Btl Ramping On Radio 4 Today Programme

[Bland Unsight]

Just struck me that it is worth pointing out that I wasn't all over detail regarding the 1996 Housing Act and actually googled to check before adding the post where I made the quote of Husain's reference to it. Further, after spacedin's challenge I did a bit more digging to double-check that I understood enough of the detail to push back. I am certain that there are posters who already knew all this, but I was not one of them. Hence I learned something as a direct result of spacedin's challenge. This is how it works Ghostly, it is not about "Bland Unsight promoting their great genius in spotting [snip] BTL issues that none of us mere mortals have noticed", it is about enjoying the forum, enjoying the back and forth, googling around, thinking and learning.

It is interesting and fun, and it is a way of protesting in a small way against something which I personally feel is a great wrong.

[MississippiJohnHurt]

For the old timers, Rosie Dullard (avec beard) has a hallowed spot in the hpc hall of fame from first time round. Her coming out from under her bridge again is the best sign of a top I have seen.

Heh had forgotten that but can see it now you've said it. She did look so swarthy with a beard.

[spyguy]

Heh had forgotten that but can see it now you've said it. She did look so swarthy with a beard.

She's popped up in Hull, chairing the city of culture tyhang.

They had a local porn starlet representing the local arts scene. Should have stuck with Poppy Morgan!

Edited April 1, 2016 by spyguy

[19 year mortgage 8itch]

It was an interesting choice of guest to carry the torch for the BTL tw@ts. If the aim was to make them appear to be a bunch of entitled cretins we need to get shot of it was an incredible success.

Blast from the past, http://www.housepricecrash.co.uk/forum/index.php?/topic/106488-rosie-millard-buys-%EF%BF%BD1m-house-at-auction

Even Vanessa Warwick is name checked. 7 years later and dullard probably made a sackful of money on that house she couldn't afford. Talk about moral hazard.

Honestly don't remember how this came about. Memory even fuzzier than socks and Camenbert

Edited April 1, 2016 by 24 year mortgage 8itch

[Bland Unsight]

The blog I linked to at post #151 is probably worth quoting at greater length.

Flexibility v. security

I completely understand why landlords like ASTs but I do get annoyed when I read politicians and landlord groups cite AST’s being popular with tenants who want flexibility.

Most tenants don’t want flexibility, they want a home where they can put down roots and raise their kids. Perhaps young professionals like flexibility but the age of private tenants is rising by the day and when you get older it is security that you want, not flexibility.

Although undeniably AST’s protect landlords from unscrupulous tenants, there is a knock on effect for the community as a whole. A couple of years back I read somewhere that every 3 years, 40% of PRS tenants have moved. How does this help children’s education or the sustainment of communities?

TIme to end the see saw

Can I float out a bit of a heresy here? And say, why not change the law to make it easier for landlords to get rid of bad tenants whilst at the same time stopping people losing their homes when they have done nothing wrong?

Yes I know this is a big, sweeping statement, it would require a major re-write of the law, involving pulling apart a lot of basic legal tenets but we created these laws, surely we can re-jig them?

Prior to the Housing Act 1988 the law was restrictive and all the toys were in the tenant’s pram. The ’88 Act reversed this, but surely, as we progress into the 21st Century we need a landlord/tenant legal system that works for both parties?

Otherwise the situation will continue to see-saw, where one party can’t see their interests being advanced without the other side being on the down-slide and we end up in a “Four legs good-Two legs bad” scenario.

Time then, not for a new law so much as a re-think about the needs of landlords and tenants in 2013. Neither the Rent Act 1977 nor the Housing Act 1988 offers much in this way. 25 years?….Jeez, time for a major reappraisal.

Source: Landlord Law Blog, Assured Shorthold Tenancies 25 years on – time for a change? Ben Reeve-Lewis, 28 October 2013.

[Bland Unsight]

Even Vanessa Warwick is name checked. 7 years later and dullard probably made a sackful of money on that house she couldn't afford. Talk about moral hazard.

I've started thinking about it as viral twatishness; if you keep rewarding people for loading up with debt and taking a punt on houses, then lots of people will load up on debt and take a punt on houses, delivering more gains and more twatishness. It screams bubble.

[Bland Unsight]

Blast from the past, http://www.housepricecrash.co.uk/forum/index.php?/topic/106488-rosie-millard-buys-%EF%BF%BD1m-house-at-auction

That is not right. [Shivers]

[Bland Unsight]

Quote

Charles McDowell, commercial director of mortgages for Aldermore, said: "We have seen a couple of cases of people using their pension to get into buy-to-let but there is nothing that would indicate any trend."

Pension freedoms haven't led to buy-to-let boom, FTAdviser, 15 November 2017

 

[Ah-so]

2 hours ago, Beary McBearface said:

Pension freedoms haven't led to buy-to-let boom, FTAdviser, 15 November 2017

 

What happened to the wall of money that was going to flow into BTL? 

I think that you need to forward this article to a certain BBC reporter. 

[dgul]

What is interesting is that there seems to be some that are buying outright.

The suggestion is that this is because of barriers they've introduced for BTL.  But another way of looking at it is that investors are no longer thinking of capital appreciation, but just of the longer term return through the rent.  There might also be a concern about a slight risk of capital loss -- if you're thinking only of the rental return then a slight capital loss on its own is bearable, but a capital loss with a highly geared investment might lead to what is effectively a margin call, with resultant loss of all of the capital and the rental return.

[LittlePig]

34 minutes ago, dgul said:

What is interesting is that there seems to be some that are buying outright.

The suggestion is that this is because of barriers they've introduced for BTL.  But another way of looking at it is that investors are no longer thinking of capital appreciation, but just of the longer term return through the rent.  There might also be a concern about a slight risk of capital loss -- if you're thinking only of the rental return then a slight capital loss on its own is bearable, but a capital loss with a highly geared investment might lead to what is effectively a margin call, with resultant loss of all of the capital and the rental return.

I know people that buy houses outright. They think it is a choice between rental income, or money in the bank (earning low interest). Not financially sophisticated I think is the right phrase.

[dgul]

3 hours ago, LittlePig said:

I know people that buy houses outright. They think it is a choice between rental income, or money in the bank (earning low interest). Not financially sophisticated I think is the right phrase.

It is a peculiarity of our time.  I think these people will come to realise that housing isn't necessarily a safe investment.  Indeed, IMO it is both essential and inevitable that people eventually come to realise this.  The problem is, how much time needs to elapse before 'inevitable' comes (they've managed to delay it 10 years so far).

[Si1]

11 hours ago, LittlePig said:

I know people that buy houses outright. They think it is a choice between rental income, or money in the bank (earning low interest). Not financially sophisticated I think is the right phrase.

This attitude is rife. 

[jiltedjen]

I actually don’t really mind people buying houses outright. Only a very small percentage of people can do that. and it does not increase the money supply to banks. slightly more secure for the tenants and more likely that there’s money for repairs. They can price lower than ‘the market’ in rent to get the best tenants. might be a crap yield these-days, but if your only after whatever small income you can get pretty secure. 

its the hoardes of dumb money driving up prices and driving yields to nothing, out-bidding real people, just because they are brainwashed morons that annoy me. and those are the people doing the damage. real amateurs. terrible for the tenants, over stretched, can’t afford to maintain. only in it for. ‘Mad gains’ 

[Ah-so]

12 hours ago, dgul said:

What is interesting is that there seems to be some that are buying outright.

The suggestion is that this is because of barriers they've introduced for BTL.  But another way of looking at it is that investors are no longer thinking of capital appreciation, but just of the longer term return through the rent.  There might also be a concern about a slight risk of capital loss -- if you're thinking only of the rental return then a slight capital loss on its own is bearable, but a capital loss with a highly geared investment might lead to what is effectively a margin call, with resultant loss of all of the capital and the rental return.

Some might be buying outright, but they would be insane to do so with their pension because of the income tax on withdrawals, unless you can do it with your 25% tax free lump sum.

[dgul]

9 hours ago, Ah-so said:

Some might be buying outright, but they would be insane to do so with their pension because of the income tax on withdrawals, unless you can do it with your 25% tax free lump sum.

I've chatted with people intending to do just that.  Yup, they're insane.

[Si1]

19 minutes ago, dgul said:

I've chatted with people intending to do just that.  Yup, they're insane.

People like this are the reason there will be a deep cyclical trough in house prices, one day. So much future demand being used up all at once.

[spyguy]

37 minutes ago, dgul said:

I've chatted with people intending to do just that.  Yup, they're insane.

Cant be many.

Youd need a pension pot of 800k+ for that to be viable.

Ive heard of a couple of cash ourchases. They can be performing well. Voids are hammering them.

[Ah-so]

1 hour ago, dgul said:

I've chatted with people intending to do just that.  Yup, they're insane.

I think that they change their minds when they realise how much tax they will need to pay to draw down on their pension

[Ah-so]

duplicate

Edited November 21, 2017 by Ah-so

[spyguy]

10 hours ago, jiltedjen said:

I actually don’t really mind people buying houses outright. Only a very small percentage of people can do that. and it does not increase the money supply to banks. slightly more secure for the tenants and more likely that there’s money for repairs. They can price lower than ‘the market’ in rent to get the best tenants. might be a crap yield these-days, but if your only after whatever small income you can get pretty secure. 

its the hoardes of dumb money driving up prices and driving yields to nothing, out-bidding real people, just because they are brainwashed morons that annoy me. and those are the people doing the damage. real amateurs. terrible for the tenants, over stretched, can’t afford to maintain. only in it for. ‘Mad gains’ 

Agreed.

[dgul]

14 minutes ago, Ah-so said:

I think that they change their minds when they realise how much tax they will need to pay to draw down on their pension

Possibly.  I get a sense of frustration with them, that they could be doing better with their pension, but that they're restricted.  They're blind to the reality, of course, but that's what they're thinking.

[These are all defined benefit, so they see their benefit going up by CPI/RPI each year, while others that went into BTL have seen their return double (say).  That sort of thing.   They've not been able to 'take their money out', but the pensions have been changed so that they now can.  I don't think 'risk' is part of their thinking, other than, perhaps, 'they'll not let that happen']

[Ah-so]

3 minutes ago, dgul said:

Possibly.  I get a sense of frustration with them, that they could be doing better with their pension, but that they're restricted.  They're blind to the reality, of course, but that's what they're thinking.

[These are all defined benefit, so they see their benefit going up by CPI/RPI each year, while others that went into BTL have seen their return double (say).  That sort of thing.   They've not been able to 'take their money out', but the pensions have been changed so that they now can.  I don't think 'risk' is part of their thinking, other than, perhaps, 'they'll not let that happen']

The numbers as an investment do not really add up. Say they invest in a 1-bed flat and most of the lump sum is withdrawn at an average 30% marginal rate of tax:

Flat £150,000; net yield 2% p/a =£3,000

Deposit: £45,000; Stamp duty: £6,500

Tax on withdrawal of lump sum: £22k.

It would take 8 years just to repay the tax - the joys of the retirement income.

OK, it does work better if you are newly retired and can use your lump sum to invest in BTL, but you have always been able to withdraw the 25% at retirement, so it is not a change.

[LittlePig]

22 minutes ago, Ah-so said:

The numbers as an investment do not really add up. Say they invest in a 1-bed flat and most of the lump sum is withdrawn at an average 30% marginal rate of tax:

Flat £150,000; net yield 2% p/a =£3,000

Deposit: £45,000; Stamp duty: £6,500

Tax on withdrawal of lump sum: £22k.

It would take 8 years just to repay the tax - the joys of the retirement income.

OK, it does work better if you are newly retired and can use your lump sum to invest in BTL, but you have always been able to withdraw the 25% at retirement, so it is not a change.

But prices always go up.