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fru-gal

Moneyweek Article About The Btl Changes

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http://moneyweek.com/autumn-statement-buy-to-let-landlords/

Some interesting analysis. A quote from the article;

A party’s attitude to property is also a fantastic branding tool. For Labour, the rise of the amateur landlord and constantly rising house prices were emblems that the party had changed. You too could aspire to be a property millionaire one day, and Labour was totally ‘cool Britannia’ with that.

Now the Tories are using buy-to-let landlords to show that they’ve changed too. They’re not the party that protects vested interests and the property-hoarding classes. They’re not about entrenching inequality. They’re all about opportunity for all. Hard-working first-time buyers vs predatory rentiers? The Tories are with the strivers every step of the way.

Better yet – who else are these disenfranchised landlords going to vote for? Anyone think they’ll get a fairer hearing from Jeremy Corbyn, and his wee red book?

Edited by fru-gal

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Interesting.

Labour, despite it origins, 1998+ was the party of the slum lord, borrowing from bent banks, to house a client state.

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I agree with the article - the sentiment is far more important than the 3%.


Any sensible person can see that the writing is on the wall for amateur landlords here. I wouldn’t be rushing to bring forward my buy-to-let purchases – I’d be looking for the exit before the next Budget rolls around.

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The Tories aren't about entrenching inequality???? And it's opportunity for the select few. However BTL is a huge drag on the economy, but when prices were rising rapidly the allure of easy money was too hard to resist.

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I agree as well..

I am still a little cautious after all that has gone on this past decade, but the Tories really seem to be now gunning for the BTL vermin..

We all know that a lot of UK property is in the hands of people who do not give s*** about property as a means of shelter, it is just hard greedy economics for these people. I have wondered for a while now what percentage of them running for the exit to grab what profit they can would bring on the snowball effect and a magical downward trend.

It takes a bubble to remain inflated for everyone holding faith, I cannot see these people holding true to the God of BTL in order to save new entrants, if many of them can get out with a good profit and f*** the rest they will do it. Don't ask me why it is just a feeling, but my finger in the wind style tells me about 10% to 15% will cause a jitters then a panic to set in.

In my opinon, the Tories have (reluctantly) wised up to the fact that demographics is not on the side of higher house prices and future votes will come from the priced out who not only have the advantage of time on their side but also take advantage of the power of the internet in order to mobilise and change opinion (see Corbyn etc). Once the boomers and pensioners have disappeared then house prices will be reliant on (falling) wages in an environment where technology is usurping jobs and a large percentage of jobs are already very low paid and reliant on supplementary benefits. The Tories are going to have to be pragmatic about HPI. Either we have never ending HPI and houses costing £1 million in order to maintain the illusion of wealth but with a benefit bill that will skyrocket (because of housing benefits for all the priced out) or they opt for cheaper housing and a move to putting money into creating real jobs which at least can create technologies which are pro-social rather than antisocial and a drain on the UK's finances.

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In my opinon, the Tories have (reluctantly) wised up to the fact that demographics is not on the side of higher house prices and future votes will come from the priced out who not only have the advantage of time on their side but also take advantage of the power of the internet in order to mobilise and change opinion (see Corbyn etc). Once the boomers and pensioners have disappeared then house prices will be reliant on (falling) wages in an environment where technology is usurping jobs and a large percentage of jobs are already very low paid and reliant on supplementary benefits. The Tories are going to have to be pragmatic about HPI. Either we have never ending HPI and houses costing £1 million in order to maintain the illusion of wealth but with a benefit bill that will skyrocket (because of housing benefits for all the priced out) or they opt for cheaper housing and a move to putting money into creating real jobs which at least can create technologies which are pro-social rather than antisocial and a drain on the UK's finances.

Its so such the never ending HPI. Its the fact the UK has rising debt on a non-productive asset, taking more money out of the economy and hobbling business.

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I agree with the article - the sentiment is far more important than the 3%.

Talking of sentiment - has anyone been in a London taxi recently? I'd like to know what the cabbies are saying - they can have a good indication of general feelings of the public

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These tax changes dont hit current BTLers.

The changes to tax and stamp duty hit the leveraged and any new entrants.They entrench the benefit for the people who own property already outright.My very astute friend who was a Labour council leader in his day say's Osborne is looking after "old money,rentier families who have done it for 500 years" by hitting the "new money".Handouts from the government by housing benefit etc are only supposed to end up with the rich,not some lower middle class person who might use it to stop working.

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Let's not forget Tony Bliar and his family now have 37 (I think it is) properties between them so he is the ultimate "cool Britannia" NuLiebour property millionaire referred to in the Moneyweek article. His time in politics was just to get him into the upper echelons of society and become a rentier.

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These tax changes dont hit current BTLers.

The changes to tax and stamp duty hit the leveraged and any new entrants.They entrench the benefit for the people who own property already outright.My very astute friend who was a Labour council leader in his day say's Osborne is looking after "old money,rentier families who have done it for 500 years" by hitting the "new money".Handouts from the government by housing benefit etc are only supposed to end up with the rich,not some lower middle class person who might use it to stop working.

We may get a bit of a surge into BTL pre April 2016 (hope not), but it does hit the current BTLers.

Prices are set at the margin. Belt and braces tax changes. It is more likely to leave owners stranded for selling to other BTL buyers/second home owners... meaning some at the margin that much more likely to accept lower offers, bringing wider house values down.

The Budget day tax changes do hit the leveraged and new entrants..... you've got it wrong imo. It's efficiency functioning on multiple levels and in multiple dimensions.

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I wonder if Osborne's cunning plan is to get loads of stupid BTLers to pile in now and then in the budget up CGT or bring in some sort of cruel and Hitleresque extra levy on rental profits?

Edited by fru-gal

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I wonder if Osborne's cunning plan is to get loads of stupid BTLers to pile in now and then in the budget up CGT or bring in some sort of cruel and Hitleresque extra levy on rental profits?

No I think the plan is for everyone to have a mortgage and be a proper debt slave.

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We may get a bit of a surge into BTL pre April 2016 (hope not), but it does hit the current BTLers.

Prices are set at the margin. Belt and braces tax changes. It is more likely to leave owners stranded for selling to other BTL buyers/second home owners... meaning some at the margin that much more likely to accept lower offers, bringing wider house values down.

The Budget day tax changes do hit the leveraged and new entrants..... you've got it wrong imo. It's efficiency functioning on multiple levels and in multiple dimensions.

+1

The SDLT surcharge hits any BTLers looking to sell and any landlords (leveraged or otherwise) looking to buy or to move their main residence.

Coupled with the HTB extension for new builds it's likely to reduce demand in the secondhand housing market just as many BTLers will be finding that the changes to how their finance costs are treated for tax purposes mean that they need to sell their existing rental properties.

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Talking of sentiment - has anyone been in a London taxi recently? I'd like to know what the cabbies are saying - they can have a good indication of general feelings of the public

Heh, yes, but I was in no fit state to hold a conversation on any topic after spending 9 hours in some pub being bought drinks faster than I could drink them, and then arriving at the train station to realise I had left my bag with laptop in it at the pub.

Besides, it was on the day of the autumn statememt so I, and probably he, was unaware of what had been said.

I found the pub and my laptop though.

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+1

The SDLT surcharge hits any BTLers looking to sell and any landlords (leveraged or otherwise) looking to buy or to move their main residence.

Coupled with the HTB extension for new builds it's likely to reduce demand in the secondhand housing market just as many BTLers will be finding that the changes to how their finance costs are treated for tax purposes mean that they need to sell their existing rental properties.

I've been trying to work out some of the different scenarios with that, and I doubt I've thought of them all. Are we sure that applies? Would thought it would do.

One downside is it may prevent a top-of-the-layer cake home-owner (with a BTL or for example, a coastal second home) from downsizing from their main home (putting it on the market), for they would have to pay higher rate of stamp duty on the downsize house (if they already own a second home or BTL).

They have some thinking to do. Added uncertainties. No sympathy from me for downsizers cashing in loads of pumped up equity, so easily afford the higher stamp duty.

However it all goes into the mix. And the market moves on without them.

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I've been trying to work out some of the different scenarios with that, and I doubt I've thought of them all. Are we sure that applies? Would thought it would do.

One downside is it may prevent a top-of-the-layer cake home-owner (with a BTL or for example, a coastal second home) from downsizing from their main home (putting it on the market), for they would have to pay higher rate of stamp duty on the downsize house (if they already own a second home or BTL).

They have some thinking to do. Added uncertainties. No sympathy from me for downsizers cashing in loads of pumped up equity, so easily afford the higher stamp duty.

However it all goes into the mix. And the market moves on without them.

It seems that the SDLT surchage is on the purchase of any "additional" property and so yes, from the information we have right now, I think it applies.

Hopefully any prospective downsizers who have only the one other property will be encouraged by the prospect of additional taxation to sell it before downsizing and so increase the supply to market rather than decrease it.

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Talking of sentiment - has anyone been in a London taxi recently? I'd like to know what the cabbies are saying - they can have a good indication of general feelings of the public

I s*** you not, I work with a trader who takes a seemingly pointless taxi trip now and again in the City for that very reason: the cabbies could make a fortune front-running all the boozed up cityboys who give them an ear-full about the markets! Any time I've taken a cab recently they've all told me the same thing: "it's absolutely silly, the prices, mate, it can't go on forever". This was a few months ago however so might have to take a 'random taxi' at some point in a few months myself!

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No I think the plan is for everyone to have a mortgage and be a proper debt slave.

I think this comment is pretty near the money on this question.

The Tories are the party of property and property owners. I don't think that is going to change. What they realise is that for their political interests to flourish in a Parliamentary democracy a substantial proportion of the population must be vested in property either as outright owners or purchasers tied to a mortgage. Renters have no skin in that game and therefore no reason to vote for a party that represents the propertied class. In that respect BTL which increases the number of renters nationally and reduces the number of owner occupiers ironically represents a very real long term threat to the party of property. The Tories like all UK political parties spend a lot of time analysing long term voting trends and they will have noticed that in the last General Election that one of the areas where their opponents did best was London where the portion of the population renting was the highest at nearly 51%. With the ratio of renters to home owners among the general population rising to nearly 40% there's is a real danger to the Tory party that by 2025 renters will have the political voting power to determine the UKs government policies.

http://www.theguardian.com/money/2014/oct/30/generation-rent-will-grow-by-2021

Perversely by limiting the opportunity of new people becoming landlords the Conservatives may be protecting the interests of those who already dominate that market.

Edited by stormymonday_2011

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I think this comment is pretty near the money on this question.

The Tories are the party of property and property owners. I don't think that is going to change. What they realise is that for their political interests to flourish in a Parliamentary democracy a substantial proportion of the population must be vested in property either as outright owners or purchasers tied to a mortgage. Renters have no skin in that game and therefore no reason to vote for a party that represents the propertied class. In that respect BTL which increases the number of renters nationally and reduces the number of owner occupiers ironically represents a very real long term threat to the party of property. The Tories like all UK political parties spend a lot of time analysing long term voting trends and they will have noticed that in the last General Election that one of the areas where their opponents did best was London where the portion of the population renting was the highest at nearly 51%. With the ratio of renters to home owners among the general population rising to nearly 40% there's is a real danger to the Tory party that by 2025 renters will have the political voting power to determine the UKs government policies.

http://www.theguardian.com/money/2014/oct/30/generation-rent-will-grow-by-2021

Perversely by limiting the opportunity of new people becoming landlords the Conservatives may be protecting the interests of those who already dominate that market.

They are for homeownership, and of bankers/economy too.

Not everything goes to protect HPI of owners, as we will discover. If it's not hurting it's not working, and elected with good majority into a deep hpc of 1992.

Sometimes the system as a whole is led to change - regardless of what HPI Ego freaks think about having HPI protected.

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