hi5lo5
-
Posts
519 -
Joined
-
Last visited
Content Type
Profiles
Forums
Events
Posts posted by hi5lo5
-
-
1 hour ago, Exiled Canadian said:
and never reads a newspaper or watches the news
Apparently Busta watches only Russia Today. May be he knows something we don't know.
-
.
http://www.telegraph.co.uk/investing/buy-to-let/new-buy-to-let-tax-works-andhow-beat/
Claire Williams is one of the thousands of investors to be caught out by the new rules. Now 26, she bought a buy-to-let property in Hayes, west London, in 2014. She also bought her own home in Swanage, Dorset, at the end of last year.
Ms Williams is an “accidental landlord”: she put in an offer to buy the Hayes property before the estate agent told her it had sitting tenants who would remain in the property.
After increasing her deposit by taking a small loan from her parents, Ms Williams bought the two-bedroom house for £242,000, which she called an “absolute bargain”.
Her £168,000 interest-only mortgage costs £290 a month. Her tenants pay £950 a month, but Ms Williams is banking on the property value rising as the house is well located for the Crossrail development, which will cut travel times to London.
She earns £38,000 a year as an IT trainer, making her a basic-rate taxpayer. However, her rental income pushes her into the higher-rate tax bracket, meaning that she will be hit by the new tax
-
1 hour ago, RushRoad said:
If we take and look at two distinct groups of Landlords, those without and those with mortgages
The number of landlords with no mortgage has been growing for the last decade, they are not impacted by any mortgage rules or S24. They are only impacted by the +3% additional stamp duty. Why would hpc expect them also to sell up, or rather why would one expect their increasing numbers to stop increasing post S24 or mortgage changes when neither apply to them?
Clearly the very high leverage landlords will have to sell but the no mortgage landlords might increase in number as they have been doing for a decade. There are of course also people in the middle who have smaller mortgages
So what will the balance be? Could we not see a situation that in 10 years time there are fewer rental properties owned by the mortgaged 5+ property landlords but more by the no mortgage or low mortgage landlords?
Even if Landlords sell up, it is no guarantee of price falls. In the 1971 to 1981 period landlords were big net sellers yet house prices only fell 5% in real terms vs wages (they went up crazy in nominal terms) and again in the 1981 to 1991 period landlords were big net sellers and again nominal prices went up and real prices only fell 5% on the decade.
So it is not necessairly as simple as landlords selling = lowerp rices and landlords buying = higher prices
More recently 1997 to 2000 was a period of zero net growth in the rental sector yet as we know prices went up quite a lot in 1997-2000 so we do not need landlords to drive prices higher. There are other variables at play which seem to be more dominant
This forum or this members of the forum never ever claims all BTLers are going to sell up.
The BTL properties owned outright holds up as long as the interest rates are low. If the interest rates goes up a low yeilds on BTL would be less attractive for most.
Again to echo others, most of the forum members are clear on what is the impact of S24, wear and tear allowance, tenant fees ban, PRA. Its pretty evident who is seeking reassurance.
-
9 hours ago, RushRoad said:
Venger your scenarios are too pessimistic and too unrealistic
Most Landlords are not highly geared but even those that are currently they have good cash flow (post tax profit) as interest rates are low and even post S24 most will not go into negative territory and that assumes both static rents for 4 years and static interest rates
PS I admit what I have just said might not be true for the biggest Landlords as I assume as you own more and more you actually will pay more interest because most the competitive lenders and deals have caps on the number of properties or the total debt. However that is just a pure guess for all I know maybe the Landlords with hundreds have special sweetheart deals but I dont think so.
S24 is one of the many tools that work against the LLs. 10% wear and tear allowance is a big setback along with the new PRA rules. To make things worse the most council's have removed any discounts. If you still think your marginal units are true representation of BTL LLs. Good luck to you.
-
49 minutes ago, mathschoc said:
Quote from Tabloid:
A scarcity of properties coming up for sale means that estate agents are being left with an average of just 43 unsold homes on their books.The lack of supply in the market is continuing to drive house prices up
Quote from Henry Pryor:
The average estate agent has 43 home for sale and last month sold just 8. You might argue that they already have enough that they can't sell
Because agents busy writing ranty letters to the MPs about tenant fees ban.
-
2 hours ago, 2buyornot2buy said:
Couple of points here. Deposits funding lending?? No. Those days are long gone.
You don't know your business model off the top of your head? Seriously?
I run a small business, around 7 ft employees. I can off the top of my head tell you all my key KPIs. I can tell you all the key figures from risk planning. I can tell you my fixed and variable costs, and the various issues that will potentially impact these. It's my business you see. I have to be on top of thesis because it's very basic stuff.
Typical BTLer. You took responsibility for the 7 families as oppose to take shit loads of debts and expect the hardworking families to pay for your debts.
BTLer doesn't need to have a business plan. Just sit back and watch, a debt fairy is about to arrive and rescue you deluded lot.
-
2 hours ago, mattyboy1973 said:
That's an interesting observation. With so much of the typical FTB stock having gone to LLs, and so many typical FTBs now stuck in rental (forever), the first rung of the (alleged) ladder is not gone, since LLs simply keep the stock and don't climb that ladder. So at some point people trying to shift their second homes are going to find that there is no one who can buy them.
Until the lenders deny the consent to let and their alleged pension value gets eroded.
-
2 hours ago, Flopsy said:
It's not worked for me over a number of years and in different areas of the country.
Sellers either stay there or rent it out.
If they don't have to sell they don't. That is until something changes.
I'm trying to find out why so many 4bd houses are on the market and watching to see what happens next. There must be some reason why so many just now.
Typical 4 bed property buyers are the ones already having 2/3 bed flat/houses up sizing their gains. Those properties can only be bought by either a BTLer or a FTBer. SDLT and the S24 paralyzed the BTLers ability to buy. FTBer can't get the mortgage.
-
13 minutes ago, Mapatasy said:
I do hope that you aren't trying to imply that this could somehow impact property prices!
Nope. They saying limit the unsecured lending. People can still MEW their property to fund the lifestyle. Property prices ever only goes up.
-
One of the biggest lenders to the buy to let community, Santander, is to lower its affordability assessments from next Wednesday.
It will use an assessment of 125 per cent rental cover over monthly mortgage payments, and a five per cent affordability rate for buy to let remortgage applications where no increase in borrowing is required.
The bank says this should mean that borrowers already with a buy to let mortgage arranged prior to the new Prudential Regulation Authority guidelines coming into effect - requiring stricter lending criteria - should not be adversely affected if they then remortgage.
-
1 hour ago, Democorruptcy said:
The agents need to start telling people to all hurry up and sell before prices fall due to Brexit, the next recession or interest rates rise, S24 etc. Drum up some business and create panic selling, they want commission on sales don't they?
Wait until the tenant fees ban bite into the profit of EAs. I suppose it's not far away.
No tenant fees, LLs trying to reduce the outgoings to be in the game.
-
https://www.property118.com/cebr-says-house-prices-set-boom-25-4-years/97446/
What will the HPC crowd do now?
They’ve been hanging on for years waiting for their House Price Crash! They hoped the attack on landlords by the Government would bring about their beloved House Price Crash!
Instead it looks like there will be a House Price Climb!
A valid concern from the 118 crowd.
George: S24 & SDLT surcharge will be introduced.
118ers: that's ridiculous, it's unfair. No evidence we create a housing bubble.
HPCers: Hurray. 118 crowd you better sell up before you go bankrupt.
118ers: it's against GAAP principle.
MPs: Nope we are not going to back pedal.
118er: we will create PR stunt by wearing orange t-shirts.
Cherie Booth: This is ridiculous and it is unfair.
Judge: Get back to reality.
BOE : we are concerned about the BTL lending
PRA: We are introducing new rules for BTL lending. We will throw debt junkies under the bus to save the banking system.
118ers: We will put rents up.
Govt: To mitigate this threat, We will ban tenant fees charged by agents.
Market: Nope rents are determined by what people can afford not what you owe to taxman and the bank.
Someone: House price is going up .
118ers: HPCere are losers. They jealous of our success.
HPCer:
-
http://www.rightmove.co.uk/property-for-sale/property-47497992.html
A Two Bedroom Victorian Mid-Terrace offering either a first time or investment buyer ample opportunity for internal improvements offered to the market with ‘Vacant Possession’ and therefore ‘No Onward Chain’.
http://www.rightmove.co.uk/property-for-sale/property-65722748.html
This made me laugh. Let me get this correct someone bought this semi detached house and convert into two flats now has come to the realisation of S24 trying to sell as great investment opportunity. How the numbers stack up post S24 and PRA?
under the new PRA rule from Sep 2017 the lenders have to do a stress test on 5.5% rate with 145% rental coverage. i.e the maximum borrowing capacity for a £1750 is £265k. Then some one has to find the rest of the money to buy this property and wait for the capital gains to raise.
Good luck to the vendor.
-
On 09/04/2017 at 10:58 PM, Bear Hug said:
I don't know what this is and I don't know what they are thinking.
Same size houses on that street go for under £1000 pcm. They called it internship house share and doubled the price.
I hope the EA pays well over the 50k for their interns.
-
-
1 minute ago, Exiled Canadian said:
If you're a BTL Master of the Universe you have risk for breakfast, lunch and dinner.
-
http://www.propertytribes.com/landlord-facing-going-broke-lack-of-advice-t-127629103-6.html
Another one keeps giving. this time MKdong, gloating about his ability to MEW to pay his S24 bills. Someone(known to the forum) trying to explain the PRA guidelines.
QuoteThanks for that - wasn`t aware this was in the offering
that`s def good news and a more forward thinking approach
Barclays asked me for a lot of this kind of info but 60% LTV was their base line.
That was no good for me at the time
TMW also took this portfolio approach about 10 years ago
up to 80% LTV I believe. I took advantage of it in a small way but it had its pitfalls
It had limited success all round I believe. I dont think they do the same product now
Hopefully lessons learned and the structure will be better formed this time round
Forgetting the fact, It's not your choice.
-
3 hours ago, spyguy said:
Its less the 0.2% yield on 90k, and more the exposure to that much housing risk in Reading.
Ive pointed out before that the high paying jobs in the Thames valley are going.
Whats the average wage in Reading these days? A lotless than London, which is not great.
I think its lot less than London @ London house prices. yesterday saw a three bed flat in central Reading for £400k
-
37 minutes ago, spyguy said:
No.
If thats all the buyers could get then thats the price of the house.
This is the point most of the general public when it comes to house prices.
I found this gem from Reading £595k. Basically a 3 bed semi converted into two flats near university area. We discussed in this forum about how it is going to cost dearly for done who made conversion into flats and shot themselves in the foot.
Monthly rent : 1,750 (21k p.a)
Without S24 under the new PRA regulation 5.5% stress tested with 145% rental coverage one can get a mortgage of 260k(350k) with 75% and achieve 0.2% yeild on an investment of £90k.
Again this is only taking in to account of 1k each for maintenance fee and agent fees p. a. and NO S24.
Don't understand why the vendor needs a closed bid.
-
1 hour ago, Bear Hug said:
This could keep me entertained for days. Whoever replied to serendafydd at yahoo.co.uk has a patience of a saint.
-
28 minutes ago, rantnrave said:
Didn't take long after S24 kicked in...
Is this new mortgage the answer to buy-to-let tax crackdown?
http://www.telegraph.co.uk/personal-banking/mortgages/new-mortgage-answer-buy-to-let-tax-crackdown/
Complete bonkers, most BTLers have earnings over the savings interest relief threshold (16k) above that they need to pay tax on the interest earned.
-
16 hours ago, Exiled Canadian said:
Garry's assumption is that corpse fiddlers and BTL landlords are completely discrete groups with no common members......hmmm, dangerous things assumptions
-
Letting fee ban consultation begins today.
Some tenants may choose to undertake their own reference checks and obtain a ‘tenant passport’ that enables them to demonstrate that they are financially and legally able to meet the terms of their tenancy. The Government does not intend to prevent tenants from doing so but intends to stipulate that no agent or landlord should require a tenant to carry out their own reference checks either via the agent or via a third party.
77. As is the case now, agents and landlords should not discriminate against individuals when considering potential tenants for their properties. We are aware of certain landlords rejecting households on the basis that they have children or receive benefits, which is not good practice and strongly discouraged. The Government is keen to mitigate the risk of the ban leading to any increase in discrimination against families and people who receive benefits and believes that the continued use of holding deposits will help to do this since it will ensure that no agent or landlord is left out of pocket as a result of a failed reference check.
78. It is worth noting that where discriminatory practices do occur this is often during the advertisement of a property, before any fees are charged, rather than at the point of taking references or negotiating a tenancy agreement.
79. The current law is clear that agents and landlords must not advertise or let a property in a way that unlawfully discriminates on the basis of a person’s disability, sex, pregnancy/maternity, race, religion or belief, gender reassignment or sexual orientation.
The last point is for Fungus
-
5 minutes ago, Bland Unsight said:
By paying down the leverage on a BTL you always increase the tax cost, even after section is fully tapered in, because of the s24 relief.
It seems to me that the consequence of increase the debt on your own home and decreasing the debt on your BTL are
- you increase the interest expense associated with the mortgage on your own home
- you increase the tax expense on the BTL (because you reduce the interest expense and therefore reduce the amount of s24 relief)
- you decrease the interest expense associated with the BTL mortgage.
In order for this strategy to work the magnitude of the interest saving on the BTL (item 3, which we'll call
needs to be greater than the sum of the magnitude of the new tax expense on your own home (item 1, H) and the magnitude of implicit cost of the lost relief (item 3, R)
Hence order for it to work
B > H + R
Now as all of the defined quantities are positive then it follows that if B > H + R, it must have separately been the case that B > H (i.e. it must be true that it was cheaper to finance your debt on your house than on the BTL).
Hence what is really happening is that prior to section 24 people could reduce the taxable profits on their BTL by shifting debt from their own home to the BTL. Now, post-section 24, people are motivated to increase the taxable profits on their BTL by moving debt in the other direction. As the debt on the PPR has no tax consequences this tactic which you label as "tax efficient" increases taxes.
I am all in favour of buy-to-let investors doing this because:
- it increases the equity available to pay CGT should there be a presently unforeseen forced sale of the BTL
- increasing the equity means a BTL lender is more likely to quickly repossess in the event of arrears on the BTL
- the BTL investor pays more tax
Wether this was intended or not by the architect of the S24. But it's clearly "one silver bullet"
Btl Scum Regrouping And On The Offensive. -- Merged
in House prices and the economy
Posted
https://www.property118.com/general-election-8th-may-earth-landlords-vote/97686/comment-page-9/#comment-89756
Ah but tactics are all important. The landlord candidate can instruct landlords to use their votes in the best possible way, say the day before the election. This could give us some leverage
oh dear, these clowns never realise. "Leverage" what put them in this situation in the first place.