A Goodbye To All That Buy To Let

[spyguy]

44 minutes ago, Si1 said:

Really...? Wouldn't he still have to pay capital gains correlating to the time he lived in the UK?

I dont think its that simple.

Hmrc would class it as tax evasion, as hes unlikely to have job there and his assets/connection is in uk.

[Ah-so]

1 hour ago, spyguy said:

I dont think its that simple.

Hmrc would class it as tax evasion, as hes unlikely to have job there and his assets/connection is in uk.

I tend to agree. He's sold a lot, but not only time will tell if he has escaped his tax liability.

[Bear Hug]

This is a miracle, but there is a good article on poverty118:

https://www.property118.com/average-buy-to-let-makes-a-return-of-just-2k-a-year-pre-tax/

Quote

What’s left?

Based on an average annual rental income of £8,112 divided by the average B2L property cost of £183,278, the average yield available is 4.4% – that’s an annual sum of £8,119.

Over the last decade, the capital appreciation of bricks and mortar has also averaged an increase of 2.85% a year, £5,223 in monetary terms. That means B2L landlords are seeing a return of £13,343 on their investment.

However, leaving start-up costs and unforeseen events out of the equation, once the average UK landlord has paid the ongoing costs associated with a buy-to-let property each year, they’re left with a profit of just £2,140.

An that's assuming capital appreciation and ignoring income tax. Stationary house prices = guaranteed loss!

[rantnrave]

Auction entries rise as clobbered buy-to-let landlords look to sell their properties

https://propertyindustryeye.com/auction-entries-rise-as-clobbered-buy-to-let-landlords-look-to-sell-their-properties/

Auction House, which works with a network of local agents, has a record 846 lots entered into its sales this month.

The boost is largely from buy-to-let landlords selling off their properties.

In its 12-year history, Auction House has not had a month like it.

Founding director Roger Lake said: “Taxation changes are driving many investors to sell off their rental properties.”

He added: “There are still large-scale landlords buying such stock, and plenty of refurbishment specialists who would acquire and carry out improvement programmes.”

Auction House, which holds physical auctions as well as weekly national online sales, has so far sold 2,256 lots this year, up 4.6% on last year.

[crazypabs]

1 hour ago, rantnrave said:

Auction entries rise as clobbered buy-to-let landlords look to sell their properties

https://propertyindustryeye.com/auction-entries-rise-as-clobbered-buy-to-let-landlords-look-to-sell-their-properties/

Auction House, which works with a network of local agents, has a record 846 lots entered into its sales this month.

The boost is largely from buy-to-let landlords selling off their properties.

In its 12-year history, Auction House has not had a month like it.

Founding director Roger Lake said: “Taxation changes are driving many investors to sell off their rental properties.”

He added: “There are still large-scale landlords buying such stock, and plenty of refurbishment specialists who would acquire and carry out improvement programmes.”

Auction House, which holds physical auctions as well as weekly national online sales, has so far sold 2,256 lots this year, up 4.6% on last year.

Axe the tenant tax FB group are bawling about this too... Lol

https://m.facebook.com/story.php?story_fbid=2595283010514687&id=1077700412272962&anchor_composer=false

[spyguy]

1 hour ago, rantnrave said:

Auction entries rise as clobbered buy-to-let landlords look to sell their properties

https://propertyindustryeye.com/auction-entries-rise-as-clobbered-buy-to-let-landlords-look-to-sell-their-properties/

Auction House, which works with a network of local agents, has a record 846 lots entered into its sales this month.

The boost is largely from buy-to-let landlords selling off their properties.

In its 12-year history, Auction House has not had a month like it.

Founding director Roger Lake said: “Taxation changes are driving many investors to sell off their rental properties.”

He added: “There are still large-scale landlords buying such stock, and plenty of refurbishment specialists who would acquire and carry out improvement programmes.”

Auction House, which holds physical auctions as well as weekly national online sales, has so far sold 2,256 lots this year, up 4.6% on last year.

Thats BS to both those claims.

Im not seeing much in he way of builders doing refurbs - they cannot get the finance.

As far as large scale LL buying. Nope, none.

 

[Neverwhere]

On 12/09/2019 at 23:36, Bear Hug said:

This is a miracle, but there is a good article on poverty118:

https://www.property118.com/average-buy-to-let-makes-a-return-of-just-2k-a-year-pre-tax/

An that's assuming capital appreciation and ignoring income tax. Stationary house prices = guaranteed loss!

Nice to see some of the landlords making the same point!

Quote

One thing left out in the figures is service charges which are outside the landlords control.
Also the capital appreciation in some areas is non existent if not negative.

Quote

Indeed. I only wish ours had gone up £5000+ a year. On the flats, the service charges are now at least 60% up on ten years ago while rents have barely increased at all, and capital appreciation is nearer 2.9% over that period, not 2.9% p.a.

 

[spyguy]

Might be the same source.

https://www.lettingagenttoday.co.uk/breaking-news/2019/9/revealed--how-little-a-typical-buy-to-let-investor-makes-in-a-year

The numbers are unchanged leveraged io btl fwittery is nuts. Always has been.

Why banks are happy to let these idiots speculate on property at such a small margin is beyond me. Banks ned to be charging commercial bridging loans - 3% month compounding.

Oh, the 'profit' is pre tax.

And the voids are too low comiated to the places i see - well into 8 weeks

 

[Timbuk3]

11 hours ago, spyguy said:

Might be the same source.

https://www.lettingagenttoday.co.uk/breaking-news/2019/9/revealed--how-little-a-typical-buy-to-let-investor-makes-in-a-year

The numbers are unchanged leveraged io btl fwittery is nuts. Always has been.

Why banks are happy to let these idiots speculate on property at such a small margin is beyond me. Banks ned to be charging commercial bridging loans - 3% month compounding.

Oh, the 'profit' is pre tax.

And the voids are too low comiated to the places i see - well into 8 weeks

 

surely now the LL has to pay tax on the income of £8134 at rate of at least 20% more possibly 40% which would wipe out profits.  But they wouldnt need to pay stamp duty every year. Either way its a poor return on 183 grand. can do better elsewhere.  without a large capital gain on the house theres no point in investing. and recently there no price gains. a small % drop and they are well into a loss. 

[Pop321]

26 minutes ago, Timbuk3 said:

surely now the LL has to pay tax on the income of £8134 at rate of at least 20% more possibly 40% which would wipe out profits.  But they wouldnt need to pay stamp duty every year. Either way its a poor return on 183 grand. can do better elsewhere.  without a large capital gain on the house theres no point in investing. and recently there no price gains. a small % drop and they are well into a loss. 

The thing that will divert landlords away is often the hassle not the numbers. Many can’t add up. 

For those with actual money the underlying problem is knowing where to put it. Many believe shares aren’t a real asset eg M&S (and Co) don’t own their stores, don’t own their stock, don’t own their staff...share price is based on past performance rather on predicted income which at best is a 2/3 year horizon with the world changing as fast as it is. 

Gold, bitcoin or antiques etc are a bit too specialist. 

The big problem is the £183k is not their money. Issue is you can borrow and leverage on property. Ie it’s not ‘our my money in property as a pension’ because it’s not their money. It’s perceived as a clever little scam where even with almost no return after 25 years you probably own a house paid for by someone else. Unless of course any small profit has been used to buy a Range Rover ?

S24 helped. But will need to go further. Fundamentally being able to borrow to buy any investment is the key problem. Particularly with historic low interest rates.

I am not advocating property as a good idea...rather trying to express what I believe rattles around these people’s heads.

Edited September 17, 2019 by Pop321

[Confusion of VIs]

The end of lettings relief after April 2020 is probably a factor now. 

Selling after the end of this tax year loses you £40k plus 9 months of tax relief, equating to an overnight drop in value of potentially +£20k.

I suspect that many possibly most landlords are still unaware of this. 

[Gush]

1 hour ago, Pop321 said:

The thing that will divert landlords away is often the hassle not the numbers. Many can’t add up. 

For those with actual money the underlying problem is knowing where to put it. Many believe shares aren’t a real asset eg M&S (and Co) don’t own their stores, don’t own their stock, don’t own their staff...share price is based on past performance rather on predicted income which at best is a 2/3 year horizon with the world changing as fast as it is. 

Gold, bitcoin or antiques etc are a bit too specialist. 

The big problem is the £183k is not their money. Issue is you can borrow and leverage on property. Ie it’s not ‘our my money in property as a pension’ because it’s not their money. It’s perceived as a clever little scam where even with almost no return after 25 years you probably own a house paid for by someone else. Unless of course any small profit has been used to buy a Range Rover ?

S24 helped. But will need to go further. Fundamentally being able to borrow to buy any investment is the key problem. Particularly with historic low interest rates.

I am not advocating property as a good idea...rather trying to express what I believe rattles around these people’s heads.

My only hope is on Corbyn to cut the tax incentives and introduce new taxes on a weekend. These leeches would be dead by the start of the week.

[highcontrast]

 

On 17/09/2019 at 10:33, Confusion of VIs said:

The end of lettings relief after April 2020 is probably a factor now. 

Selling after the end of this tax year loses you £40k plus 9 months of tax relief, equating to an overnight drop in value of potentially +£20k.

I suspect that many possibly most landlords are still unaware of this. 

https://www.telegraph.co.uk/investing/buy-to-let/landlords-urged-sell-buy-to-let-properties-now-tax-bills-soar/

"...Tax advisers have warned landlords to consider selling their buy-to-let properties now before a slew of new rules coming in April take a bigger bite out of their already squeezed incomes.

The incoming tax changes means property investors could be better off selling now, experts have said, despite the current weakness in the market."

So. Much. Bear. Food....yom yom yom. And it's not even a full article to read! Squirm you dirty leaching turds... oh and sell up while you still can! Lolz

 

[Timbuk3]

1 hour ago, highcontrast said:

 

https://www.telegraph.co.uk/investing/buy-to-let/landlords-urged-sell-buy-to-let-properties-now-tax-bills-soar/

"...Tax advisers have warned landlords to consider selling their buy-to-let properties now before a slew of new rules coming in April take a bigger bite out of their already squeezed incomes.

The incoming tax changes means property investors could be better off selling now, experts have said, despite the current weakness in the market."

So. Much. Bear. Food....yom yom yom. And it's not even a full article to read! Squirm you dirty leaching turds... oh and sell up while you still can! Lolz

 

http://propertyindustryeye.com/auction-entries-rise-as-clobbered-buy-to-let-landlords-look-to-sell-their-properties/   

Looks like its starting already.  

[Pop321]

11 hours ago, highcontrast said:

 

https://www.telegraph.co.uk/investing/buy-to-let/landlords-urged-sell-buy-to-let-properties-now-tax-bills-soar/

"...Tax advisers have warned landlords to consider selling their buy-to-let properties now before a slew of new rules coming in April take a bigger bite out of their already squeezed incomes.

The incoming tax changes means property investors could be better off selling now, experts have said, despite the current weakness in the market."

So. Much. Bear. Food....yom yom yom. And it's not even a full article to read! Squirm you dirty leaching turds... oh and sell up while you still can! Lolz

 

I think this is starting to be really interesting. In our town (affluent N Yorkshire spot) historically landlords rarely sell. But I am definitely seeing plenty of sales....and as I suspected it’s houses in ‘the rental areas’ which are coming up. 

The thing that is interesting is that it is debt that seems to be the main issue and rather than property. What I mean is people aren’t selling their shares or gold because of Brexit (or whatever a current issue affecting assets might be) and that is because it’s things they own. However the majority selling property are those with debt and although it’s been said before it seems debt was always the significant weight that created the imbalance and drove up prices. 

S24 as a first step to redress this and makes BTL almost a completely non viable option. Effectively debt makes property a leveraged gamble for those without assets. Lots of quotes in papers saying ‘I invested my money in property for a pension’ and then go on to explain its 85% interest only debt...so they are not investing ‘their money’. 

For those still set on property with £500k may still buy a little flat or terrace for £170k yielding 6/7% as part of their ‘investments’ and any growth is a bonus....indeed a capital loss is also acceptable due to the yield. However what seems to have stopped (indeed reversing) is those who are risking everything with debt on the hope of HPI because the rent calculation doesn’t work and a drop in prices completely smashes their equity.

And the 118’er debt guy is the majority so we are definitely seeing a slow down in HPI. (I would say a fall in prices but this is North Yorkshire...so not as previously buoyant or out of reach as the South)

Definitely worth watching how this plays out. FTB’ers should be sat on their hands and definitely not buying the daft new builds which seem to be 40% more than they should be. 

[spyguy]

2 minutes ago, Pop321 said:

I think this is starting to be really interesting. In our town (affluent N Yorkshire spot) historically landlords rarely sell. But I am definitely seeing plenty of sales....and as I suspected it’s houses in ‘the rental areas’ which are coming up. 

The thing that is interesting is that it is debt that seems to be the main issue and rather than property. What I mean is people aren’t selling their shares or gold because of Brexit (or whatever a current issue affecting assets might be) and that is because it’s things they own. However the majority selling property are those with debt and although it’s been said before it seems debt was always the significant weight that created the imbalance and drove up prices. 

S24 as a first step to redress this and makes BTL almost a completely non viable option. Effectively debt makes property a leveraged gamble for those without assets. Lots of quotes in papers saying ‘I invested my money in property for a pension’ and then go on to explain its 85% interest only debt...so they are not investing ‘their money’. 

For those still set on property with £500k may still buy a little flat or terrace for £170k yielding 6/7% as part of their ‘investments’ and any growth is a bonus....indeed a capital loss is also acceptable due to the yield. However what seems to have stopped (indeed reversing) is those who are risking everything with debt on the hope of HPI because the rent calculation doesn’t work and a drop in prices completely smashes their equity.

And the 118’er debt guy is the majority so we are definitely seeing a slow down in HPI. (I would say a fall in prices but this is North Yorkshire...so not as previously buoyant or out of reach as the South)

Definitely worth watching how this plays out. FTB’ers should be sat on their hands and definitely not buying the daft new builds which seem to be 40% more than they should be. 

Leverage BTL is not viable.

What seems to be happening is that the to get the 'cheap; BTL L needs to be putting more cash to get the LTV down. A lot - they banks dont want any BTL over 60%.

Anyone with with an old 95% suddenly has to find several 10k per house.

Then theres portfolio LL. Noone wants their business at all.

I would guess that BTL SVR are going up and up, And BTL LTV are going down and down.

 

[Switch625]

Still a lot of denial in those comments on that Torygraph article.

[Tiger1234]

On 16/09/2019 at 09:45, spyguy said:

Thats BS to both those claims.

Im not seeing much in he way of builders doing refurbs - they cannot get the finance.

As far as large scale LL buying. Nope, none.

 

Not large scale but other LLs are buying them to add to their portfolio.

 

[highcontrast]

21 hours ago, Timbuk3 said:

http://propertyindustryeye.com/auction-entries-rise-as-clobbered-buy-to-let-landlords-look-to-sell-their-properties/   

Looks like its starting already.  

 

7 minutes ago, Tiger1234 said:

Not large scale but other LLs are buying them to add to their portfolio.

 

Oh dear Tony the Tiger, looks like the desperate BTL type are pooping themselves judging by your post. Don't worry, denial is the current phase, the next phase is acceptance.

(p.s. I refer you to Timbuk3's post)

Edited September 22, 2019 by highcontrast

[spyguy]

Most suitable thread for this.

Ive posted multiple times about how BTL and other f-witted lending has been moved away from deposit taking, regulated banks and onto the specialist finance companies, who do not draw down from BoE and have to raise all finance via bonds and whatnot.

Loads of different names - non-banks, finance companies. Whatever. They swim in a murky pond and have big teeth.

A 'mortgage' from a non-bank is a very  different beat from a mortgage from a regulated. Most, if nto all lending, will be commercial lending i.e. at your own risk, no help

https://www.ft.com/content/51340b70-6d28-11ea-89df-41bea055720b

UK small lenders are warning that hundreds of thousands of vulnerable customers could become “mortgage prisoners” if the government does not grant wider access to emergency funding schemes to support credit during the coronavirus pandemic.

OMG!!!! Some little old lady with 10m IO BTL portfolio. The bastards!

Why would they become mortgage prisoners? Theyve got a mortgage Dont these 'non-banks' want their customers mortgages anymore??? Maybe they should not have lend to them?

Non-bank, specialist lenders play a key role in providing home loans to three quarters of a million people who cannot borrow from mainstream banks, as well as financing small businesses and providing consumer finance such as point-of-sale credit. However, the sector has so far been excluded from state measures to support lending.

So, they are a charity then, helping disabled, poorly kids, thats sort of stuff????

Lobby groups led by UK Finance, along with several affected firms, have written to regulators warning that without urgent government intervention there was a “high likelihood” of a “severe” impact and a wave of bankruptcies like during the last financial crisis, according to a copy seen by the Financial Times.

Hold on, Surely youve run a credit check and priced the risk?

All these up n coming googles and Apples, struggling for finance.

At least 750,000 UK borrowers have around £82bn of home loans with specialists such as Belmont’s Vida Homeloans, Together, and Blackstone-owned Kensington Mortgages, according to estimates from UK Finance.

Non-bank mortgage lenders tend to cater to customers who are turned down by mainstream banks, such as buy-to-let landlords, people with impaired credit histories, and self-employed and contract workers with unpredictable or irregular income streams.

 

If a large, mainsteam bank doesnt lend to a sector or person, then a small, specialists lender, who make a big fuss about their controls and extra charges for the rsik, should be very careful.

Besides, if their loan books are in trouble they just need to raise the APR toreflect the now obvious extra risk.

Id guess the mix is mainly portfolio BTL.

 

 

 

 

 

 

[Freki]

Thanks for that Spy, "encouraging" for people not swimming in debt ( or actually swimming in cash ;)) 

[hurlerontheditch]

some electrician is on the radio who has a portfolio of 30 properties wanting help as he is "self employed"

 

[hotblack42]

23 minutes ago, hurlerontheditch said:

some electrician is on the radio who has a portfolio of 30 properties wanting help as he is "self employed"

 

Never in the field of human commerce was so much owed, to so many, by a few morons.

[rantnrave]

Draconian tax changes deter BTL landlords

https://propertyindustryeye.com/draconian-tax-changes-deter-btl-landlords/

[msi]

5 minutes ago, rantnrave said:

Draconian tax changes deter BTL landlords

https://propertyindustryeye.com/draconian-tax-changes-deter-btl-landlords/

Boo hoo hoo.  Looks like all those 'lost' houses are still holding value since prices are high.