OnionTerror Posted May 13, 2015 Share Posted May 13, 2015 http://www.bbc.co.uk/news/magazine-32065625 It'll be political suicide, especially for the Tories... Quote Link to comment Share on other sites More sharing options...
Killer Bunny Posted May 13, 2015 Share Posted May 13, 2015 No. And they should not. They should stop intervening. #banHTB #letmktsetrates Quote Link to comment Share on other sites More sharing options...
Mrs Bear Posted May 13, 2015 Share Posted May 13, 2015 What they most certainly should do is to phase out mortgage tax relief for BTL, which has skewed the market so much against young first time buyers in particular. But since this is basic common sense I can't see any of them doing it. Quote Link to comment Share on other sites More sharing options...
Killer Bunny Posted May 13, 2015 Share Posted May 13, 2015 No they sjould not. BTL is a business. Thus costs are charged against profit for tax calculation. To alter that would be intervention of the scariest kind? What would be next in that interventionist World? #Venezuela What they SHOULD do is take away all props and when BTLers go bust, let them. Quote Link to comment Share on other sites More sharing options...
Meerkat Posted May 13, 2015 Share Posted May 13, 2015 http://www.bbc.co.uk/news/magazine-32065625 It'll be political suicide, especially for the Tories... Politicians can't choose market outcome, eventually.. they can meddle and intervene and make the ultimate reset ever more painful. But if you insist they can't let it happen and if they were to resist till the very end, then the ultimate state is a total fascist organisation of the economy where the politburo decides who can get what and how much as they tackle ever more unintended consequences of their previous decrees. Many elements of this are already present, i.e. the UK is well under way towards this, let's hope "unintended", outcome. In any case, the more they try to decree real estate market pxs trend, the more ridiculous and immoral it looks as direct and indirect costs are borne by ever bigger number of market participants to support vested interests of fewer and fewer entities. As for the fecklessness and absurdity of all this show, this site is full of various evidence and anecdotes. Quote Link to comment Share on other sites More sharing options...
Killer Bunny Posted May 13, 2015 Share Posted May 13, 2015 Altering taxes for BTLers is exactly the opposite of common sense. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted May 13, 2015 Share Posted May 13, 2015 No they sjould not. BTL is a business. Thus costs are charged against profit for tax calculation. To alter that would be intervention of the scariest kind? What would be next in that interventionist World? #Venezuela What they SHOULD do is take away all props and when BTLers go bust, let them. You would think its a business, wouldnt you. But there is a Case, currently in appeal about the rule of when a BTL is a business, and when its not...there is a grey area, leading to some BTL having a protected mortgage and others not. So some get the best of both Worlds. Tax releif and a duty of care to the borrower. Quote Link to comment Share on other sites More sharing options...
Meerkat Posted May 13, 2015 Share Posted May 13, 2015 But since this is basic common sense I can't see any of them doing it. With all due respect, this is not common sense as Killer Bunny pointed out, too. This would be further meddling with some symptoms of the disease ignoring its true cause. And setting quite a bad precedent. Actually, when you think about it, this scary idea - what popular support it could garner from pi55ed off people whose only selfish care is getting a cheaper house especially if the supposed archenemy in the form of a BTLer would get shafted on the surface .. it would be something the establishment may as well try so as to set the road towards ever more regulation of any business aspect as well as continue to divide and rule... and regulate. Quote Link to comment Share on other sites More sharing options...
Meerkat Posted May 13, 2015 Share Posted May 13, 2015 Altering taxes for BTLers is exactly the opposite of common sense. +1 Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted May 13, 2015 Share Posted May 13, 2015 I wholeheartedly agree with everything that Killer Bunny has said on this thread. Quote Link to comment Share on other sites More sharing options...
olde guto Posted May 13, 2015 Share Posted May 13, 2015 Of course they could politicians often vow to do many things. However, only a left of centre party would risk it, it would be suicide for the right of centre. As to BTL being a business, if it is then BTL mortgages must be banned and all BTL LL have to go out and get a business loan with a business plan like someone setting up a real business would! Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted May 13, 2015 Share Posted May 13, 2015 Of course they could politicians often vow to do many things. However, only a left of centre party would risk it, it would be suicide for the right of centre. As to BTL being a business, if it is then BTL mortgages must be banned and all BTL LL have to go out and get a business loan with a business plan like someone setting up a real business would! Is there now a law that says you must submit a business plan before getting a business loan? Quote Link to comment Share on other sites More sharing options...
olde guto Posted May 13, 2015 Share Posted May 13, 2015 Is there now a law that says you must submit a business plan before getting a business loan? Well the few people I know have actually started businesses have been asked for a BP before they'd be given a loan. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted May 13, 2015 Share Posted May 13, 2015 Is there now a law that says you must submit a business plan before getting a business loan? Except, much BTL is not a business, its an accidental BTL...see my post above. Quote Link to comment Share on other sites More sharing options...
Fully Detached Posted May 13, 2015 Share Posted May 13, 2015 Except, much BTL is not a business, its an accidental BTL...see my post above. I think only a fraction of those who consider themselves accidental BTL are actually "accidental". I was talking to a woman recently who was adamant that she was an accidental BTL, as if it excused her from any of the responsibilities she actually has. When I asked the circumstances, she replied that she and her partner both owned mortgaged flats when they got together, and eventually sold his to raise a deposit for a mortgage for a house. When the time came, they "decided to rent her flat out instead of selling it". There is absolutely nothing accidental about that, or anyone else who made a conscious decision to rent out rather than sell, as long as selling was actually an option, which I believe it is in the vast majority of cases excepting negative equity. They should all be treated as professional landlords. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted May 13, 2015 Share Posted May 13, 2015 In addition, a normal business running a resale business, would receive a trade discount, in return for selling on the goods/service, using his own resources. The BTL competes in the exact same purchasing arena, he received no discount normally, the criteria for the loans are based on gross earnings, and are before the fact of the purchase. he is not providing housing at retail, for that is the price he paid. He is in fact selling on the service at ABOVE retail, as the same person wishing to buy the house for non business purposes has to have his income assessed NET of Tax and a whole load of other costs to calculate affordability. The BTL does not do any of this. There are also advantages with capital gains relief which I read about but am unsure of. Quote Link to comment Share on other sites More sharing options...
BorrowToLeech Posted May 13, 2015 Share Posted May 13, 2015 No. And they should not. They should stop intervening. #banHTB #letmktsetrates If the government were to stop intervening, then they would no longer be restricting freedom of movement and they would no longer be preventing people from building on any empty spaces they came across. Without government intervention, there would be no land market at all and no land ownership. Altering taxes for BTLers is exactly the opposite of common sense. Expecting people to pay their way is the opposite of common sense? Charging people who benefit from the government's intervention for the service they have been provided is entirely rational. Quote Link to comment Share on other sites More sharing options...
BorrowToLeech Posted May 13, 2015 Share Posted May 13, 2015 With all due respect, this is not common sense as Killer Bunny pointed out, too. This would be further meddling with some symptoms of the disease ignoring its true cause. And setting quite a bad precedent. Actually, when you think about it, this scary idea - what popular support it could garner from pi55ed off people whose only selfish care is getting a cheaper house especially if the supposed archenemy in the form of a BTLer would get shafted on the surface .. it would be something the establishment may as well try so as to set the road towards ever more regulation of any business aspect as well as continue to divide and rule... and regulate. 1.There is nothing remotely selfish about wanting a cheaper house. Everyone benefits when goods and services are more widely, and more easily available, that is the entire point of a capitalist economy. In a rational economy no-one loses from cheaper housing. We have intentionally created a system of rationing and enforced landlord dependency, to benefit a few very greedy people, who do not want to change the status quo. Now that is selfish. 2. Landlording only exists because of regulation, it is an entirely state dependent activity. The only question is how it should be regulated. BTL is a businesses the way that unemployment benefit is a profession. Quote Link to comment Share on other sites More sharing options...
Meerkat Posted May 13, 2015 Share Posted May 13, 2015 (edited) 1.There is nothing remotely selfish about wanting a cheaper house. Everyone benefits when goods and services are more widely, and more easily available, that is the entire point of a capitalist economy. In a rational economy no-one loses from cheaper housing. We have intentionally created a system of rationing and enforced landlord dependency, to benefit a few very greedy people, who do not want to change the status quo. Now that is selfish. 2. Landlording only exists because of regulation, it is an entirely state dependent activity. The only question is how it should be regulated. BTL is a businesses the way that unemployment benefit is a profession. By the only selfish care I meant exactly that - "only". Disregarding anything else, at any cost; from the league of "two wrongs don't make it right". Re BTL - take away any artificial props and regulations for BTLers. I don't quite understand how BTL is a state dependent activity as such. It wouldn't exist otherwise? Of course, it would, just would be much less widespread for the obvious reason. Edit: to me "selfish" is not a derogatory term, quite the opposite. Edited May 13, 2015 by Meerkat Quote Link to comment Share on other sites More sharing options...
Guest_northshore_* Posted May 13, 2015 Share Posted May 13, 2015 The 'business' of people farming, stemming from state-originated and institutionalised rent-seeking via skewed enforcement of land rights and benefits. Yeah that's super free market stuff. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted May 13, 2015 Share Posted May 13, 2015 By the only selfish care I meant exactly that - "only". Disregarding anything else, at any cost; from the league of "two wrongs don't make it right". Re BTL - take away any artificial props and regulations for BTLers. I don't quite understand how BTL is a state dependent activity as such. It wouldn't exist otherwise? Of course, it would, just would be much less widespread for the obvious reason. there are two types of BTL BUY to let....a case where an entity holds a property which it owns, then rents it out. The risk to the BTL in this case is loss of capital, voids, maintenance and damage to his capital asset. He can charge a rent that can minimise voids, interest rates can rise and fall. Borrow to let...a case where an entity holds a property dependant on a loan paid for by a tenant. The risk to this BTL is the loss of equity, voids, maintenance and damage to his capital asset. He has to charge a rent that covers voids, repairs, maintenance and damage. This rent is necessarily higher than a type 1 BTL who isnt having to make monthly payments based on a small arbitrage. The second one gets the tax releif on his borrowings....the first doesnt get opportunity costs recovered. thus, the borrowed version is taxed favourably over an outright owner, yet both are competing for the same clients. Quote Link to comment Share on other sites More sharing options...
iamnumerate Posted May 13, 2015 Share Posted May 13, 2015 I am a home owner but I would like prices to fall so a) I can move up the ladder I am not a psycho who enjoys seeing others suffer Although I would worry about those hit with negative equity, if I were a politician I would worry that people like that would vote against me for ever. Quote Link to comment Share on other sites More sharing options...
Meerkat Posted May 13, 2015 Share Posted May 13, 2015 there are two types of BTL BUY to let....a case where an entity holds a property which it owns, then rents it out. The risk to the BTL in this case is loss of capital, voids, maintenance and damage to his capital asset. He can charge a rent that can minimise voids, interest rates can rise and fall. Borrow to let...a case where an entity holds a property dependant on a loan paid for by a tenant. The risk to this BTL is the loss of equity, voids, maintenance and damage to his capital asset. He has to charge a rent that covers voids, repairs, maintenance and damage. This rent is necessarily higher than a type 1 BTL who isnt having to make monthly payments based on a small arbitrage. The second one gets the tax releif on his borrowings....the first doesnt get opportunity costs recovered. thus, the borrowed version is taxed favourably over an outright owner, yet both are competing for the same clients. And is it not here where the true elephant is hidden - the cost of borrowing? Also, is there no financial risk borne by someone with mighty leverage? Quote Link to comment Share on other sites More sharing options...
Si1 Posted May 13, 2015 Share Posted May 13, 2015 Agree with killer bunny EXCEPT where local politics, planning regulations and NIMBYism overrides sensible market led construction in areas that need it the most. In this regard we need govt led public building programme where there is no market to speak of due to short sighted local political interference Quote Link to comment Share on other sites More sharing options...
pig Posted May 13, 2015 Share Posted May 13, 2015 The idea of non-intervention by the state is laughable - especially at this point. At best it's all a big charade. Why is everybody pledging to build houses, why are people demanding we build houses ? Quote Link to comment Share on other sites More sharing options...
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