Btl Scum Regrouping And On The Offensive. -- Merged

[Ah-so]

Spot on, Neverwhere.

They have wasted their time on these arguments when they could be selling and getting out while the going was good. Instead they have been arguing with the online wing of the FPC.

They really need to consider their next steps, after the legal case side show had died down.

Before long, the lenders will start announcing how their lending criteria and underwriting criteria will change as a result and this will affect remortgaging as much as new purchases. They will either do this voluntarily or the regulator will crack the whip.

This may make getting new mortgages impossible, leaving them on the SVRs or facing demands for the reduction of LTV. Once interest rates rise, they will be fcuked.

[The Knimbies who say No]

Seems to be the continued conlfation of 'landlords' and 'But to Let' amongst 118ers. Clause 24 is specifically not about 'landlords', it is about Buy to Let.

I have a seriously big problem with people borrowing vast sums on an interest-only basis, and using the lax regulatory and taxation landscape, to deny others the opportunity of home ownership under the entirely bogus guise of service provision, and in a completely irresponsible manner which often leaves them so little flexibility they have no means to meet cast iron obligations on taxation (ie CGT) and repayment of borrowings.

We can talk about people with no leverage renting properties out, but for the time being the largest problem is as a result of debt junkies borrowing themselves to the point of ruination and then expecting the taxpayer to provide the taxation and regulatory landscape to fund the lifestyle they feel entitled to. They are a very easy target, politically. That in itself pretty much guarantees you'll end up on the wrong end of legislation/taxation eventually. They have been given plenty of advance warning of what is coming down the tracks regarding taxation for new entrants and for existing participants, there is a lot more that could and should be done (removal of mortgage interest tax relief entirely).

Edited February 6, 2016 by The Knimbies who say No

[spyguy]

Seems to be the continued conlfation of 'landlords' and 'But to Let' amongst 118ers. Clause 24 is specifically not about 'landlords', it is about Buy to Let.

I have a seriously big problem with people borrowing vast sums on an interest-only basis, and using the lax regulatory and taxation landscape, to deny others the opportunity of home ownership under the entirely bogus guise of service provision, and in a completely irresponsible manner which often leaves them so little flexibility they have no means to meet cast iron obligations on taxation (ie CGT) and repayment of borrowings.

We can talk about people with no leverage renting properties out, but for the time being the largest problem is as a result of debt junkies borrowing themselves to the point of ruination and then expecting the taxpayer to provide the taxation and regulatory landscape to fund the lifestyle they feel entitled to. They are a very easy target, politically. That in itself pretty much guarantees you'll end up on the wrong end of legislation/taxation eventually. They have been given plenty of advance warning of what is coming down the tracks regarding taxation for new entrants and for existing participants, there is a lot more that could and should be done (removal of mortgage interest tax relief entirely).

I have problems as, as a tax payer, Im on the hook when it blows it - B+B leftover mortgage is junk.

Leverage IO-only BTL is toxic junk that mainstream banks should not be in.

The risk is too large.

[Si1]

So the definition of an expert is not someone professionally couched in finance economics and/or business law, but instead a leveraged landlord?

[Bland Unsight]

I don't hate all landlords, there I have said it, I don't hate all landlords.

I don't hate landlords either.

And I definitely don't hate the PovertyLater clowns. That would be like hating a lactose-intolerant puppy because after you fed it on cheese and milkshake and locked it in a room you returned to find it had fouled the carpet. They're just mugs with an insane faith in property and access to cheap credit. What happened next was inevitable. (I would of course ensure that the puppy was kept away from cheese in the future and contained in a less well appointed part of the house until its bowels had settled.)

I need them to fail financially, and I think they will, but hatred doesn't come into it. It's a market. There's not enough property to satisfy the effective demand for the economic control of property. We can't all get what we want.

I do sometimes find them absolutely hilarious, when I think for example about Wing Commander Cooper taking a break from handing out tiny cans of diet cola to hook up with Cherie Blair to have Clause 24 struck off statue I wonder how things got this mad, and then generally I chuckle.

[Bear Hug]

It has been a while since I went to 218 for a little snigger and titter.

But I came across a thread about not paying the rent and C21.

A lot of these landlords really do look upon their tenants as vermin, it does not ever cross their mind that sky high rents and their forever ambitions on squeezing more and more out of them might also be a contributing factor.

Scumbags deserve everything they get.

I used to feel sorry for BTL acquaintances when they tell stories about particularly bad tenants not paying rent and refusing to move out. Now I try not to smile.

[Neverwhere]

Spot on, Neverwhere.

They have wasted their time on these arguments when they could be selling and getting out while the going was good. Instead they have been arguing with the online wing of the FPC.

They really need to consider their next steps, after the legal case side show had died down.

Before long, the lenders will start announcing how their lending criteria and underwriting criteria will change as a result and this will affect remortgaging as much as new purchases. They will either do this voluntarily or the regulator will crack the whip.

This may make getting new mortgages impossible, leaving them on the SVRs or facing demands for the reduction of LTV. Once interest rates rise, they will be fcuked.

This should be the real concern for them, if they were at all open to looking at the situation rationally. Whatever happens, until both the existing stock and the expansion of high loan-to-value, low margin, interest-only, buy-to-let is brought under control the FPC's financial stability concerns will remain. Additionally, until the exact same wages can raise a larger mortgage amount to bid directly on a home to live in than the exact same wages can raise when co-opted by a BTLer as rent then younger generations will continue to be priced out of home-ownership with all of the negative social, fiscal and economic consequences this implies. Hence policy measures will keep on targeting BTL until it is brought under control. Trying to contest specific policy measures as if they exist in some kind of pristine isolation is therefore like playing a doomed game of whack-a-mole: it does nothing to alleviate the underlying systemic problems with the BTL sector which at best will simply be addressed by other, potentially even less desirable, means.

[Neverwhere]

Seems to be the continued conlfation of 'landlords' and 'But to Let' amongst 118ers. Clause 24 is specifically not about 'landlords', it is about Buy to Let.

I have a seriously big problem with people borrowing vast sums on an interest-only basis, and using the lax regulatory and taxation landscape, to deny others the opportunity of home ownership under the entirely bogus guise of service provision, and in a completely irresponsible manner which often leaves them so little flexibility they have no means to meet cast iron obligations on taxation (ie CGT) and repayment of borrowings.

We can talk about people with no leverage renting properties out, but for the time being the largest problem is as a result of debt junkies borrowing themselves to the point of ruination and then expecting the taxpayer to provide the taxation and regulatory landscape to fund the lifestyle they feel entitled to. They are a very easy target, politically. That in itself pretty much guarantees you'll end up on the wrong end of legislation/taxation eventually. They have been given plenty of advance warning of what is coming down the tracks regarding taxation for new entrants and for existing participants, there is a lot more that could and should be done (removal of mortgage interest tax relief entirely).

I don't hate landlords either.

And I definitely don't hate the PovertyLater clowns. That would be like hating a lactose-intolerant puppy because after you fed it on cheese and milkshake and locked it in a room you returned to find it had fouled the carpet. They're just mugs with an insane faith in property and access to cheap credit. What happened next was inevitable. (I would of course ensure that the puppy was kept away from cheese in the future and contained in a less well appointed part of the house until its bowels had settled.)

I need them to fail financially, and I think they will, but hatred doesn't come into it. It's a market. There's not enough property to satisfy the effective demand for the economic control of property. We can't all get what we want.

I do sometimes find them absolutely hilarious, when I think for example about Wing Commander Cooper taking a break from handing out tiny cans of diet cola to hook up with Cherie Blair to have Clause 24 struck off statue I wonder how things got this mad, and then generally I chuckle.

+ 1 to both.

It seems to me that those arguing for a penalty tax against all landlords, regardless of how responsibly or irresponsibly they behave in regards to gearing, rather than reducing a tax break that is only available to leveraged landlords, have a lower regard for landlords in general than I do personally. BTLers are all landlords but not all landlords are BTLers. I don't hate either group and on an individual level I couldn't care whether they make off with millions or lose the shirts on their backs. They simply don't matter to me either way. What does concern me is the prospect of Britain being overly exposed to another financial crisis and the right of younger generations to have as much quality of life, and as much access to homes of their own, as older generations enjoyed. Good to see that they're acknowledging that their current, excessively favourable, tax treatment amounts to State Aid though.

[Pop321]

I am feeling the love at the moment...glad you don't all hate me as an unleveraged LL. I have said before once the leveraged 118'ers have been bankrupt and only us unleveraged are left then we can get back to some decent honest banter.

I think 118 should stick with the discrimination arguement because I have a sneaky feeling the Bank of England is going to 'discriminate' in the future and put interest rates up. That only affects those with mortgages which is unfair - maybe savers, unleveraged landlords and elderly should contribute to mortgages of the BTL'er if rates go up....you know, to avoid discrimination.

Never mind.....the 'entitlement gang' won't get it. They are too clever to fail. I know them too well.....and embarrassed to admit they were my bread and butter in previous downturns. That's why I don't hate them ?

My advice, sell now whilst 'the many' shuffle deck chairs.

[Frugal Git]

I am feeling the love at the moment...glad you don't all hate me as an unleveraged LL. I have said before once the leveraged 118'ers have been bankrupt and only us unleveraged are left then we can get back to some decent honest banter.

Although I've some issues with (unleveraged) landlords in general in today's world, those issues are mainly a result of them operating in a country with such restrictive planning laws and a disfunctional economy centered around the south east. That isn't their individual fault, but a result of many decades of nimbyism and stupidity by central planners.

When it comes to the modern leveraged landlord, I have to say I would have a grudging respect for any one of them who decided to deleverage now and get out with the spoils of trading the housing market as it is. I wouldn't have done it, because I don't like the idea and frankly even if i had put my ethics to one side, the hassle and the risk would have put me off.

But if they don't face reality, and they decide to hang on till the creditors come for the keys to their primary residence, I cannot find any sympathy. I've lost thousands trading shares, hanging on for grim death in the face of evidence that, at bare minimum, I got my timing wrong or worse, I didn't do my due diligence and took a blind punt. No one should cry for me. I was an idiot who ignored the signs. Except the sign I ignored might have been 'buried' in a balance sheet, or camouflaged in director sales. No excuses, I still should have spotted them, but hey.

The signs for these people are 40 year old professionals earning more than their landlord living in shared houses, prices at 15x local average wages, rents that are propped up by housing benefit that is unaffordable to the tax payer, unregulated interest only mortgages completely out of lock step with owner occupier mmr lending, growing anger with the housing situation in general and most tellingly, the government changing tack and taxing these f*ckers evermore. And most of this is in every newspaper and every interaction in their day to day lives.

If that isn't a sell signal, then I don't know what is.

Edited February 6, 2016 by Frugal Git

[Pop321]

Although I've some issues with (unleveraged) landlords in general in today's world, those issues are mainly a result of them operating in a country with such restrictive planning laws and a disfunctional economy centered around the south east. That isn't their individual fault, but a result of many decades of nimbyism and stupidity by central planners.

When it comes to the modern leveraged landlord, I have to say I would have a grudging respect for any one of them who decided to deleverage now and get out with the spoils of trading the housing market as it is. I wouldn't have done it, because I don't like the idea and frankly even if i had put my ethics to one side, the hassle and the risk would have put me off.

But if they don't face reality, and they decide to hang on till the creditors come for the keys to their primary residence, I cannot find any sympathy. I've lost thousands trading shares, hanging on for grim death in the face of evidence that, at bare minimum, I got my timing wrong or worse, I didn't do my due diligence and took a blind punt. No one should cry for me. I was an idiot who ignored the signs. Except the sign I ignored might have been 'buried' in a balance sheet, or camouflaged in director sales. No excuses, I still should have spotted them, but hey.

The signs for these people are 40 year old professionals earning more than their landlord living in shared houses, prices at 15x local average wages, rents that are propped up by housing benefit that is unaffordable to the tax payer, unregulated interest only mortgages completely out of lock step with owner occupier mmr lending, growing anger with the housing situation in general and most tellingly, the government changing tack and taxing these f*ckers evermore. And most of this is in every newspaper and every interaction in their day to day lives.

If that isn't a sell signal, then I don't know what is.

Good shout. I am in the camp that the lack of ability for some to exit and sell is an inditement of the ridiculous and ill considered strategy they have taken. Leveraging on one property for a year is one thing....but the numbers are mind boggling.

When this started out the 118'ers were explaining number like 'I earn £600k rent and current pay £400k mortgage and £150k costs - so make £50k profit'. Well that was me out completely as I realised these guys were borrowing millions...no empathy and certainly no respect.

As you say if someone loses money on shares no one sheds a tear. And hopefully it will be the same as prices adjust and are based on earnings and not rental returns.

They definitely will not see this coming. At the moment they see £700 rent, £200 mortgage = can't sell because making money. They have lost sight that £120k debt is real and £200 pcm can quickly be £650 pcm mortgage and the deck of cards collapses.

Mark Alexander's biggest claim was his aim was to be £1m in debt and his relatives all thought him mad. I understand the model more than most, but if you don't respect the debt.....like someone with a pet lion....it will eventually eat you. And the majority of normal people will look on....slightly unsurprised that the lion ate the owner. Only those who are too close appear surprised with stories of how out of character this was for Leo. ?

Re the unleveraged. My view is many are very unsavoury and unpleasant. Others are good. But unleveraged as I am, I can see the arguement that holding a property now is less of an investment and more of a political time bomb as generation rent fall behind. Therefore happy to sell when each property becomes naturally empty.

Those who hold property as a status symbol will not sell and if they are leveraged should become nicely unstuck around 2019.

[Ah-so]

Good post, Phil321.

Massive leverage is all about getting rich quick(er). It is the only reason people use leverage.

In the comparison you draw to shares,of I buy shares in a 3:1 leverage ratio, how much sympathy would I expect if the whole thing went tits up and ruined me?

[Bland Unsight]

Good post, Phil321.

Massive leverage is all about getting rich quick(er). It is the only reason people use leverage.

In the comparison you draw to shares,of I buy shares in a 3:1 leverage ratio, how much sympathy would I expect if the whole thing went tits up and ruined me?

This is the problem with the normalisation in UK society of buy-to-let and the failure of any high profile politician to offer political leadership and say "This is stupid and wrong". When you end up in a situation where lots of mug investors think that the only form of practical saving and pension planning is gambling on houses with lots of borrowed money, then unlike Elvis, reason and good sense have not only left the building, but also hitched a ride into space and nuked the building from orbit.

That said, both Osborne's Treasury and Carney's Bank are now offering enormous grounds for optimism and a decent crash should undo most of the idiocy quick smart. Still twenty years of insanity has come with massive costs for many households.

Edited February 7, 2016 by Bland Unsight

[Neverwhere]

phil_stewardson 02-02-2016,08:55 AM

RE: Phil Martin charged on 9 counts of fraud

John,

I am really surprised to hear you say that, you took a lot of stick a while back and i thought the PT community were really supportive to you.

Unless you have something to sell, or ideally scam Facebook really isnt good in my opinion. I dont want to be posting serious business where my 12yr old nephew posts about skateboarding. I have been told in no uncertain terms by a snr property banker that they look at FB Property groups and numerous people have had their cards marked for posts they have made.

I rarely get chance to post here now sadly, but i pop by every day to catch up and for me every visit to PT is productive, I may not learn something on every visit but i always go away mulling over something i have read and it makes me question and re-evaluate things that we do.

My emphasis.

[Neverwhere]

David Price 03/02/2016 at 17:11

Reply to the comment left by “Mandy Thomson” at “03/02/2016 – 14:49“:

Mandy I am so glad that you have adopted the correct description. I look forward to the advice from House Price Crash and Generation Rent, particularly how they are going to house the tenants made homeless by rent increases, snivel.

It's pretty simple David: tenants are not going to be made homeless by rent increases. There may obviously be an increase in those moving to avoid them but same old, same old given the general lack of security of tenure in the private rented sector.

There is not a magic supply of currently unhoused well off renters willing to step in and rent your properties should you price out the tenants you already have. If you manage to attract better off tenants then you will have attracted them away from another landlord, worsening that landlord's financial position and forcing them to accept less well off tenants.

Neither is there a magic supply of currently unhoused well off first time buyers willing to step in and buy your properties should you decide to sell. If you manage to attract better off first time buyers then you will have attracted them away from renting from another landlord, worsening that landlord's financial position and forcing them to accept less well off tenants.

By and large any new tenants you find will be drawn from the current pool of renters, and any first time buyers you find will be drawn from the current pool of renters.

Natural turnover of people moving in and out of rented accomodation will remain unaffected and so will have no greater impact than it does now, and will not compensate for the precarious financial positions that some BTL landlords have gotten themselves into.

If BTL landlords try to price themselves out of the market by assuming a ready supply of rich renters will magically appear, ex nihilo de novo, to save them then will simply wind-up with voids and arrears or force voids and arrears on others. The only people who seriously risk being made homeless by this foolhardy and foolish approach are BTL landlords themselves.

As the Judicial Review campaign group have openly acknowledged the current, overly favourable, tax breaks afforded to BTL landlords amount to State Aid. Reducing them isn't a full return to capitalism but it's a start. It's time for BTL landlords to learn how markets actually work.

[spyguy]

Good post, Phil321.

Massive leverage is all about getting rich quick(er). It is the only reason people use leverage.

In the comparison you draw to shares,of I buy shares in a 3:1 leverage ratio, how much sympathy would I expect if the whole thing went tits up and ruined me?

3:1 !!! I wish!!!

Most of the 4-8 house BTLers Ive chatted to have a leverage of around 15+:1.

Thats why its so fcking insane.

[sleepwello'nights]

Good shout. I am in the camp that the lack of ability for some to exit and sell is an inditement of the ridiculous and ill considered strategy they have taken. Leveraging on one property for a year is one thing....but the numbers are mind boggling.

There are none so righteous as the newly converted. Pray tell your Damascene moment.

[Sawitcoming]

Oh dear. Just had a chat with the Landlord from two doors up and he is a textbook case. As I was talking to him I could see he was a nice enough chap (sort of just at retirement age I think) and so I started to engage in some conversation about the whole BTL environment.

Bought the property mid 2014, I remember the queues of people lining up to buy this place at the top of the market. He bought it as an investment cos he had a bit of spare money and couldn't get a return anywhere else. Textbook!

Interest only BTL mortgage. Has a nice chunk of equity in his home that is paid off that the banks can come and take if it all goes wrong. Textbook.

Not worried about "the tax thing" (Clause 24) cos he's in it for the long game. He's lived through two crashes and it always comes right in the end. Textbook.

Not worried about a crash, its all about getting out at the right time. But what is the right time? I asked.

His first tenants have just done a runner owing him money.

He is charging close to 2k for the place which is more expensive than my rental and it looks even worse than mine. I said that seems expensive as mine is £1840 and I think thats expensive and the one next door is £1600. The agents told him to rent it at that price. Lets watch and see how long its empty. possibly not long as he may get some people looking just for a place to get in until they find something better then again maybe not. We shall see.

Openly admits he knows nothing about residential property, although his career was in commercial property. I explained Basel III in detail and again not phased because he is in it for the long term.

Kids mid 20s living at home which he is going to have to BOMAD to allow them to get a place of their own. He gets that this is not right and actually that it negates the benefit of his mad gains as he is going to have to donate to them.

Its going to take a lot to undo the belief in BTL with your mom and pop investor. These people are so confident of the safety of this investment. There is going to have to be widespread pain felt before it hits home.

[Pop321]

There are none so righteous as the newly converted. Pray tell your Damascene moment.

Wrote a long reply detailing my own position and that my damascene moment was about 30 years ago when I heard about someone who borrowed and lost. But actually just one quick sentence below covers the moment when 118 gave me a real light bulb moment.

Ros references the holocaust.

[Neverwhere]

Ros references the holocaust.

AFAIK not one poster challenged those abhorrent comparisons and the poster who made them is still very obviously held in high regard. They make themselves complicit with their silence.

[Bland Unsight]

There are none so righteous as the newly converted. Pray tell your Damascene moment.

Good point, sleeps.

Can you remind me, why did you sell your BTLs?

What changed? Why did you go from Saul of Tarsus, BTL bull, to Paul the Apostle?

Edited February 7, 2016 by Bland Unsight

[sleepwello'nights]

Wrote a long reply detailing my own position and that my damascene moment was about 30 years ago when I heard about someone who borrowed and lost. But actually just one quick sentence below covers the moment when 118 gave me a real light bulb moment.

Ros references the holocaust.

So am I right in summarising that 30 years ago you realised that residential property letting was morally or ethically wrong?

Your initial posts on this site state that you are one of the landlords that treat your tenants well and subsequent posts state that you are winding down your property portfolio as tenants move on.

Why then have you continued with an activity that you consider morally and ethically wrong for 30 years?

[Bland Unsight]

So am I right in summarising that 30 years ago you realised that residential property letting was morally or ethically wrong?

Do you even read other people's posts, sleeps? The reference to thirty years Phil321 made regarded the risks of heavily leveraged investment, a course many of the madder PoveryLater cretins have pursued to an insane extent whilst apparently oblivious to the risks.

[Neverwhere]

Leverage, leverage. Why be so intent on pretending that leverage is not the issue at hand?

[Pop321]

Do you even read other people's posts, sleeps? The reference to thirty years Phil321 made regarded the risks of heavily leveraged investment, a course many of the madder PoveryLater cretins have pursued to an insane extent whilst apparently oblivious to the risks.

You are right. 30 years ago I knew the danger of debt through my role in my job. My observation was middle earners were always over stretching themselves for material wants.

Being a LL hadn't even entered my fuzzy young little head. I just knew debt was bad....even 'good' debt.

To the challenge

Being a LL is something I did to stagger sales to distribute taxable earnings. I have always been selling....holding property is not something I morally defend. Said before only nice to tenants because I am...not because that was the big plan.

118's pretend to be the defender of the homeless, fighters of justice and absolutely entitled to every perk. They have convinced themselves only benefit society and ignore and deny any damage caused. I am grateful for what I have and WHEN the government move the goalposts I might moan for the day because I am human and then get on with it. I expect changes and the tide has turned and I endorse it.

I likened myself to Darth Vader on an old post....everyone celebrates at the end of the trilogy because he has turned whilst I personally can't help thinking.....but didn't he like kill a planet and lots of people. I suggest perhaps whilst he ended up being good overall he didn't live the most defendable life.?