Btl Scum Regrouping And On The Offensive. -- Merged

[Bland Unsight]

Just looking at the post from the Portsmouth & District Private Landlords Association, almost a year down the line, it's clear the author nailed it.

Our advice to all of our members is to ensure you have sufficient liquidity to endure periods of difficulty, that you should only leverage if your liquidity position allows it (and you should work on the basis that the long term base rate is 5%, so anything below that is a short term bonus) and your business model should be flexible enough to be able to accommodate changes in the regulatory and taxation situation pertaining to landlords.

Whilst there are probably some very competent landlords on Property118, it does appear to have more than its fair share of ‘get rich quick’ merchants who started with very little and have leveraged and remortgaged to get to a position where they have little equity in their portfolio after taking account of capital gains tax liabilities and are operating on net yields which are unsustainable in the longer (5% base rate) term. It is true that these changes may well force many of these people out of business but is that a bad thing? If you have so little liquidity, how can you afford to update and refurbish your properties and raise the standard of lettings, how can you react quickly to the inevitable broken boiler, leaky roof, broken gutter or faulty window and maintain your properties in an acceptable standard?

We'd add that allowing BTL landlords to claim finance costs as an expense has distorted the market and encouraged far too much debt in a society that can scarcely afford to service the debt it already has - so the budget changes were no surprise except for the fact that the 20% rate is still allowed (unique in Europe where the UK is the only country to allow finance charges to be claimed against tax), our expectation is that too will disappear later in this Parliament and that any lobbying by landlord groups will be too narrow to garner wider support and thus will be easily ignored. If one is to lobby effectively, one has to raise awareness of a wrong and gain wider agreement that it needs correcting – when the only ‘victims’ are those that are complaining and most think they can afford/deserve it, any amount of pleading will fall on deaf ears, so in our view, landlords should ‘save their powder’ for a cause which is unjust and does need to be rectified (like HHSRS or the lack of data protection for landlords in licensing schemes or the need for something better than LACORS), but that is just our view.

Can't you see, Shoeshine - the author was right.

[Venger]

Published on 12 Dec 2015

landlords... takes guts - one has to charge the rent that allows the mortgage to be repaid + service charges and any other expenses - can be quite unfair how landlords can be perceived as greedy when in fact they're just looking to pay the bills.

Yup; just buy a house and tenant to cover all your costs, leaving landlord with a paid off house - ka-ching.

Goes onto CGT. 'Horrific'. Solution seems to be refinancing and die.

[pig]

The title of this thread is BTL Scum Regrouping and on the offensive. The OP is a link to a post on PovertyLater. PovertyLater is the spiritual home of the highly-leveraged property investor.

The Patron Saint of BTL Tw@ts, in the

, draws a distinction between "property investors" and "professional landlords"

Up until the Treasury strarted trying to f**k them over, lots of these people didn't want to consider themselves to be landlords!

Admittedly, the usage of the term buy-to-let is somewhat elastic, but the suggestion that the issue here is with landlords is f**king stupid. Busta and pals saw themselves as pursing a highly-geared property investment strategy. They were investors. Many of them outsourced the work of being a landlord to a full-service managing agent and revelled in the income tax losses they could build up during their imagined 'accumulation phase'.

I'm not attacking landlords, I'm laughing at the misadventures of mug tw@ts pissing around with debt until their Debt to IQ ratio reaches about 20,000:1

As I recall, unless you were being sarcastic, until very recently you didn't even understand the connection between short ASTs and BTL lending T&Cs, so perhaps you could spare us your disdain, until such time as you've had a chance to read up on the detail?

Lol - I'm sure you can cope with my disdain, I'll do my best with yours !

Fair point with 'Landlord', I'll choose my words more carefully next time, but the broad point remains: they're just confusing 'antagonism' towards them with a straight gamble that didn't work out. I'd rather they wised up, not out of sympathy, rather a forlorn hope we'll end up with a more rational market - but they never will take responsibility.

Aldo it's not really an IQ thing, it's a 'clinging on to happy paradigm thing'. For that they'll exhibit way greater 'cleverness, and twist logic way more impressively than they ever did getting themselves into this mess in the first place. Human nature - you see this in all sorts of situations.

[Bland Unsight]

Aldo it's not really an IQ thing, it's a 'clinging on to happy paradigm thing'. For that they'll exhibit way greater 'cleverness, and twist logic way more impressively than they ever did getting themselves into this mess in the first place. Human nature - you see this in all sorts of situations.

Agree with that absolutely, just joking about the IQ thing, though it doesn't matter how smart you are, if you borrow millions of pounds to bet on the prices of crap houses, your Debt to IQ ratio is going to get out of hand.

[Pop321]

Just looking at the post from the Portsmouth & District Private Landlords Association, almost a year down the line, it's clear the author nailed it.

Can't you see, Shoeshine - the author was right.

That is a super find. To publicly rebuff requests from its members in such a manner I hope better illustrates the general consensus of many landlords, including some leveraged ones.

I have spoken to broadly 3 camps:

1) those who saw C24 coming and impacted or not totally understand and accept it. They see other things coming too. Some selling.?

2) the 118'er. Some secretly selling ?

3) those who have no clue what they are doing, no idea of their own impact on the market and are worried about the changes they are seeing. They are not sure of the personal impact but are definitely not buying anything again.

The only BTL'ers buying are those thinking about starting out with a view of owning 'just one'. It doesn't take much to dissuade them and the stamp duty probably stopped 60% already.

Direction of travel is looking good.

The 'pop' has started in London and will proportionately affect prices in the real world over the next 2-3 years. A family member sold their North London home near Cockfosters - modest 3 bed semi (their home for 25 years) for £600k in November. Not a property person, not a BTL'er or Landlord. They just thought the prices were stupid and the way they described it was someone was willing to pay £600k for their £300k home. On that basis they could leave work and return to beautiful Yorkshire. Even the prices here have some adjustment down....but buying at £180k ish, they are happy to take a hit up here. It's not an investment and interestingly they are currently renting until they find something that works for them.....rather than just jumping in.

Zoopla already estimates their old house at £560k........feeling it coming. 'Pop'.

Still at least 118'ers can keep those letters coming and their rants alive. They are tied to a train track and the train is coming....yet they are still moaning that the rope on their wrists is a bit tight.

Thanks for the ongoing research.

Edited May 18, 2016 by Phil321

[Bland Unsight]

This chap is not really managing to keep up with events. The '"it" is presumably Section 24.

NW Landlord says:

16/05/2016 at 09:28

It will have to be reversed at some point the numbers just don’t add up I thought it was a joke when I went through it with my accountant. The more finance you have the worse it is so for large corporates it will be even worse. It can’t be sustained long even medium term which makes me think it is a short term tax grab and a way of freeing up stock for all these FTB queuing up to buy our properties any sane person knows u cannot run a business where your tax bills are larger than your profits

Let me explain this to our pals across the way

• You believe that because you've already set up a daft 'business' the government is obligated to enable you to conduct your Hoskerian investi-biz on those terms indefinitely
• This belief is mistaken
• The tax is effectively a tax on leverage
• Your "business" will not have tax bills bigger than your net cash flows before tax if you reduce your leverage
• If your strategy means you can't reduce your leverage (because of a CGT liability you can't cover) you're a daft c**t caught in a trap you constructed yourself.
• The problem is that given the finance you're employing, your yields are too low to swallow the adjustment on taxation - you've been dancing in the dragon's jaws, and now the jaws are closing.
• These changes won't be reversed, you are one of a very small number of people who are very, very badly affected, but that is because you've been operating a mad strategy to a mad degree.
• You argument rests on the assumption that your Hoskerian investi-biz is not batshit mental, but actually it is batshit mental.

Edited May 18, 2016 by Ghost Bird

[giesahoose]

<p>

This chap is not really managing to keep up with events. The '"it" is presumably Section 24.

Let me explain this to our pals across the way

• You believe that because you've already set up a daft 'business' the government is obligate to enable you to conduct your Hoskerian investi-biz on those terms indefinitely
• This belief is mistaken
• The tax is effectively a tax on leverage
• Your "business" will not have tax bills bigger than your net cash flows before tax if you reduce your leverage
• If your strategy means you can't reduce your leverage (because of a CGT liability you can't cover) you're a daft c**t caught in a trap you constructed yourself.
• The problem is that given the finance you're employing, your yields are too low to swallow the adjustment on taxation - you've been dancing in the dragon's jaws, and now the jaws are closing.
• These changes won't be reversed, you are one of a very small number of people who are very, very badly affected, but that is because you've been operating a mad strategy to a mad degree.
• You argument rests on the assumption that your Hoskerian invest-biz is not batshit mental, but actually it is batshit mental.

Excellent post

[BorrowToLeech]

Its worse than that. I'm indifferent to landlords*, think they are in principle a useful part of housing provision (the flip-side is I've nothing against renting) and even sometimes look down a little on the spite aimed at them on this forum.

Landlords don't provide anything. The opposite of that.

...

*caveat: seems to me most are politically and economically illiterate.

Pot, kettle.

Edited May 18, 2016 by BuyToLeech

[Growlers2]

I've read this guys posts before, I think he's really astute:

http://www.ftadviser.com/2016/05/18/opinion/blogs/ftbs-will-benefit-if-buy-to-let-game-is-up-eoAWWbzFgqnOelC2S6xphP/article.html

In reference to the warnings of brokers recommending pay-rate mortgages to landlord clients (FT Adviser, 6 May), most buy-to-let investors have realised the “game is up”, and there is no value in leveraging their portfolios any more due to the government tax changes.

Therefore those landlords with buy-to-let mortgages will soon start to slowly offload their properties as remortgaging becomes more difficult and the loss of tax relief starts to bite.

This is very good news for first-time buyers as there should be a tsunami of buy-to-let properties coming onto the market in 2017/18 onwards for a number of years. If buy-to-let investors have not got the message by now, they are being very slow in realising that the longer they keep their properties, the greater will be their loss of equity.

We have not seen a major property freeze in London and the south-east since the late 1980s and early 1990s, so we are overdue a correction, particularly in these two areas.

May of these first-time buyers will become landlords using the rent-a-room relief to help with their mortgage costs, so rents will not spiral out of control. It is a virtuous circle and the prime minister and government must be congratulated on their bold move to help first-time buyers get onto the housing ladder.

Colin Cloy

Director

Pendulum Wealth Management, Horsham, West Sussex

Separately, check out this old exchange in the comments section (2011) between this chap and Dyslexic Landlord of property forum fame:

http://citywire.co.uk/money/buy-to-let-investing-the-outlook-for-2011/a458183

Colin CloyJan 06, 2011 at 17:33

The current housing market is obviously distorted in favour of BTL landlords as can be seen from the recently published BOE figures. Therefore I believe that the Government is going to have to utilise the levers that the Housing Minister mentioned last week. I believe the Housing Minister’s action on self build schemes and improving the availability of funds for FTBs is just the tip of the ice berg. The new collation Government obviously recognises that there is currently not a "level playing field" between FTBs and BTL landlords and it is obviously considering all its options. The growing daily evidence of the advantage that BTL landlords enjoy over FTBs means future action by the Government in curtailing the BTL market is I believe inevitable. This will force lenders to concentrate in assisting FTBs rather than BTL landlords.

Dislexic LandlordJan 06, 2011 at 17:58

Colin with the greatest Respect your talking rubbish

Any landlord worth there salt can tell you getting money from banks today is at best difficult

Ive just checked today there are 219 products for BTL before 2007 there was over 3000??

Only one lender is giveig 80% LTV

A few More 75% LTV

and the rest are about 60% LTV

The fees chargeable are very high as are valuations

To say we have the upper edge on FTB is totaly wrong

What I do find is that the press is driveing FTB away doom and gloom ,The only edge BTL Landlords have is we are willing to take a chance and buy for long term investment and of course Yeild

I can never compete against FTB they will always win if they really need a house or have the guts to buy one

Colin CloyJan 06, 2011 at 18:10

Dislexic Landlord I can only tell you why I feel the housing market is currently stuck (the PMs comment not mine) and what action I think Government will take. I would have thought it a good time for many landlords to reduce their property portfolios before the 2011 Finance Act.

Dislexic LandlordJan 06, 2011 at 18:25

colin please think about your last statement

landlords to reduce their property portfolios before the 2011 Finance Act.

If Landlords were to do this where do the Teanants Go??

Councils cant house them

Houseing assoacations cant house them

So I ask you where do they go

I was a landlords meeting and get this for a fig the city Council has less than 200 houses

and the city council has a waiteing list of 11000

BTL is the only part of the houseing market that is expeanding for rentals its a fact

BTL is now larger than Houseing accosations

Belive me Councils are working with BTL landlords

all I would say is the Goverment has to be very carefull with the rental sector

The fact of the matter is the goverment need Landlords

Going back to FTB we also need them too I like nothing better than a mix of rented and owners

Colin CloyJan 06, 2011 at 18:53

Dislexic Landlord once private landlords like you start puting property onto the market there will be an over supply of housing that tenants and a generation living at home with parents will at last be able to afford.

Some action needs to occur that will force landlords to sell their properties to tenants or FTBs. I believe that it will occur sooner rather than later. I am sorry if this is not good news for landlords but I think that action will be taken by the Government which may force your hand to sell.

Dislexic LandlordJan 06, 2011 at 19:13

Colin you assume that landlords will want to see and You may be right

I think you may be on the Tracks of the Higher Taxes on profits when you sell a house

I for one will never sell property and the reason I wont sell is it never makes sence and if the taxs do rise on the sale of second home more landlords wont sell either

I can only speak for myself I wont sell and never will i at present all my properties yeild of 9% and rents are riseing

If I were to sell the net fig after all costs would never give me the same return so whats the point in selling

I hope you can see my point im not very good at writeing but you know that by now

I want my assets to go to the next generation

Property will always make money in the long term

But you may be right about other Landlord they may sell which will bring prices down more so there may be a silver lineing in what you say

Colin CloyJan 07, 2011 at 12:02

Dislexic Landlord I believe the Chancellor will not just attack your capital gains on sale but your income through removing tax concessions on loan interest which are not available to any other sector of the housing market.

The "level playing field" is coming and the Goverment could possibly make changes to the Rent Act. Sorry to be the messenger of bad news.

Dislexic LandlordJan 07, 2011 at 13:58

Colin

If you are right I think you will find a lot of homeless Tenants

Ask your self the question what will happen to them

Its a Tory Govt look at the backers of that Goverment its folks like the Duke Of Westminster ect

And you know your wrong when you mention its only BTL who gain from Tax Relife what about Holiday Homes and Hotels and Bed and Breckfast

They all get tax relife on Bussiness Expences

This would If you are right not only BTL would suffer all existing home owners too house prices will fall and fall

But there again if that was to happen because of drops Large Landlords such as my self could clear up once again

If your buying Cheap priced property it could be even more worth while being a Landlord

We will have to waite and see but I do hope you are wrong

Landlords always win what ever the market you just have to revalueate and move on

But lets see it will be intresting

Colin CloyJan 07, 2011 at 15:40

Dislexic Landlord you are right in stating most house prices will have to fall significantly 20-30%. It will give an opportunity for some professional Landlords ie Grosvenor Estates that you mention to buy however it will deter the speculative non professional who think a BTL will make a suitable pension vehicle. Many of these landlords will loose much of the capital gains they have accured to date. FTBs however will be able to compete again as it will as it will shrink the size of the private landlord market and create a "level playing field". It will also help reduce much of the inflation we saw in the last decade up to the credit crunch when FTBs were vying with BTL landlords and pushing up prices.

As for the tenants there is not a problem they will be the ones buying the private landlords property as better deals will be encouraged by the Government. in the overal package they will probably announce. From all my discussions with landlords they seem to think there will be thousands of tenants on the street however I can reassure you that will not be an issue!

The government will also enjoy some windfall CGT and additional income tax much needed by the exchequer.

Dislexic LandlordJan 07, 2011 at 15:57

Hi Colin again I would like you to show me where you get your facts ?????

I think its wishfull thinking on your part unless you can prove otherwise

and you have just shot yourself in the foot

Large Landlords will expand as you have just admited and I for one will move forward and clean up

and dont forget a lot of folks cant buy for one reason and another we well always have landlords

If prices are to fall as Ive said we will all be affected and in a way a big drop in property prices would be a great thing

I stopped buying in 2005 until last year ive bought some great property since the crash and I want more

Im happy to chase this market down the lower the better for me because as I have said time and time I never sell

Can I ask if its not to personal what do you do for a liveing in thease hard times

Dislexic LandlordJan 07, 2011 at 16:04

Dear Colin are you the IFA from Global Life

http://www.globaluklife.com/

If so show your true colurs please

You have a vested intrest in seeing the down fall in Landlords

Im sure you would advise us all to come and see someone like yourself to invest our hard erned cash

A life insurance sales man

Dislexic LandlordJan 07, 2011 at 16:19

Tim

I have had dealings with Life Insurance sales men for years oh sorry IFA,s

and in general I find them east end boys in west end suits (NOT PERSONALY COLIN) but thats what I thik most IFA,s are

I thought Colin was some thing high up in the tresury and I was listening to what was said with great intrest

Turns out Its what HE THINKS

mind he may have children liveing at home which he wants to of load when thay buy a house

Colin CloyJan 07, 2011 at 16:27

Dislexic,

You are right I have spent the last 46 years in the Life Pensions and Investment industry.

However when was the last time you heard a Prime Minister talk about the housing market in the way the Prime Minister did earlier this week. It was probably Margaret Thatcher and I believe that one of David Camerons legacies could be to provide a "level playing field" in the housing market. He would be certainly remembered for it!

It will mean a lot of people including myself will loose 20-30% of the current equity in their properties but it will mean a generation of tenants and adults living at home with parents will be able to buy for the first time. It will stabilise the property market in the longer term once the initial shock goes through the system.

If I was in David Camerons shoes I would have no hesitation in implementing the policy as it is only my children's inheritance that is "going up in smoke" and Dislexic you are right again I will be able to get them out of the house a lot quicker!

Dislexic LandlordJan 07, 2011 at 16:36

Hi colin

Ive just been reading more about the work you do and by what I can see you help your Cliants Avoid paying taxes ???????

so you are guilty of what you say your against

You sell tax efficiiant ways of avoiding Taxs this is your

You Sell IHT Free Investments

http://www.rubii.co.uk/content/advisers/iht-free-investments/colin-cloy

Talk about the kettle calling the pan Black

Dislexic LandlordJan 07, 2011 at 16:52

Hi Colin

I see this is an old chestnut with you

http://www.mortgagesolutions.co.uk/mortgage-solutions/news/1933945/ifa-calls-abolition-landlord-benefits

Colin CloyJan 07, 2011 at 17:23

Dislexic it is nothing personal against you but as you say the kids will have to find some where to go!

Having been an employee virtually all my working life I do not have to capital to get them started on the housing ladder so it was either help sort out the housing market or the children will have to wait for an inheritance!

I have done all I can and I believe that the PM and Government Ministers are fully well aware of all the issues affecting the housing market. We can only wait to see what may occur during the lifetime of the Parliament.

Dislexic LandlordJan 07, 2011 at 17:38

Colin Im really sorry to here the problem you have and I do feel for you I have a son and im a Grandmother too

I work and live in the North East of England and I can tell you that FTB can get on the property ladder you can buy 2 bed flats in good areas up here for 60000

I dont know where you Children Live but it sounds as if your in the south where prices are totaly stuppid

Very High Prices help no body other that existing owners and un less there down sizing it is not helpfull

I have said I really want prices to drop and I think we have a way to go yet and hopefully this will help children to get on the Houseing Ladder

We need FTB and Landlords and I hope Mortgage lending gets better for FTB I dont think it will get a lot better for landlords 30% Deposits will be the norm for a long time to come

and if banks start lending to FTB at sensible leveles say 95% we can look forward to tham comeing into the market

The failings of the British houseing market has gone on for years and the blame in my opinion is the dear old banks lending to much

and this is the rea cause of hight inflation in houseing

Its been a great debate and I have enjoyed it as you can tell

Have a good weekend DL

Prescient!

[Bland Unsight]

I've read this guys posts before, I think he's really astute:

http://www.ftadviser.com/2016/05/18/opinion/blogs/ftbs-will-benefit-if-buy-to-let-game-is-up-eoAWWbzFgqnOelC2S6xphP/article.html

Seconded. Another Colin Cloy fan here.

[Bear Hug]

The tax relief boot in now on the other foot and the LLs do not like it. It was all fine and dandy when eg the FTB could afford to pay 1,000 as a mortgage but the LL could pay 1,100 ( to outbid the FTB) and get back 440 as tax relief and so only pay 660 and then charge the potential FTB 1,000 rent and so make 340 profit.

...

Sorry, this is probably a stupid question, but wasn't tax relief in respect of income on property only? I.e. tax on £1000 rental income is £400, and that's the amount the landlord can get as tax relief?

I.e. effectively no tax on rental income as long as tax on rental income is greater than mortgage interest?

[Venger]

I recall a Dislexic Landlord commenting on a Fergus Wilson video many years ago... in her 'good times'.

dislexic landlord - 6 years ago
this is quite funny

But I would not mind being a penny behind MR wilson
best of luck to him.

[...]Sorry to disappoint but far from some irrational and emotive personal dislike this is simply an overriding conflict of interest: we (people in general) want to own the homes that we live in and you (landlords in general) want to own the homes that we live in.

Both groups can't reach a mutually satisfactory arrangement because the two positions are mutually exclusive: the more landlords get what they want (our homes) the more people in general are denied what they want (their own homes).

Unless you're all planning on irrationally demolishing your investment properties there is no reason whatsoever to think that the government being slightly less encouraging towards leveraged property investment (remembering when all is said and done there is still a 20% tax break on offer for such) will lead to any increase in homelessness.

Claiming that it will is both illogical and an implicit admission that your own fate - as a leveraged investor who has been, up until this point, profiting off the back of high risk deals that you chose to make with bankers of your own free will - is unlikely to bother anyone at all.

[Bland Unsight]

Sorry, this is probably a stupid question, but wasn't tax relief in respect of income on property only? I.e. tax on £1000 rental income is £400, and that's the amount the landlord can get as tax relief?

I.e. effectively no tax on rental income as long as tax on rental income is greater than mortgage interest?

You need the concept of income from property chargeable to tax and the rules governing its calculation.

At present when leveraged landlords calculate their taxable income from their property business they are allowed to deduct mortgage interest.

If the mortgage is less than the amount the property was worth when they first made it available for rent then at present they can deduct all the mortgage interest from the rent when determining the income chargeable to tax.

For example, if there was £10,000 of rent but £8,000 of interest paid, there is only £2,000 of income chargeable to tax, (and at the 40% rate you'd pay £800 of tax, the property generates a net cash flow of £2,000 pa before tax and £1,200 pa after tax).

As a result for some of them, their investments produce essentially no taxable income once mortgage interest, managing agent fees and other costs are deducted. For a portfolio constructed in this way, it's all about the hoped for capital gain.

Hence what has really happened is that the government has changed which expenses are and are not allowable deductions when calculating the taxable income. By 2021 the interest will not be an allowable deduction.

Hence returning to the above example, you've still got £10,000 of rent, and you still paid £8,000 of interest, and your net cash flow before tax is still only £2,000, but your taxable income is now £10,000 because you are now no longer allowed to deduct the interest expense when determining the taxable income from your rental property, (and you now pay £4,000 worth of tax if your property income is taxed at the 40% rate)

To partially offset this change the government also introduced a relief that did not previously exist, which is set at the basic rate of tax. Hence you first calculate your income (without deducting the mortgage interest expense) and then you calculate your tax bill, and then you get a relief (i.e. a reduction of your tax bill equal to 20% of the mortgage interest you paid). Hence on the numbers above your £4,000 tax bill is reduced by the £1,600 relief (20% of the £8,000 interest expense) leaving you owing HMRC £2,400.

Of course as your net cash flow before tax was only £2,000 the cash the property generated is inadequate to pay the tax, so you'll have to use other income or savings to pay the tax bill on the BTL - it is costing you money to operate the investment, hence you better hope there's a capital gain, because otherwise you're throwing good money after bad.

As noted before the way that it was presented in the summer budget is misleading, presumably intentionally. I don't think that strictly speaking it is true to say that an existing relief was restricted.

Any sane person's eyes would have glazed over at some point half-way through this post, and that is why their attempt to generate any outrage is doomed to fail. The PovertyLater tw@ts are real outliers in the BTL game in terms of how badly affected they are. At time of writing less than 850 of them have come up with any money to fund the Judicial Review.

[Bear Hug]

Thanks! It makes a lot more sense to me now with the examples.

I know most people here already talked about it many times, and I understood the general direction of the tax changes, but it's nice to see some numbers.

HPC is getting more real every day!

You need the concept of income from property chargeable to tax and the rules governing its calculation.

...

No the tax relief was on the mortgage interest payment which could be treated as a business expense and so you could claim back 40% tax, plus of course 10% of the rent as 'wear and tear' expenses without receipts.

[Pop321]

Thanks! It makes a lot more sense to me now with the examples.

I know most people here already talked about it many times, and I understood the general direction of the tax changes, but it's nice to see some numbers.

HPC is getting more real every day!

On the same example for an unleveraged LL they currently get £10000 rent and has no interest to deduct and pays £4000 tax.

After the S24 change that same LL now gets £10000 rent and pays £4000 tax, stratches his head and wonders what all the fuss is about.

Fundamentally a different model. The unleveraged LL pays more tax - leveraging effectively not only enables someone to buy more houses, I assume to improve how interesting they are at dinner parties, but also mitigates tax.

If interest rates rise to a normal level then the £10000 rent comes in but the £16000 mortgage goes out and the leverage LL is b@llock3d. Oh and the lovely twist is (for higher rate tax payers) they still need to pay tax because the mortgage interest is not a deductible expense.

The if rates double the unleveraged LL takes £10000 rent, pays £4000 tax and stratches his head and wonders what all the fuss is about.

The thing I did learn from 118'ers is that on many of their examples this £10k rent wasn't a year it was a month!!! The fact they are now struggling highlights the MASSIVE borrowings they had and the ridiculous risk they took. It also illustrates to me how quickly they will fail when rates rise. S24 is just the frill around the edges and they are moaning because 'it is a tax change'. But the failure for the leveraged LL was has already been written - S24 was GO's helpful warning to signal a good time to sell and exit.

The problem is many can't sell because they have not saved any reserves and any gain from HPI has been borrowed against and spent already. So selling may present them with CGT bill which they can't pay. Great business plan!

Still a lot of Range Rover petrol and quail eggs along the way.

[justthisbloke]

They're now trying to get students and the NUS on board their campaign. http://www.property118.com/government-interference-could-lead-to-student-rents-tripling/87111/

It is clear that Section 24 of the Finance Act and the subsequent attacks on landlords made by the Treasury since July are going to lead to far higher levels of student debt than have been seen before in this country. Hopefully students’ representatives will wake up to this sooner rather than later as it is a ticking time bomb, with students facing a triple whammy delivered by the Government, all of which will lead to higher rents:

1. Taxing on ‘fictitious income’ which will force landlords to increase rents.
2. Shrinking the PRS as landlords will not work for nothing and even to be taxed on a loss – also leading to higher rents.
3. Favouring the institutions by not taxing them on fictitious profit – and they specialise in higher rents.

[Fully Detached]

They're now trying to get students and the NUS on board their campaign. http://www.property118.com/government-interference-could-lead-to-student-rents-tripling/87111/

I guessed who wrote that pile of shite long before I clicked the link.

Even though I suspect the majority of students might initially be taken in by a BTL tw4t telling them that they were being taxed on turnover, it won't take much for students as a whole to decide that people farming is definitely not cool and the whole thing will blow up in their faces quite spectacularly. Bring it on.

[thewig]

They're now trying to get students and the NUS on board their campaign. http://www.property118.com/government-interference-could-lead-to-student-rents-tripling/87111/

If I may paraphrase:

1. Just rent it out.

2. Just put the rents up.

3. Innit.

[Bland Unsight]

If I may paraphrase:

1. Just rent it out.

2. Just put the rents up.

3. Innit.

(But you have to read it out in a Welsh accent, whilst head bopping to dank tunezzzzzz)

[SOLZHENITSYN]

I note she's now changed her profile name from 'Ros' to 'Dr Roaslind Beck'

Is this in the hope that she comes across more as an academic to students in the hope this will garner her favour? ?

[thewig]

Famous quotes from Welsh figures of fun #264

"If you continue to persecute us like the Jews were, we'll just put the rents up, Innit."

Dr Bosalind "nervous" Wreck, 2016

[jiltedjen]

Can't wait for these morons to go bust.

[justthisbloke]

I note she's now changed her profile name from 'Ros' to 'Dr Roaslind Beck'

Is this in the hope that she comes across more as an academic to students in the hope this will garner her favour?

She probably thinks that a post on PovertyLater counts as a publication in a high impact factor journal.

Talking of overselling, take the time to read the post "valuing" the 118 website while you're over there.

[spyguy]

I note she's now changed her profile name from 'Ros' to 'Dr Roaslind Beck'

Is this in the hope that she comes across more as an academic to students in the hope this will garner her favour?

It's to let people know she's 'clever' . Otherwise, any one reading her posts and arguments will think she's as thick as sh1t.

Isn't her PhD in something made up like criminology? You can get those from a correspondence course - where you don't need to correspond much.

[Neverwhere]

They're now trying to get students and the NUS on board their campaign. http://www.property118.com/government-interference-could-lead-to-student-rents-tripling/87111/

I see Operation Human Shield is now trying to push the kids out in front of them.

If working private sectors tenants move into owner occupation then the properties they vacate will be available for the remaining renters, including students, and there will be no change to the overall demand for rental properties relative to the overall number of rental properties.

Likewise if lower leveraged landlords purchase the properties then there is no change to demand relative to supply.

What's more students tend to have fixed incomes (student loans) and so lack additional funds that could be squeezed out of them as higher rents. BTL landlords can fantasise about putting student rents up all they want but they will be unable to achieve very much in practice.

I guessed who wrote that pile of shite long before I clicked the link.

Even though I suspect the majority of students might initially be taken in by a BTL tw4t telling them that they were being taxed on turnover, it won't take much for students as a whole to decide that people farming is definitely not cool and the whole thing will blow up in their faces quite spectacularly. Bring it on.

Good point! Rent strikes all round.