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Mumsnet Btl Thread

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Quite a good read. Basically BTL expansion will more or less stop. Some may sell. Most holding on.

not sure if it's brutal enough of those holding on.

but prices set at margin should see prices drop 15-20% outside of London.

still not really enough to get a majority of home-owners.

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Comments I skimmed seem sensible enough and balanced. Some sympathy for people that thought they were buying a pension (no victim dance though ;)), some acknowledgement that the housing market needs steps to level the playing field for younger people, and some acceptance that there is no point in trying to do a "Wilsons" anymore. The positive for us on here is that the general tone seems to be that the game for BTL is up.

Edited by dances with sheeple

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The people using BTL to make a bit more money than they can with savings are not really the right target.

Yes they are.

Sweating your older HPI gains to buy and outbid a younger family on another home. Me me me me me.

I've rented for years, and the biggest landlord problems I've had have been from landlords with only one or two properties, so I'm afraid I don't buy the idea that smalltime BTL-ers aren't really the problem. Part of the housing problem is that renting is expensive, insecure and frequently awful, and that can be just as much the case with smaller landlords.

Quite a few 'accidental landlords' on there. Nothing accidental about it. Have some tax.

I don't see how it makes BTL a fools game tbh. We are basic rate tax payers so the changes I assume (I've not yet looked into it properly) wont affect us badly...but even if it did wipe out our monthly profit margin from our two mortgaged BTL's (or even if it cost us money), that's not why we have them.

We have them for the long term, to cash in/use the rental income for our pensions, when the mortgages are paid. I still don't know of any other way that's as effective to save for the future because I wouldn't touch a pension with a bargepole and have no intention of paying into one.

For us, the changes won't make much difference and certainly wouldn't make us want to sell.

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We have ours for the very long term, as in we hope to pass it on to DC and just have the income. We paid cash and ftb weren't interested in our property anyway. We will be hopefully buying one more in a couple of years. Ours has gone up 30% since we bought. I don't think you can go far wrong with property, whatever happens, if you are in it for the long term and not greedy with the rent. Ours was never for a quick buck. We already have pensions, savings, isas, premium bonds, a big enough home etc.

FTBs would snub it, but somehow good enough to pass over to precious dc... dear child?

They have it all, and another home bought for BTL to sweat rental on as well.

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Yes they are.

Sweating your older HPI gains to buy and outbid a younger family on another home. Me me me me me.

Quite a few 'accidental landlords' on there. Nothing accidental about it. Have some tax.

My frequent takeaway from all of this is the fact that the BoE had raised concerns that the BTL mortgage market is not pricing in risk properly, so it represents a clear danger to the national economy over the medium to long term.

And the numpty small time BTL investors simply do not get it. There's no such thing as a free lunch, fact is somebody else was paying for it all along, via effectively nationalised risk which didn't exist for OO hence explaining why OOs weren't in the game anymore.

And now the BTL systemic risk is being neutered in the national interest, it's all feigned stupidity that we get off the amateur landlords, isn't it unfair. Or maybe it isn't feigned.

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Some of the text that Venger's extracted is insane.

These people can't even join points up. It's just unargued assumptions plucked out of thin air.

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Actually, I do feel sorry for them, for all of us.

They made decisions trying to better their situation believing it was a 'free market'. And then it was rigged against them - specifically them mind. Bigger investors pick up the properties at a discount. Osborne gets a few votes, and the farce continues.

Edited by pig

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Actually, I do feel sorry for them, for all of us.

They made decisions trying to better their situation believing it was a 'free market'. And then it was rigged against them - specifically them mind. Bigger investors pick up the properties at a discount. Osborne gets a few votes, and the farce continues.

No, f*ck 'em. BTL is the exact enemy of a 'free market'.

Edited by Cry and Regret

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No, f*ck 'em. BTL is the exact enemy of a 'free market'.

+1

They didn't think they were investing in a 'free market' they thought they were investing in a captured market rigged perpetually in their favour.

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Guest

The problem is any highly leveraged landlord who tries to spend as little as possible on repairs to preserve their profit margin.

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Not sure any thinking went as far as free market or not. They just thought they were clever. Now they can't admit that they weren't so smart.

Have not actually read any plans for how all these pension BTL'ers are going to pay off the loans so that the rent goes to them rather than to service the loan. Perhaps somebody should explain the concept of IO to them.

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Quite a good read. Basically BTL expansion will more or less stop. Some may sell. Most holding on.

not sure if it's brutal enough of those holding on.

but prices set at margin should see prices drop 15-20% outside of London.

still not really enough to get a majority of home-owners.

'The changes haven't affected us massively. Obviously, the costs have increased but not to a punitive standard. Unless I have completely misunderstood.

We have two btl in Greater London.'

There's a whole pile of dumb in the reasoning here.

Of course the changes have not affected you much, they are not in place yet FFS!

They come in next year and then crank up.

Lets take the poster's '2BTL in Gtr London'

Lets assume they are let for 1k each and the mortgage is for a similar amount.

Assuming they are higher rate taxpayer - and living in London with 2 BTLs + a OOO (I guess), would take some earnings.

They will see 1k of there 2k rent income go in tax. Poof!

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'We are selling our last one, atm.

I know BTL is unpopular, but it has allowed middle income people to invest in rental properties.

Now, it will only be those with capital who can afford to buy rental properties, i.e. the very rich, not those who need to borrow.

But who thought this government was interested in social mobility, anyway?'

Seriously? That reads like its written by the drunk in the pub who spends the night arguing with himself.

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I likes mumsnet.

Like life, there's a lot of people who you wonder how in fcksake they manage to live their life without wlking off a cliff.

And there's the odd, sane poster who, clearly, points out the obvious.

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'We are selling our last one, atm.

I know BTL is unpopular, but it has allowed middle income people to invest in rental properties.

Now, it will only be those with capital who can afford to buy rental properties, i.e. the very rich, not those who need to borrow.

But who thought this government was interested in social mobility, anyway?'

Seriously? That reads like its written by the drunk in the pub who spends the night arguing with himself.

I somehow managed to invest in supermarkets and oil companies without either borrowing money or being very rich. Are these jokers really such utter planks that they can't invest in property any other way than thru leveraged magnolia paint purchases?

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it does offer a snap-shot into the phycology.

stopping expansion is a huge benefit as suddenly there will be almost zero demand for property, FTB just cant get a look in with prices 15-30% bid up to BTL levels.

when they do drop 10-15% at a real push i could probably buy a place (i'm about 20% above average wages in my area) but it would be a crappy place that 10 years ago below average incomes could afford (thus areas a bit rough). Thus i probably still wont buy, my saved money is hard graft front gifted from HPI so im not soo easily going to throw it down the drain.

For the conservatives this wont help them, a very small percentage for people like me could become owner through this. But they need volume buyers quickly to reverse the home-ownership crisis, that requires falls to average incomes (which have pretty much been stagnant since 2003).

they probably well know this, they need to not only stop expansion but force BTL for the exit en mass.

Governments would never suddenly say 'buy to let banned'. in no situation they would do that. but they would ban BTL over the course of 4 years, which means a lot of drastic policies pilling up very quickly over those 4 years.

they will know people are stubborn, they will keep cranking up the taxes and laws until huge chunks of society are saying loudly 'GLAD I GOT OUT! BTL IS A MUGS GAME NOW' as soon as BTL becomes a embarrassment at parties instead of bragging rights these people will sell. Sentiment is all powerful here.

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Rubbish! Bailing them out is.

#banHTB #bringbackcapitalism

Are you kidding? A market that wouldn't exist without the government operated land-registry, the state central-bank, the central planning system and hundreds of years of enclosure, land grabs, and violent eviction?

The only difference between Mugabe's land reforms and the establishment of the British land market is a few hundred years of brainwashing.

The slave trade is a free-market, if you don't count the freedom of the slaves.

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A number of the posters on the mumsnet thread are clearly reading the run of policy as being an attempt to cut-off the supply of new buy-to-let investors and, by 2020, drive the more leveraged out of the game. As you would expect, given the aggression of Osborne's policies, people who are looking at the matter dispassionately are all drawing the same conclusion - the BTL game is up.

The likely consequence of taking 20% of effective demand out of the market and introducing a new stream of supply (exiting BTL investors) seems pretty obvious to me, particularly in London and the South East in the market for flats, where BTL demand is over-represented relative to its share of demand in aggregate.

2015_18_fig2.jpg?w=500&h=242

Source: Bank Underground blog - Five facts about buy-to-let

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Comments I skimmed seem sensible enough and balanced. Some sympathy for people that thought they were buying a pension (no victim dance though ;)), some acknowledgement that the housing market needs steps to level the playing field for younger people, and some acceptance that there is no point in trying to do a "Wilsons" anymore. The positive for us on here is that the general tone seems to be that the game for BTL is up.

I suggest, probably too late for many, reading and learning this:

https://en.wikipedia.org/wiki/Arithmetic

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Are you kidding? A market that wouldn't exist without the government operated land-registry, the state central-bank, the central planning system and hundreds of years of enclosure, land grabs, and violent eviction?

The only difference between Mugabe's land reforms and the establishment of the British land market is a few hundred years of brainwashing.

The slave trade is a free-market, if you don't count the freedom of the slaves.

:lol:

Brilliant summary

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Rubbish! Bailing them out is.

#banHTB #bringbackcapitalism

They've already been bailed out. In some respects reduced tax breaks and increased taxation now could be seen as the Government requiring BTL in aggregate to pay the bail out back, thus turning it into more of a temporary loan.

BTL was back at the expense of taxpayers and savers, as the ability of banks to service this relatively new market was undoubtedly saved by the British government's bank bailout. BTL only formally started in 1996. Yet, remarkably, in 2010 I established that 56 per cent of BTL mortgages ever lent in Britain were sitting on the books of bailed-out banks.

Roughly half of the outstanding BTL mortgage stock is being nursed by the state in some form. At the time of the bailout, Bradford & Bingley and Northern Rock had, between them, BTL mortgage liabilities worth £30 billion, all of which came into government hands. I subsequently found out - from figures that the mortgage industry did not want released - that about 65 per cent of BTL lending in the year after the banking bust was coming from banks that had been bailed out. In the absense of the bailout, little of this business would have been done, and the existing BTL mortgages would have been dealt with far more harshly. Buy-to-let had become a quasi-nationalised industry.

- Faisal Islam, The Default Line

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