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Autumn Statement 2015

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https://www.landlordtoday.co.uk/breaking-news/2015/11/anger-from-landlords-at-osbornes-move-to-impose-extra-3-buy-to-let-stamp-duty

Anger from landlords at Osborne’s move to impose extra 3% buy to let stamp duty

The chief executive of the National Landlords Association, Richard Lambert, says: “The Chancellor’s political intention is crystal clear; he wants to choke off future investment in private properties to rent. If it’s the Chancellor’s intention to completely eradicate buy to let in the UK then it’s a mystery to us why he doesn’t just come out and say so”.

As a result of Osborne's July Budget, buy to let landlords are already due to get a lower rate of tax relief on mortgage payments, and a less generous interpretation of the annual wear and tear allowance.

“The buy to let investor should not be blamed for house price rises, rather, this is down to the chronic shortage of housebuilding in this country which is compounded by population growth. We would therefore advise caution against penalising this group of investors when actually other policy areas hold the key to unlock the solution” says Stuart Law, chief executive of Assetz for Investors, a pro-buy to let organisation.

Edited by SarahBell

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Ah you're right - disadvantaged Areas Relief will be abolished for transactions with an effective date on or after 6 April 2013.

But currently 0 under £125k - will this now be 3%?

I really hope so.

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You hope all you want. Whether or not rates rise next month is immaterial.

They'll come straight back down (if they ever rise) and frates will be low for as long as you can imagine.

Well, we will see soon enough probably. Best bet for a debt re-set and rates up is the break-up of the Eurozone, back to it`s original sovereign states. I think that is a realistic possibility actually.

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Haven't had time to read the thread but just saw a headline on Sky News that he is increasing stamp duty for BLTs by 3% above residential?

As someone mentioned it seems hard to police - buy a property, live in it for a while, switch to BTL mortgage then rent it out. Still ,not complaining about the sentiment. I guess BTLers can expect a regular drubbing at every budget now.

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I think the 3% stamp duty rise is quite significant, because the effect will be leveraged. If we assume (almost certainly correctly) that empire-building LLs use all of their available capital as a deposit when buying more properties, then the extra 3% of the purchase price that they need to put aside for SD will translate to 12% of the property price, assuming 75% LTV (i.e. x 4). That's a fair whack and will reduce both the amount they can pay and the speed at which they can expand (if indeed any are stupid enough to still be doing so).

We saw exactly the same thing, in reverse, in Australia with the first home buyers grants - these were immediately leveraged up and translated almost perfectly into price increases of approximately 10x the loan amount (the rentier won, of course).

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Asking prices maybe, but overall sales volumes will just flatline? Only thing that can get the market moving is a price crash.

In my area of London most properties are going under offer very quickly still (especially strange for winter) and prices rising steadily. These properties are 800-2m. The ones at close to £2m are sticking for longer.

I spoke to a friend who knows an agent who sells a lot of £2m+ houses in London however and apparently "business is slow - no one wants to pay the high stamp duty on £2m+ houses".

Volumes are dropping though as you say. East London was always behind the rest of the market, hence the reason it's "still going" here IMO.

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https://www.landlordtoday.co.uk/breaking-news/2015/11/anger-from-landlords-at-osbornes-move-to-impose-extra-3-buy-to-let-stamp-duty

Anger from landlords at Osborne’s move to impose extra 3% buy to let stamp duty

The chief executive of the National Landlords Association, Richard Lambert, says: “The Chancellor’s political intention is crystal clear; he wants to choke off future investment in private properties to rent. If it’s the Chancellor’s intention to completely eradicate buy to let in the UK then it’s a mystery to us why he doesn’t just come out and say so”.

As a result of Osborne's July Budget, buy to let landlords are already due to get a lower rate of tax relief on mortgage payments, and a less generous interpretation of the annual wear and tear allowance.

“The buy to let investor should not be blamed for house price rises, rather, this is down to the chronic shortage of housebuilding in this country which is compounded by population growth. We would therefore advise caution against penalising this group of investors when actually other policy areas hold the key to unlock the solution” says Stuart Law, chief executive of Assetz for Investors, a pro-buy to let organisation.

Still banging on with the "shortage" mantra, it was a credit fuelled bubble, nothing more nothing less.

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“The Chancellor’s political intention is crystal clear; he wants to choke off future investment in private properties to rent. If it’s the Chancellor’s intention to completely eradicate buy to let in the UK then it’s a mystery to us why he doesn’t just come out and say so”.

I think he has, more or less.

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Can anyone confirm if my calculations are correct (note I am crap at Maths!);

At present, stamp duty on a £500k home would be £15k. With the new changes, a BTLer/second home owner would pay £30k. Is that right, assuming the 3% gets added on to all bands, including the current nil rate band?

That sounds correct.

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Devolution
2.140 The UK government is committed to implement the Smith Commission Agreement in
full. As part of the ongoing implementation of the Scotland Act 2012 Stamp Duty Land Tax and
Landfill Tax were devolved in Scotland from April 2015. The Scottish Rate of Income Tax is due to
be commenced in April 2016.
2.141 The Wales Act 2014 devolves Stamp Duty Land Tax and Landfill Tax to the Welsh
Assembly, and creates new Welsh Rates of Income Tax. The government will legislate to remove
the requirement for the Welsh Assembly to hold a referendum in order to implement the Welsh
Rates of Income Tax to reflect the change in the debate in Wales.

So Wales and Scotland can change theirs?

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Can anyone confirm if my calculations are correct (note I am crap at Maths!);

At present, stamp duty on a £500k home would be £15k. With the new changes, a BTLer/second home owner would pay £30k. Is that right, assuming the 3% gets added on to all bands, including the current nil rate band?

That is my understanding.

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3.70 Stamp duty land tax: additional properties – Higher rates of SDLT will be charged
on purchases of additional residential properties (above £40,000), such as buy to let properties
and second homes, from 1 April 2016
. The higher rates will be 3 percentage points above the
current SDLT rates. The higher rates will not apply to purchases of caravans, mobile homes or
houseboats, or to corporates or funds making significant investments in residential property
given the role of this investment in supporting the government’s housing agenda. The
government will consult on the policy detail, including on whether an exemption for corporates
and funds owning more than 15 residential properties is appropriate. The government will use
some of the additional tax collected to provide £60 million for communities in England where
the impact of second homes is particularly acute. (5)
3.71 Stamp Duty Land Tax: application to certain authorised property funds – The
government will introduce a seeding relief for Property Authorised Investment Funds (PAIFs)
and Co-ownership Authorised Contractual Schemes (CoACSs) and make changes to the SDLT
treatment of CoACSs investing in property so that SDLT does not arise on the transactions in
units. There will be a defined seeding period of 18 months, a 3 year clawback mechanism
and a portfolio test of 100 residential properties and £100 million value or 10 non-residential
properties and £100 million value. These changes will take effect from the date Finance Bill 2016
receives Royal Assent. (Finance Bill 2016)

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did I just read that right.

the free market tories will guarantee 40% losses in London, with help to banks scheme

this is criminal.

Edited by TheCountOfNowhere

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I foresee one of Jezza's questions at PMQ's next week.

Nicola from Edinborough wants to know where all the North Sea oil has gone.

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“The buy to let investor should not be blamed for house price rises, rather, this is down to the chronic shortage of housebuilding in this country which is compounded by population growth. We would therefore advise caution against penalising this group of investors when actually other policy areas hold the key to unlock the solution” says Stuart Law, chief executive of Assetz for Investors, a pro-buy to let organisation.

Stuart Law = Upsetz

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Overall I think it's more HPI negative than positive.

Equity loans is just new builds obviously to bribe builders to build.

They will still be MMR constrained so its not adding to demand its bringing it forward.

BTL stamp duty is a big negative for London.

New builds supply in London is what 20k pa? Nothing in a city of 8 million people.

Any gain these chumps get from the internet free loan they will lose when they sell the new build slave boxes.

Overall it looks okay to me also, if it's just newbuilds.

I caught some of the after-talk in the car; seemed to be opposition was needling Osborne that loads of HTB2 budget (debt) not been taken up yet. You can't drag the HTB buyers into the bank, although you can certainly get hpcers making up excuses for those who decide to race into it, pay lunatic prices and outbid others; 'They just wanted a home'.

BTL and second home stamp duty hike seems pretty impressive, although I've not had time to examine any detail.

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https://www.landlordtoday.co.uk/breaking-news/2015/11/anger-from-landlords-at-osbornes-move-to-impose-extra-3-buy-to-let-stamp-duty

Anger from landlords at Osborne’s move to impose extra 3% buy to let stamp duty

The chief executive of the National Landlords Association, Richard Lambert,......

IS A C N T*

[* A Councillor for the Charity for a Nation of Tenants......]

Edited by eric pebble

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Overall it looks okay to me also, if it's just newbuilds.

I caught some of the after-talk in the car; seemed to be opposition was needling Osborne that loads of HTB2 budget (debt) not been taken up yet. You can't drag the HTB buyers into the bank, although you can certainly get hpcers making up excuses for those who decide to race into it, pay lunatic prices and outbid others; 'They just wanted a home'.

BTL and second home stamp duty hike seems pretty impressive, although I've not had time to examine any detail.

The practice that you have seen time and again in your searches, whereby 250k houses are sold then appear 'to let' shortly after, could be pretty much instantly torpedoed in April if the detail of the SDLT changes is understood. Looks like the purchaser of a 250k house will face a 10k stamp duty bill, if the rules are applied as suggested.

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  • 396 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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