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Posts posted by kilroy

  1. 1 hour ago, Lavalas said:

    Who's really going to read a 78 page report by some Doc trying to pass off her ranting as anything approaching official. I am literally obsessed by the soap opera of these goons and the huge effect they have on my life and I can't even be bothered to read the introduction and conclusion. Although I couldn't resist looking for the inevitably heartbreaking examples and was pleased to see one from Fly-to-Debt Cooper.

    I just rest easy in the knowledge that those in charge of policy see through these types of things for what they are and they are more than capable of brushing aside any of the 'facts' it presents.

    Your typical leveraged goon is now a little bit poorer with a lot less time and still f**cked. Great campaigning guys. 

    The report is written in the same way as her numerous emails to MPs/treasury officials/shelter etc I.e. In a way that ensures that no-one would want to read past the first paragraph or so.

  2. 23 minutes ago, spyguy said:

    500k LLS.

    And 1m+ undeclared LLs.
    Shame that most BTL LLs did not register with HMRC and declare their rental income.

    Ids hard to lobby for tax advantages when youve been dodging tax.

    It's almost like a super targetted land value tax akin and to HMRC saying "you're a leveraged landlord thus you'll become a higher rate tax payer) 

  3. 12 minutes ago, FreeTrader said:

    3.3b is a killer if the lender chooses to implement...basically a lender has to take into consideration the mortgage interest relief tax liability on a landlord's whole portfolio if he has over 4 properties.

  4. https://www.property118.com/capital-gains-on-btl-to-be-taxed-as-income/89928/comment-page-6/#comments

    Mark says:

    "However, by moving to Malta I was able to solve this problem. I sold a few properties to release equity without CGT and now I am in a strong position with real choices. I now have the funds required to pay for incorporation without the CGT headache."

    But just a few weeks ago he said that he had only sold a single property and from the date given, that one would not need to be reported to HMRC until 29 August (if be "sold" he means exchange of cash rather than the estate agent's optimistic usage of the term):

    "I became a resident of Malta on 24th Feb this year and only completed my first sale yesterday so it is too early to answer your other question yet. By all means remind me in a few months time.

    I have another sale ready to exchange this coming week which should complete next month, one at early contract stages and another two on the market."

    Given that he has not even had to have a discussion with HMRC on the status of his sales, to claim that he had made several sales without CGT is laughable.


    Also, it appears that there are anti forestalling measures implemented from March 2016, thus could be that even if Mark is getting rid of them prior to the rule coming in, he could still be stung.....

  5. http://www.telegraph.co.uk/personal-banking/mortgages/another-lender-clamps-down-on-landlords---but-could-brexit-rescu/

    It seems the answer is "yes", and I was expecting the reasoning to be that a new chancellor may repeal Clause 24 and additional stamp duty....

    Edit: just to clarify, I don't believe it, but thought it was a hilarious piece, especially imagining epxpectant look on a 118er's face become one of terror as they realise that it won't save their leveraged @rses.

  6. Apparently he's not the only one:

    From Paddles's opening post on Margin Calls On Buy To Let Properties:

    And thanks to Paddles and the Wayback Machine we can finally get eyes on those MX T&Cs:


    Having only briefly scanned the pdf the following clauses stand out as also being potentially interesting (my emphasis):

    If Paddles is correct and the MX mortgage offer conditions define the acceptable LTV ratio (which seems reasonable) then failure to make payments rectifying LTV breaches could allow interest rate hikes under clause 2(c )?

    has anyone told busta yet?

  7. Interestingly, over at Poverty118 Mark Alexander, has actually said the moves make sense and that BTL "should be an investment to provide positive cashflow" even acknowledging that his view might be considered "controversial" to those speculating on capital appreciation...

    Maybe he's happy because he will not have to pay CGT in Malta (or indeed in the UK as there won't be any capital gains....!)

  8. Call me a pessimist, but I don't see anything in the paper that indicates the BOE is expecting an ICR ratio of 125% using net income.

    On my reading of the paper, they will only be expecting at least 100% coverage of the 5.5% stress rate taking into account all of the expenses listed (including tax and voids).

    They also expect that this is likely to be a more stringent requirement than the current standard of 125% coverage using gross income and not asking any questions about expenses or tax liabilities.

    Also there appears to be a loophole in that they can ignore the effect of changes in interest rates (and the 5.5% minimum) if "the interest rate is fixed for a period of five years or more from that time, or for the duration of the buy-to-let mortgage contract if less than five years."

    True. The 125% thing is something that the lenders do themselves for risk management. It could be that the 25% of the "125%" was the lenders' way of accounting for tax/management/voids etc which seems way outdated now. HOwever, I do believe that lenders will have a hard time justifying anything less than 100% interest coverage, which would still put required gross yields in double figures.

  9. Is this to do with the new Basel regulations? Even based on 2010 house prices, this wonderful chart suggests rental yields were generally around 5%... https://www.lendinvest.com/buy-to-let-index/rental-yield/. Bizarrely they map that against current rental prices?!

    ...so you can only let 70% LTV to BTL "investors" at 2010 prices (I haven't checked the maths on the 6.9% but it sounds plausible). In reality, prices have increased since by 15-20% according to the Land Registry (nationwide). In London, they're up 60%...so if London house prices fall 25%, landlords will still have to stump up 40% deposits

    To me, that sounds like a huge deal and kills BTL...but it was going to die when the greatest fool found himself unable to cover the extra 3% stamp duty in April...

    6.9% is just 5.5% * 1.25. However it looks like this is to include the running costs and tax thus is the hurdle for the net yield, as opposed to gross. When you consider the removal of interest relief, I am guessing you need double digit gross yields to even be considered for a BTL mortgage.....

  10. here it is, the fear:


    Any reduction in buytolet activity and lower buytolet mortgage stock will lead to a

    reduction in short term revenues for lenders and mortgage brokers. While affected firms may be able to recover some of the reduction in revenues by lending to owner occupiers or other business activities in the economy, we think some more affected firms may find it difficult to recover lost revenues. Some buy tolet investors could see an impact on their ability to obtain a buytolet mortgage and/or the profitability of their lending activities due to higher deposit requirements. However, affected investors may be able to find returns in other investment opportunities

    Thats the Regulator...not regulating until its too late in the name of growth.


    Looks like HMRC are going after the leveraged landlords and BoE are going after the purveyors of such leverage...
  11. 125% rent to mortgage cover at 5% rate on loan.

    Not exactly earth shattering.

    I see that they want the mortgage company to take into account the borrowers tax implications. Might put a halt to releasing equity that leaves you short of your capital gain liability

    if they are taking tax into consideration plus running costs then that means, if affordability is tested against rates of 5.5%, a property *has* to clear a *net* yield of 6.9%.......

  12. I just think he is a bit thick.

    I don't mean that in a pejorative way but he is completely incapable of considering other alternatives.

    His bluster adds nothing to the debate. I learned nothing from his posts except that he is thick. I have wasted five minutes of my time reading and writing about his thickness.

    At leaste mark had a couple of brain cells and would steer the convo. He posts much less than before and the forum has deteriorated as a result.

    He's busy quietly unwinding his portfolios while his thicko forum members wait for Osborne to see the light......

  13. This is one of the best things about this IMO because if they ever managed to convincingly make the argument that they were sole traders and always had been (which they can't because land-based income streams are treated as investments under UK law, but lets humour them) then they would all suddenly owe a lot of backdated NICs payments, would be utterly unable to go into tax exile (because where a trade is carried out in the UK that trade is subject to UK tax, regardless of the tax residence of the trader) and would definitely lose their appeal against West Brom.

    Bring it on ;)

    Some guy was on property118 pointing out that BTL activity could be split into 2 activities; one was property management and the other was investment. He pointed out that hmrc could make the argument that the trading/business that btl was engaged in (property management) could be offset against rental income from the investment side, but that the market price of property management was at most 15% of the rental income. As a result, it would cost Hmrc nothing to make the argument as this cost is deductible anyway, which leaves the "btl is a business and interest should be deductible" argument of the landlords in ruins.

  14. As a landlord who can give you a balanced view let me explain the 118 position. I too believe that I have never taken a property from a FTB'er. I believe this actually fits the same position being used for the West Brom case. It is quite complex so let me explain.

    This is where someone advocates one objective while simultaneously proposing an action that guarantees a diametrically opposed outcome. There is a technical term for this; it’s called lying. <_< But being generous for some it maybe just denial. ^_^

    Phil, (or any other landlord) genuine question here: is it possible for an individual landlord to not pay NIC but still take the rent as income? I guess in this case it would be classed as investment income?

  15. They don't pay CGT on their main residence.

    We should methodically knock down everyone of Mark's suggestions. For example, his assertion that landlords should be eligible for the rent-a-room scheme to level the playing field However, a tenant is already eligible to sub let a room in his rental on the rent a room scheme (subject to tenancy agreement). What he seeks is a further erosion of tenants rights under the auspice of a level playing field.

  16. 2.114 Support for Mortgage Interest (SMI) – During the recession, the SMI scheme was temporarily set at a higher capital level with a shorter waiting period. Summer Budget 2015 announces that, from 1 April 2016, the SMI waiting period will return to the pre-recession length of 39 weeks, but the capital limit will be maintained at the higher level of £200,000. From April 2018, new SMI payments will be paid as a loan. Loans will be repaid upon sale of the house, or when claimants return to work. Payments will accrue interest at a rate tied to the OBR forecast of gilts. (49)

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