Btl Scum Regrouping And On The Offensive. -- Merged

[hi5lo5]

10 hours ago, mrtickle said:

Indeed. 

" I was thinking about Section 24 and the news that Hammond recently commented that if we could replace the revenue expected from S24 he would consider its repeal "

Did he ACTUALLY say that? I doubt it somehow.

 

If the Govt aim is to raise revenue and revenue only, the PRA wouldn't have got the nod from govt to regulate the BTL. There is a housing crisis, in this country, caused by the developers and the double down BTLers and the recent policies from the govt just demonstrates to defuse the crisis in more orderly manner. 

If the govt repeals it with a universal BTL tax, there is no competition in the industry and every LL will just raise the rent to cover the tax which eventually be paid by tenenattax and has every right to be called real tenenattax.  This will lead the renters revolting against Tory and may even turn to Labour. 

What amuses me is a group of debt junkies who have no way out of S24 formed a lobbying group called "axe the tenant tax" and the irony is their proposal is introduce a "introduce tenant tax".

[Bland Unsight]

11 hours ago, Exiled Canadian said:

I was recently at a meeting with a CEO whose business is closely related to the residential property market.  He told me explicitly that the government wants to increase owner occupation and reduce BTL.  I know that this chap is in regular contact with policy makers.  He didn't actually say "I've been told by [insert name of cabinet minister]...." but the implication was clear.

Interesting, thanks for posting. It has certainly read just like that from the cheap seats. Be interesting to see what parts of the the forthcoming housing bill amount to more of the same. I think that licensing requiring landlords to meet pretty onerous commitments would push a lot of half-@rsed BTL to sell up (e.g. people who've hung onto their old flat because you can't go wrong with property). Another way to go would be to reform the AST. Nothing about either has crossed my radar yet, so I'm not holding my breath (mixed metaphors abound).

[Venger]

Don't recall seeing this on HPC.

Followed up on one of @hi5lo5 118 links, and found the 'AxeTenantTax' update link on a comment by one of the 118 members, from yesterday.

 

Quote

My impression was that he felt the impact of the Tenant Tax would be minimal. He alluded to the fact that Shelter don’t think it will be a problem and there is a lot of “scaremongering” going on. I obviously disagreed strongly on these points.

 

[Confusion of VIs]

12 hours ago, Exiled Canadian said:

I was recently at a meeting with a CEO whose business is closely related to the residential property market.  He told me explicitly that the government wants to increase owner occupation and reduce BTL.  I know that this chap is in regular contact with policy makers.  He didn't actually say "I've been told by [insert name of cabinet minister]...." but the implication was clear.

I did speak to the Housing Minister about this, asking if there was any chance he would bow to pressure and rescind or amend S24 and got a straight and emphatic no.

When a politician doesn't give themselves any wiggle room for backtracking you know they must be fully committed to a policy.  

[BorrowToLeech]

11 hours ago, hi5lo5 said:

If the Govt aim is to raise revenue and revenue only, the PRA wouldn't have got the nod from govt to regulate the BTL. There is a housing crisis, in this country, caused by the developers and the double down BTLers and the recent policies from the govt just demonstrates to defuse the crisis in more orderly manner. 

If the govt repeals it with a universal BTL tax, there is no competition in the industry and every LL will just raise the rent to cover the tax which eventually be paid by tenenattax and has every right to be called real tenenattax.  This will lead the renters revolting against Tory and may even turn to Labour. 

What amuses me is a group of debt junkies who have no way out of S24 formed a lobbying group called "axe the tenant tax" and the irony is their proposal is introduce a "introduce tenant tax".

No. 

Landlords aren't subject to competition. The economics of Landlording means they cannot raise rents to cover costs,  and so no taxes can be passed on to tenants ever. 

This isn't some obscure conspiracy theory, this is literally economics 101, and it's backed by more evidence than almost any other economic law. Rents follow wages, they have nothing to do with landlord costs. 

[hi5lo5]

1 hour ago, BuyToLeech said:

No. 

Landlords aren't subject to competition. The economics of Landlording means they cannot raise rents to cover costs,  and so no taxes can be passed on to tenants ever. 

This isn't some obscure conspiracy theory, this is literally economics 101, and it's backed by more evidence than almost any other economic law. Rents follow wages, they have nothing to do with landlord costs. 

118ers proposal is to impose a 2% levy on every BTL property. since this isn' t a significant raise and just on the levels of inflation. The LLs can suck this out from tenants or at least recoupe this amount in some form or the other means and it will truly be a "tenant tax". 

[Ah-so]

1 hour ago, BuyToLeech said:

No. 

Landlords aren't subject to competition. The economics of Landlording means they cannot raise rents to cover costs,  and so no taxes can be passed on to tenants ever. 

This isn't some obscure conspiracy theory, this is literally economics 101, and it's backed by more evidence than almost any other economic law. Rents follow wages, they have nothing to do with landlord costs. 

Economics 101 does teach that increases in taxes can get passed on as price rises. Not all, but a portion. http://www.investopedia.com/exam-guide/cfa-level-1/microeconomics/tax-effects.asp

Not sure if this piece of economic theory would apply to the rental market, but I see no obvious reason why it shouldn't in part. 

[Venger]

Quote

My impression was that he felt the impact of the Tenant Tax would be minimal. He alluded to the fact that Shelter don’t think it will be a problem and there is a lot of “scaremongering” going on. I obviously disagreed strongly on these points.

Makes me laugh that after all those letters to 'Phil' - including this one (lol) - he finally gets his meeting, and gets this response above.

Although the BTLers position isn't as deluded as those who tip up on this thread, claiming BTLers are all low IQ - all the millions of them now having BTL/LL claims on 1 in every 5 homes - been taken advantage of by something or other (they couldn't know anything about anything about their market decisions), and that perhaps renter-savers should also want S24 dropped.... because BTLers who have to adjust is just 'more people hurt' by it all... with main concern on the BTLers who may have to sell their own homes.

 

[Venger]

5 hours ago, Ah-so said:

Economics 101 does teach that increases in taxes can get passed on as price rises. Not all, but a portion. http://www.investopedia.com/exam-guide/cfa-level-1/microeconomics/tax-effects.asp

Not sure if this piece of economic theory would apply to the rental market, but I see no obvious reason why it shouldn't in part. 

You may be right, but I still prefer buytoleech's response in all of the wider circumstances behind Section 24.

It's an English 101 remedial kick-ass explanation for all the BTLers who have been putting up tenant human shield response for months about all BTLers/LLs raising rents, in their pathetic attempts to get S24 overturned.

(One part of 'bad language' - not safe for work).

 

[Venger]

6 hours ago, Ah-so said:

Economics 101 does teach that increases in taxes can get passed on as price rises. Not all, but a portion. http://www.investopedia.com/exam-guide/cfa-level-1/microeconomics/tax-effects.asp

Not sure if this piece of economic theory would apply to the rental market, but I see no obvious reason why it shouldn't in part. 

And more importantly, the Treasury see the BTLers/LLs as not being able to manipulate rents up as a whole.   From ATT facebook letter (lol) below.  

Price takers not price setters, imo - with perhaps just some 'power' during a wider transition.   

I mean we're reading about a few BTLers who are rounding up their tenants to go on the radio with them, to explain their BTLer LL has upped the rent, and they're now struggling, but LL told them it was all due to S24.   Type of BTLer some tip up here claiming 'BTLer innocence'... all-okay for those BTLers to round up tenants, hiking rents under claim it's "all due to S24" with all their claims on multiple homes for their own 'pension' self.   Not providing, but monoplising.  (Neverwhere).

Quote

 

And on this last point George, did you hear the latest wisdom coming out from your young chums at the Treasury? Last week, in a letter to one of our very hard-working and committed volunteers, Gareth Wilson, this is what they said...

"Most of the costs will usually be absorbed by the landlord due to rent prices largely being set by supply and demand."

Seriously George! Did you employ the fool that wrote that letter?

Have they ever spoken to a landlord? 
Have they ever done any real world research?

 

 

[Ah-so]

1 hour ago, Venger said:

And more importantly, the Treasury see the BTLers/LLs as not being able to manipulate rents up as a whole.   From ATT facebook letter (lol) below.  

Price takers not price setters, imo - with perhaps just some 'power' during a wider transition.   

I mean we're reading about a few BTLers who are rounding up their tenants to go on the radio with them, to explain their BTLer LL has upped the rent, and they're now struggling, but LL told them it was all due to S24.   Type of BTLer some tip up here claiming 'BTLer innocence'... all-okay for those BTLers to round up tenants, hiking rents under claim it's "all due to S24" with all their claims on multiple homes for their own 'pension' self.   Not providing, but monoplising.  (Neverwhere).

 

The Economics 101 theory that I quoted demonstrates 2 weaknesses in the property 18th argument:

1. Taxes do not get eaten by the consumer - they largely get shared with the seller.

2. The theory assumes that the tax applies to the good universally, but the reality of the rental market is that this tax only affects the more levered landlords. Landlords without mortgages will not feel costs increase and so there will not be universal pressure on prices. The BTL crowd will have to eat this tax.

[PropertyMania]

10 hours ago, BuyToLeech said:

No. 

Landlords aren't subject to competition. The economics of Landlording means they cannot raise rents to cover costs,  and so no taxes can be passed on to tenants ever. 

This isn't some obscure conspiracy theory, this is literally economics 101, and it's backed by more evidence than almost any other economic law. Rents follow wages, they have nothing to do with landlord costs. 

In the short term this may be true, but medium to long term landlords getting out of market = lower rental supply = higher rents

[thewig]

7 minutes ago, PropertyMania said:

In the short term this may be true, but medium to long term landlords getting out of market = lower rental supply = higher rents

I struggle with this one. Given the parasite supply side can only be taken up by a. another dirty parasite or b. an actual person, for every grimy parasite you surgically remove from the market like a pus filled boil you also remove one actual person from the demand side who was previously renting from the scumbag parasite DEBTjunkie. Someone else has also argued on here that the tenants converting to owners in this great bonfire of the DEBTjunkies will more likely.be the ones on higher incomes as in position to meet falling prices first therefore the remaining pool of actual people left renting from the parasitic scumbags will be on lower average income thus putting downward pressure on rents?

[BorrowToLeech]

9 hours ago, Ah-so said:

Economics 101 does teach that increases in taxes can get passed on as price rises. Not all, but a portion. http://www.investopedia.com/exam-guide/cfa-level-1/microeconomics/tax-effects.asp

Not sure if this piece of economic theory would apply to the rental market, but I see no obvious reason why it shouldn't in part. 

That's exactly the theory I'm referring to (although you can look at it in a number of other ways, they're all equivalent).

In this case the supply curve is flat - the supply cannot significantly change to respond to price, so price is set by demand.  

And there's good evidence this is true.

I'll concede that economics is only approximate, so 'all' and 'never' is maybe an exaggeration, but that is what the theory says.

[PropertyMania]

4 minutes ago, thewig said:

I struggle with this one. Given the parasite supply side can only be taken up by a. another dirty parasite or b. an actual person, for every grimy parasite you surgically remove from the market like a pus filled boil you also remove one actual person from the demand side who was previously renting from the scumbag parasite DEBTjunkie. Someone else has also argued on here that the tenants converting to owners in this great bonfire of the DEBTjunkies will more likely.be the ones on higher incomes as in position to meet falling prices first therefore the remaining pool of actual people left renting from the parasitic scumbags will be on lower average income thus putting downward pressure on rents?

Interesting idea. Thinking about it in reverse: Landlords buying homes that would have gone to owners = more owners renting = rents yields staying constant / rising? But this doesn't seem to have happened - rents have increased much less than house prices. Maybe just not enough crossover between the owner and renter groups?

[BorrowToLeech]

15 minutes ago, PropertyMania said:

Interesting idea. Thinking about it in reverse: Landlords buying homes that would have gone to owners = more owners renting = rents yields staying constant / rising? But this doesn't seem to have happened - rents have increased much less than house prices. Maybe just not enough crossover between the owner and renter groups?

Not sure I understand your point. 

Landlords buying houses to rent out doesn't help to meet the existing 'demand' for rental houses, because it just creates new tenants, so this process has no real impact on rents.

That doesn't mean rents never change, it just means they don't change due to supply.

Rents are mostly determined by local incomes, and have risen in line with wage inflation.  That's what it means to say the price is set by demand - price is set by what people can and will pay.

House prices are (roughly) the net present value of the rental income, which is (approximately)

rent / mortgage rate

So prices are inflated by falling interest rates.

Edited February 3, 2017 by BuyToLeech

[Venger]

4 hours ago, PropertyMania said:

In the short term this may be true, but medium to long term landlords getting out of market = lower rental supply = higher rents

It's like you have the mind of a BTLer.  Welcome to 'the' thread.

 

[spyguy]

4 hours ago, PropertyMania said:

In the short term this may be true, but medium to long term landlords getting out of market = lower rental supply = higher rents

No.

The rental market is very elastic.

Reduction of suppky does not mean a similar increase in demand.

For example.

In my first job, I was put up in a nice flat by the company for 6 months whilst I looked for somewhere to live.

I found a house share with 3 other people, 2 of whom were also being put up by companies.

3 seperate lets went into 1 larger let.

The total rent paid by all of dropped by 80%.

Add stuff like going and staying with parents, sofa surfing, B+B for a bit.

 

[iamnumerate]

2 minutes ago, spyguy said:

No.

The rental market is very elastic.

Reduction of suppky does not mean a similar increase in demand.

For example.

In my first job, I was put up in a nice flat by the company for 6 months whilst I looked for somewhere to live.

I found a house share with 3 other people, 2 of whom were also being put up by companies.

3 seperate lets went into 1 larger let.

The total rent paid by all of dropped by 80%.

Add stuff like going and staying with parents, sofa surfing, B+B for a bit.

 

Very true, which is why when people say "Very few people sleep on the streets, therefore we don't need homes" - they are wrong.

If my parents house fell down tomorrow - they would not sleep on the streets they could stay with me, but they would still have the need for a home.

[Gush]

4 hours ago, PropertyMania said:

landlords getting out of market = lower rental supply = higher rents

I thought these BS were thrown out in the first few pages, now again after hundreds of pages of BTLer tearing apart....

 "landlords getting out of market" is only one side of the argument/T accounting, the other side is one tenant becomes OO. 

[Ah-so]

5 hours ago, BuyToLeech said:

That's exactly the theory I'm referring to (although you can look at it in a number of other ways, they're all equivalent).

In this case the supply curve is flat - the supply cannot significantly change to respond to price, so price is set by demand.  

And there's good evidence this is true.

I'll concede that economics is only approximate, so 'all' and 'never' is maybe an exaggeration, but that is what the theory says.

I think we are basically in the same page on this. And as in my other post on this topic above, the large presence of unleveraged landlords in the market provides little room to force up rents.

[B63]

http://www.thisismoney.co.uk/money/buytolet/article-4187714/Buy-let-tax-crackdown-branded-terrible-tax-change.html#article-4187714

"Government plans to strip buy-to-let landlords of mortgage interest tax relief have been branded 'terrible' by former Bank of England economist David Miles"

This article could do with a few comments to correct David Miles' point of view.

[Venger]

Hehe 'terrible'.

 

Quote

 

Miles also warned that the tax change would exacerbate the plight of would-be home owners trying to save for a deposit for their first home by forcing them to spend even more of their income on rent.  

'That makes life for those people who hope to be owner occupiers but are still in the rental sector unambiguously worse off,' he said. 

 

Wonder why he is so involved in this?

Quote

Professor David Miles was a Monetary Policy Committee member at the Bank of England from 2009 until 2015.

Professor Miles was Chief UK Economist at Morgan Stanley from October 2004 to May 2009.

 

He has been a specialist economic advisor to the Treasury Select Committee. In the 2003 Budget, the Chancellor commissioned Professor Miles to lead a review of the UK mortgage market. The result, published at Budget 2004, was the report 'The UK mortgage market: taking a longer-term view'. He is a former editor of Fiscal Studies. 

http://www.bankofengland.co.uk/about/Pages/people/biographies/miles.aspx

 

Got some advice for him.... things change, life isn't fair, and

Quote

 I will escalate it as you request, however please note that (as I’m sure you are aware already) Treasury Budgets are not things the Bank has any say in. So you are indeed best to deal direct with the Treasury, even if as a private citizen you are unlikely to influence government policy.

 

[Venger]

2% the new 5% and more...

or a few years, with a BTLers double-down, before HPC galore on complacent minds?

[Fairyland]

DT is also saying: 

Analysis: are falling rents about to add to buy-to-let investors' woes?