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Turnabout on property tax break puts market into chaos

THOUSANDS of investors are feared to have lost their deposits on buy-to-let properties bought off the plan after the Treasury scrapped a tax break on residential property this week.

As many as 5,000 London flats are thought to have been sold off the plan to investors hoping for a 40 per cent tax rebate after placing the property in a self-invested personal pension (Sipp).

But on Monday the Chancellor backtracked on his own rules before they were to come into affect on April 6 next year. Residential property placed within a Sipp would not, as he promised two years ago, qualify for tax relief, he said.

Alastair Stewart, a property analyst at Dresdner Kleinwort Wasserstein, said that he had been told by top London estate agents that “considerable” numbers of investors had put deposits on off-plan properties that they intended to place in their Sipps as buy-to-lets. The typical deposit for such a property is 15 per cent of the asking price.

“They’re not going to complete,” he said. “I’ve heard from various places today that people are in an absolute panic about it.”

more at

http://business.timesonline.co.uk/article/...1915103,00.html

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But mortgage brokers have given warning that the market for new-build buy-to-lets is overheated, with prices soaring above the true value of the properties.

The Mortgage Works, the broker owned by the Portman Building Society, said on Monday that it would no longer give buy-to-let mortgages on newly built properties, but only on those aged one year or more. The broker said that the market was overheated, with developers doing deals on the property price that, in effect, defraud lenders.

Matthew Wyles, group development director at the Mortgage Works, said: “Owing to the current oversupply of newly built property, valuation in this sector is more of an art than a science . . . We’ll go back into new-build buy-to-let when we believe that the market forces of supply and demand have reached equilibrium”.

As discussed in another thread. Are the lenders finally getting spooked?

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Some useful data points at the foot of that article...

'Turnabout on property tax break puts market into chaos':

http://business.timesonline.co.uk/article/...1915103,00.html

MORTGAGE RISE
  • Value of buy-to-let mortgages outstanding in 2004: £52.2 billion
  • Value of buy-to-let mortgages outstanding in 1999: £5.2 billion
  • Increase in number of buy-to-let mortgages outstanding from 1999 to 2004: 718 per cent
  • Increase in October of consumers approaching moneysupermarket.com for advice on buy-to-let mortgages: 25 per cent
  • Percentage of all mortgages that are buy-to-let mortgages in arrears: 0.7 per cent
  • Top five buy-to-let mortgage lenders in the UK: Mortgage Express, Birmingham Midshires, The Paragon Group, Cheltenham & Gloucester, Bristol & West

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This is a rather strange measure IMO. Why don't they tell us what the percentage of BTL mortgages in arrears is out of all BTL mortgages I wonder?

Indeed it is.

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“They’re not going to complete,” he said. “I’ve heard from various places today that people are in an absolute panic about it.”

Ha ha ha ! I'm running out of champagne, I think I'd better get some more in.

The broker said that the market was overheated, with developers doing deals on the property price that, in effect, defraud lenders

This has been known about for some time hasn't it - but as ever no-one seems to have really batted an eyelid. Just proof it were needed though, that this whole Ponzi scheme called the UK housing market has been propped up by FRAUD at all levels of the system.

Let them all burn.

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This is a rather strange measure IMO. Why don't they tell us what the percentage of BTL mortgages in arrears is out of all BTL mortgages I wonder?

Well

£800,000,000,000 mortgage debt

£52,000,000,000

1/15th of all mortgage debt is BTL.

that makes more..?

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Guest wrongmove

This is a rather strange measure IMO. Why don't they tell us what the percentage of BTL mortgages in arrears is out of all BTL mortgages I wonder?

Specific BTL mortages are often quoted as making up 7% of the total. So that would be 10% of them in arrears.

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Ha ha ha ! I'm running out of champagne, I think I'd better get some more in.

This has been known about for some time hasn't it - but as ever no-one seems to have really batted an eyelid. Just proof it were needed though, that this whole Ponzi scheme called the UK housing market has been propped up by FRAUD at all levels of the system.

Let them all burn.

Too right Warwickshire Lad!!! As I said many times - http://www.housepricecrash.co.uk/forum/ind...showtopic=19113 - FRAUD is out there in a BIG way...... and - has anyone noticed that the Daily Mirror tipsters are convicted of talking up the market - http://news.bbc.co.uk/1/hi/business/4507774.stm - and YET - the WHOLE MEDIA - including BBC is tipping property THE WHOLE TIME!!!!??????

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Ha ha ha ! I'm running out of champagne, I think I'd better get some more in.

Tesco's has some half price, from £20 down to £10. Bought some today for New Years Eve. Not sure what brand though.... :huh:

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Too right Warwickshire Lad!!! As I said many times - http://www.housepricecrash.co.uk/forum/ind...showtopic=19113 - FRAUD is out there in a BIG way...... and - has anyone noticed that the Daily Mirror tipsters are convicted of talking up the market - http://news.bbc.co.uk/1/hi/business/4507774.stm - and YET - the WHOLE MEDIA - including BBC is tipping property THE WHOLE TIME!!!!??????

Unfortunately, the housing market is not regulated by the Financial Services Authority, unlike the stock market, which is.

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Tesco's has some half price, from £20 down to £10. Bought some today for New Years Eve. Not sure what brand though.... :huh:

After the first bottle the brand is not particularly relevant. :lol:

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Turnabout on property tax break puts market into chaos

THOUSANDS of investors are feared to have lost their deposits on buy-to-let properties bought off the plan after the Treasury scrapped a tax break on residential property this week.

As many as 5,000 London flats are thought to have been sold off the plan to investors hoping for a 40 per cent tax rebate after placing the property in a self-invested personal pension (Sipp).

But on Monday the Chancellor backtracked on his own rules before they were to come into affect on April 6 next year. Residential property placed within a Sipp would not, as he promised two years ago, qualify for tax relief, he said.

Alastair Stewart, a property analyst at Dresdner Kleinwort Wasserstein, said that he had been told by top London estate agents that “considerable” numbers of investors had put deposits on off-plan properties that they intended to place in their Sipps as buy-to-lets. The typical deposit for such a property is 15 per cent of the asking price.

“They’re not going to complete,” he said. “I’ve heard from various places today that people are in an absolute panic about it.”

more at

http://business.timesonline.co.uk/article/...1915103,00.html

Diddums

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Unfortunately, the housing market is not regulated by the Financial Services Authority, unlike the stock market, which is.

Isn't is AMAZING!???? - Housing Market - where more money is exchanged than ANYWHERE else - and NO regulation!??? Anyone think this should change NOW???

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and then we could regulate the car market, then bicycles etc. not wishing to sound flippant, but where does it stop? some cars cost more than a terrace house.

Good point, Benjamin. The first extension of regulation (if any) should really be to the sale of credit cards. Some johnny in a B&Q outfit sold me one whilst representing that it was a store loyalty card (I know, I know, but I was trying to be kind and they looked very depressed.) It was only when the terms and conditions appeared on the computer screen (after the completion of the application) and I said "Hang on - is is this a credit card?" that she fessed up. All they took was my name and postcode... and 6 months later I'm still arguing with GE Capital who seem incapable of cancelling my account (they've promised me that the search has been removed from my record, but who knows?). Hours and hours of time wasted.

Even though I'm an FSA approved person and knew I was on a hiding to nothing, I called the FSA to find out if they have started covering credit. Nope: they sent me to the local Trading Standards people... with the predictable result of bugger all happening.

Credit is completely missold at the moment (perhaps that's why there's so much of it about). Even used car warranties are FSA regulated.

At least with a house there's a solicitor involved somewhere.

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Good point, Benjamin. The first extension of regulation (if any) should really be to the sale of credit cards. Some johnny in a B&Q outfit sold me one whilst representing that it was a store loyalty card (I know, I know, but I was trying to be kind and they looked very depressed.) It was only when the terms and conditions appeared on the computer screen (after the completion of the application) and I said "Hang on - is is this a credit card?" that she fessed up. All they took was my name and postcode... and 6 months later I'm still arguing with GE Capital who seem incapable of cancelling my account (they've promised me that the search has been removed from my record, but who knows?). Hours and hours of time wasted.

Even though I'm an FSA approved person and knew I was on a hiding to nothing, I called the FSA to find out if they have started covering credit. Nope: they sent me to the local Trading Standards people... with the predictable result of bugger all happening.

Credit is completely missold at the moment (perhaps that's why there's so much of it about). Even used car warranties are FSA regulated.

At least with a house there's a solicitor involved somewhere.

WHAT!!??????? The solicitors don't give a d..m!!! I'm talking about regulation to STOP MARKET/PRICE FIXING!!!!! Which is RIFE!!!!

Edited by eric pebble

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Residential property placed within a Sipp would not, as he promised two years ago, qualify for tax relief, he said.

Surely, that is a spelling mistake. Should it not be pwomised.

tantrum,0.jpg

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w

tantrum,0.jpg

I pressed that link at least Eight times - just won't work for me! :unsure::unsure:

:lol:

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Surely, that is a spelling mistake. Should it not be pwomised.

tantrum,0.jpg

:lol::lol::lol: Classic

I really am having a laugh about all this SIPPs business.

I have ABSOLUTELY no sympathy for anyone whose lost their deposit because of property SIPPS and will be really annoyed if they even think about attempting to get compensation for their own greed.

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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