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Buy-To-Let Landlords And Retirees Risk Squeezing Out First-Time Buyers

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Guardian article, mostly talking about the effect of the pension changes on the housing market.

First-time buyers have been warned that they face increasing competition for properties as figures showed that buy-to-let landlords are looking for mortgages with deposits averaging almost £100,000.

Data from the Mortgage Advice Bureau (MAB) based on searches through the UKs main price comparison sites showed that in the final quarter of 2014, people searching for a buy-to-let mortgage typically said they had £99,914 in equity to put down.

...

Savings provider Scottish Friendly suggested first-time buyers have just months left to buy a house or risk missing out on the chance of getting on the property ladder for years to come".

...

The baby-boomer generation has always had an unhealthy obsession with property, said Neil Lovatt, director at Scottish Friendly.

This has been manageable, even beneficial to the economy when people slowly climbed the property ladder. But the new pension rules will essentially bankroll a generation, allowing them to buy into an already over-inflated market in the expectation that it will help fund their retirement.

...

[continues...]

http://www.theguardian.com/business/2015/mar/02/buy-to-let-landlords-and-retirees-risk-squeezing-out-first-time-buyers-data-shows

Well this is going to be just great.

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See that they are doing? They are telling pension fund raiders everyone else will be piling into buy to let.

As far as I am concerned it's propaganda

quick, before you Miss out.

Edited by TheCountOfNowhere

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I predict that the pension rules will have fck-all affect on the number of rental houses.

0.00001% of pensioners have a big enough DC pension to even consider this.

There's no way on earth any advisor would let a DB pension be drawn out to buy a rental.

You'd need a prettyhigh-level FA to close down a DB pension.

These FAs are heavily regulated.

Most of the 2002-2008 BTLers will either be looking to sell or being made bankrupt by their bank.

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I predict that the pension rules will have fck-all affect on the number of rental houses.

0.00001% of pensioners have a big enough DC pension to even consider this.

There's no way on earth any advisor would let a DB pension be drawn out to buy a rental.

You'd need a prettyhigh-level FA to close down a DB pension.

These FAs are heavily regulated.

Most of the 2002-2008 BTLers will either be looking to sell or being made bankrupt by their bank.

I do hope you are correct. I thinks some 'about to be pensioners' will have enough funds to get into buying toilets however I suspect that:

a/ most won't have enough dosh and

b/ the brighter ones will realise that this is not a sensible thing to do in an overheated market with all the potential hassle that buying toilets brings.

Edited by dougless

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I predict that the pension rules will have fck-all affect on the number of rental houses.

0.00001% of pensioners have a big enough DC pension to even consider this.

There's no way on earth any advisor would let a DB pension be drawn out to buy a rental.

You'd need a prettyhigh-level FA to close down a DB pension.

These FAs are heavily regulated.

Most of the 2002-2008 BTLers will either be looking to sell or being made bankrupt by their bank.

Curious to know why you say this?

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I shall very probably use my pension lump sum to buy a house.

After all, being over 40 I won't qualify for the government's latest giveaway. Just as I never qualified for earlier giveaways of my money. :wacko:

Edited by porca misèria

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And when we get the full HPC....all these BTL Pensioners will be signing up for the Poor House as their cash pile will be blown away before they hit 65..........................

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I think this will be a big shot in the arm for the market initially.

HTB didn't have a huge uptake but its effect on sentiment was enough to fuel this mini boom.

And all it's doing Is continuing the trend. We've already got lots of boomers driving BTL.

And the meme of "it's my pension innit" from the blue rinse brigade is pervasive.

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There are two very different strands to this.

First, the whole economics stuff. This says it is or isn't a good investment to go into property. When the economic prospects of property have dipped in recent years, there have been QE and other schemes to prop them up.

More important - especially at election time - is the social side of things. More and more people seem to be realising that it just isn't right/fair for one group of people to gain so much at the expense of another. This, I think, is the key argument. Only when this takes hold and is accepted even more widely than it is at the moment will the props which affect the first argument be taken away, and we wil have the Great Correction.

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And when we get the full HPC....all these BTL Pensioners will be signing up for the Poor House as their cash pile will be blown away before they hit 65..........................

At which point the demographic power will lie with later generations who will vote for less pensioner entitlements

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I think this will be a big shot in the arm for the market initially.

HTB didn't have a huge uptake but its effect on sentiment was enough to fuel this mini boom.

And all it's doing Is continuing the trend. We've already got lots of boomers driving BTL.

And the meme of "it's my pension innit" from the blue rinse brigade is pervasive.

Yes

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I'm looking forward to renting some of these pensioner BTL's in my old age. Should be plenty at cheap prices in non-metropolitan areas.

:)

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Curious to know why you say this?

Most 2002-2008 BTL were IO-only, high LTV mortgages.

The banks/BS that made these loans are in various states on insolvency - which should give you a clue to how well their customers are doing.

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Most 2002-2008 BTL were IO-only, high LTV mortgages.

The banks/BS that made these loans are in various states on insolvency - which should give you a clue to how well their customers are doing.

Won't the government just bail them out again. It all depends if the piper ever calls for his money doesn't it?

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The pension change that would concern me most is if the rules were changed to allow property to be held within a pension. If that happened, and it's not impossible, then a pensioner could hold a BTL property within their personal pension, so there would be no need to remove cash from the pension wrapper and hence no tax liability.

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The pension change that would concern me most is if the rules were changed to allow property to be held within a pension. If that happened, and it's not impossible, then a pensioner could hold a BTL property within their personal pension, so there would be no need to remove cash from the pension wrapper and hence no tax liability.

To a certain extent you can - SIPPs can hold commercial property.

You'd struggle to directly hold an individual property within a pension.

The upkeep + cash handling would be a nightmare.

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The pension change that would concern me most is if the rules were changed to allow property to be held within a pension. If that happened, and it's not impossible, then a pensioner could hold a BTL property within their personal pension, so there would be no need to remove cash from the pension wrapper and hence no tax liability.

You can already hold rental property in a pension scheme. So long as it's shares in a qualifying company whose business is property rentals.

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To a certain extent you can - SIPPs can hold commercial property.

You'd struggle to directly hold an individual property within a pension.

The upkeep + cash handling would be a nightmare.

If the rules change to allow it, I'd buy an individual house in my pension fund. Be my own landlord. Buying with low-taxed money would likely tip the balance in favour of it.

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The pension change that would concern me most is if the rules were changed to allow property to be held within a pension...

Me too. The overriding issue so far seems to be that pension pots are disregarded for means-tested benefits and care costs, but 2nd properties aren't (nor 1st property for residential care), so I doubt the future will prove much of a gift to many except structured product originators, brokers and the taxman.

If second homes could be held in a pension, things can go very wrong.

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Spyguy/Porca Miseria, the change I'm thinking of is one that would allow an individual BTL property to be held within a self-invested personal pension. There are a few pundits speculating that the forthcoming budget might allow that.

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Well, if they did that it would simply accelerate the steady move away from the "property owning democracy" rendering their Party as a minority for the long term when other Parties arise to represent renters.

Yes, but you know that no political party can ever be accused of clear thinking and consistent actions. They are all inveterate tinkerers and fiddlers, so they'll busily adjust one part of the machinery to go in a certain direction while simultaneously setting another part of the machinery off somewhere completely different. That's how you get proposals to build 200,000 starter homes alongside HTB. And it would be no different here, property owning democracy would get squeezed by one hand and petted by the other.

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