They might wish house price stability for decades to restore balance but I don't think they actively want falls. If the priority is the stability of the financial system then the priority must also be preventing a crash. Note - I am note saying that they won't get falls! (3) Even if the aim is to target the over-leveraged would it not make sense to say "the no-leveraged" landlords are equally responsible as any others for pricing out would-be FTBs. They can afford to pay. Why don't we tax them too?
  5. Two totally separate issues. People making life choices that I wouldn't. Not ideal but its their life. Secondly the possibility of damage to financial insitutions... that possibility clearly needs addressing. Won't happen sensibly under the tories.
  6. I don't think that the problem is BTLers - the problem is that even the relatively very good new labour government was neo-liberal, and as a result we have had shit government policy and severe underspending for 35 years. I would rather you didn't blame me, but I honestly don't care if you do. I blame tory economic and social policy for decades, including to a large extent under new labour. I blame the tories and people who vote tory... not that the realistic alternatives have been much of an alternative.
  7. Where have I moaned about anything other than it is unfair that debt-free landlords are not facing the same increases in tax? Where have I said that this alleged unfairness is comparable to the unfairness of having been priced out? [Getting into a hierarchy of unfairness is not something I wish to do but I would say helping those who need it and taxing the richest is an obvious start]. Those Dr Ros emails are priceless. I am 100% on the side of the academic (the only one capable of coherent thought IMHO). I love how P118ers seem to love HPCs cos they're buying opportunities and love rises cos they can MEW and are clever people presumable charging the highest rent they can, whilst also leaving themselves room to raise them further if their costs rise. BS on a massive scale. I can understand why you might be angry with me... and I am really not looking for sympathy. I have come on here after years away because I am curious to see thoughts on how the market is heading. I really thought we were going to have a crash 10-12 years ago, but from where I was sat it was a dip followed by inexplicable and utterly insane rises that can only possibly be justifed by a belief that inflation and interest rates are near zero forever and somehow we'll grind through for decades. Brexit and S24 lead me to conclude that maybe we're not gonna get grinding nothing for decades, maybe the shit that should have hit the fan in 2007/08 will actually hit the fan this time. I was sort of preparing for a crash 13 years ago, so I sure as hell better be ready for one now.
  8. Venger. I agree with much of what you, dgul and neverwhere have said. Can't reply to it all!
  9. Venger - I can see your point of view that I have taken two homes from possible owner occupation. But I am able to treat my tenants fairly within the system - ASTs do not force landlords to put the rent up every year or regularly kick out tenants. You criticised me for entering an immoral market. I can hold my head up high and say that my current long term tenants are VERY happy. And they know that I wouldn't hold them to the one month notice period if they had reason to want to leave immediately. I have always told them I have no desire to have an unhappy tenant. When I have complained at unfairness it has only ever been in comparison to the very rich who are debt free and are unaffected by S24... I am not saying that I am being treated unfairly compared to the way you have been treated and are being treated by government. Not least because I don't know you, but also because many in my generation, and most of those younger, have been screwed massively by comparison with older generations. Given your aims would it not be better if the S24 punishment applied to the debt free too? Should anything be done to discourage multi-millionaires from paying cash for BTLs? Or is the stamp duty surcharge enough? I don't blame you for having no sympathy for landlords but why aren't you fuming that the debt free are getting off scot free even though of all landlords they can afford higher taxes the most? Many / most people on P118 / Tribes etc comes across badly. I have met quite a few of them over the years including one who ended up on the run from the police, one who was on TV ripping off tenants and three or four (at least) who are very high profile on those sites who have done nothing wrong as far as I know. I cannot say that many of them are 'my kinda people'.
  10. Either way its in the system now so Landlords with mortgages will have to pay the very high marginal property taxes. Either way its in the system now so many Landlords with mortgages will have to pay the very high marginal property taxes or go bust.
  11. "Its been a long time but iirc you have one rental in East London you bought a long time ago and were very left wing. I dont understand how someone can think doing x is wrong yet do it anyway. " You recall correctly though things have changed a bit since then. I am back because S24 and Brexit might be the trigger for a crash... having spent the last 7 or 8 years thinking we may have got away with it (decades of zero IRs, growth, inflation and HPI was my prediction, but Brexit and S24 change that). I do not think that there is anything wrong with doing the best one can for one's family within the system that you are forced to live whilst also fighting the system that you are in. I also am not opposed to some people being relatively rich and part of that being residential investment property. I am opposed to massive wealth inequality, lack of security of tenure, inter-generational unfairness etc etc. I could not complain if government spending on council housing made my [non]-job as a landlord redundent. Society needs landlords - it would be better if they were all councils and HAs but they aren't.
  12. Funny you should say that Parkwell, but I was thinking just before I read your reply how I can see that many priced out FTBs and other tenants might well take the view that S24 is a good thing even if it brings carnage that spreads well beyond solely affecting landlords. Decades of neo-liberalism and it is inevitable that people make desperate destructive choices. (Brexit, Trump, possibly tenants in favour of S24. To be clear I don't think S24 will be bad for tenants generally, and for many it may enable them to buy at a sensible price... but it is another example - IMHO - of a risky policy that those screwed by neo-liberalism are happy to vote for even thought it might harm them as well as the people they wish to punish.). Assymetric notice is a massive one. Anyone who claims to be a landlord should be able to say to a tenant "you can definitely stay for 5 or 10 years". Venger - in 16 years as a landlord I have only ever once put up the rent mid-tenancy and have never asked a tenant to leave for any reason. The once I put up the rent mid tenancy is on a property that has been occupied by the same people for 10 years and the rent has risen 5% in that time. I bought my first BTL for a very very simple reason. I don't trust stock markets or financial institutions and I do not trust government not to change the rules on pensions. Government were encouraging BTL and I thought - so far rightly - that it was a good bet to provide for myself and my family as I got older. My very simplistic thinking was that if the typical household spends a third of its income on housing then if you own three outright you can get by OK. My plan was to buy buy buy and then sell off a few to pay down debt on the rest. Unfortuntely prices continued rising so by 2003 / 2004 I was on places like this considering when the crash might hit instead of taking on more debt which I thought was too risky even back then. Edit - S24 is VERY unfair for the simple reason is that it punishes those with assets and debt, but does not punish those who are very very rich and do not have debt. S24 is effectively 20% income tax surcharge on higher rate taxpayers who have residential investment property and debt. It would be fair if it were a 20% income tax surcharge on higher rate taxpayers who have residential investment property. I do not object to landlords being asked to pay more (though obviously I would prefer it if Mrs May were to give me a personal exemption); I do object to some landlords being asked to pay more and the richest tory-est landlords not being asked to pay more because they do not have debt. It is hilarious to see the P118ers whine about their mates in the tory party though... did they really think that the tories care about aspirational spivs?
  13. I have tried to get to grips with S24 over the last couple of years and I think I have with regards my own circumstances. I might well come back to that later. Googling again I have just seen this summary which I would like to think is fairly accurate. http://www.telegraph.co.uk/property/buy/buy-to-let-calculator-how-will-new-tax-reduce-your-profit/ Smith & Williamson has calculated that any higher-rate taxpayer landlord whose mortgage interest is 75pc or more of their rental income, net of other expenses, will see all of their returns wiped out by 2020. So mortgage costs above 75pc of rental income will mean the buy‑to‑let investments become loss-making. For additional-rate (45pc) taxpayers, the threshold at which their investment returns are wiped out by the tax is when mortgage costs reach 68pc of rental income. Some current basic-rate taxpayers will also be hit, because the change will push them into the higher-rate tax bracket. Very wealthy landlords who do not need mortgages will be untouched. First thing I have to say - surely it would be better if the last sentence were not true? Surely it would be better if instead of disallowing tax relief at 40% it would be better to surcharge all landlords 20%? Tories do not give a shit about tenants or would-be FTBs any more than they give a shit about ordinary landlords with 1 to 100 mortgaged properties... they only care about those properly at the top. It is almost meaningless trying to come up with examples. I imagine many landlords will be unaffected. I imagine many over-leveraged ones with big portfolios risk trouble short term and massively risk massive trouble if rates rise. But its a bit meaningless without knowing how many landlords fall into each group, and how many rental properties are owned by each type of landlord. I did just do some calcs though. £12,000 rent on a £250,000 property with a £200,000 mortgage. 40% tax payer. £2,000 other costs in addition to interest. Interest Rate Paid || Reduction in profit after tax when S24 has fully kicked in 1.5% || 17.5% 2% || 30% 2.5% || 50% 3% || 75% 3.25% || 100% 3.5% || 140% 4% || 300% In short - this example is probably fairly realistic for a highly leveraged (or slightly lower leveraged but low yield) higher rate taxpayer landlord. Even 30% off of the profit from one or two properties won't make much difference... but its clear that for people paying 3.5% plus (or people who will if / when IRs rise) there are some serious risks. I spent time on HPC and **** as well as landlord forums over a decade ago. The landlords who saw no political risk were clearly morons - anyone with half a brain (ie not Dr Ros) can see if you screw huge swathes of the population year in year out you end up with revolution (or a few scraps to stave off revolution). Likewise - IMHO - S24 will undoubtedly swing the balance of power away from landlords and towards tenants (a good thing)... but to assume that it will go on forever is equally stupid I think. I see it as more likely to be used to "thin the herd" so to speak, before IR rises and an HPC force it to be reversed. At the point that it is reversed (if I am right) then I would expect government to bring in other measures to keep the balance swung back towards tenants, but through different policies - higher tax rate on profit than earnt income attracts [rather than S24 which is same tax but on turnover not profit]; further restrictions on BTL lending; further regulations that cost landlords money and stamp down on bad landlords etc. To be clear here. (1) I could be wrong, S24 could be here to stay. (2) If S24 does get scrapped then this is not going to happen until after some really bad stuff has happend to many landlords. (3) If S24 does get scrapped then this is not the end of policies designed to help tenants and would-be FTBs.
  14. I should not have mentioned S24 in this thread. This thread is about policies to help tenants. I can see that S24 might well help many tenants. My point was that there are numerous things one can do to help tenants and first time buyers which are less of a blunt tool than S24. I will do S24 on another thread. I said 'Cap number of properties a person can own'. Venger said "No one forced you to buy up more than 1 home in the first place to rent out !!! " Erm - cap on numbers being for the benefit of society and potential first time buyers. I wasn't advocating it as a policy to help me!!!!!!!! Venger said - If not then you may believe you're in business of housing people (how many homes have you bought up along the way.. or did you build them?), but S24 is finding out the BTLers as mostly investors (unless they qualify for incorporation relief). I believe that I have invested in property, but that as a landlord I should treat letting out property as a business. I will start another thread re: S24 and / or my personal circumstances sometime.
  15. Venger. Did you try reading what I said, not what you thought I said? Life is not fair. I advocate making it fairer using left wing policies. Part of me would love an HPC. I said "house price crash (which would be destructive in some ways but a very good thing in many ways as well)". It would be good for people who are priced out. It would be good for society in many ways. It would be destructive for some people and some banks and other companies. I posted on this thread primarily to suggest that there are lots of things that could be done for tenants which are not S24. S24 is there to punish individual landlords who use leverage, punish the highly leveraged and help tenants when landlords sell. I would prefer that the law were designed to punish bad landlords, encourage less leverage and help tenants when landlords sell. My post was prmiarily about what could and should be done to help tenants, not S24.
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