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Are Btl Still Buying Thread

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Well around my way it looks like more are trying to sell i think it would be interesting to see who`s buying, BTL or owner occupiers,

I believe sentiment is the major driving force when it comes to BTL as the sums have not made any sense for well over a decade for the typical IO Buy Refinance Buy Model yet there has been no shortage of greater fools Hence this is the reason for me seeing sentiment as a/the major driving force ,as maths and common sense has clearly left the room

As there`s now a way of determining whether a property has been bought by BTL from2013 onwards via https://houseprices.io/ it`s never going to produce 100% reliable figures, as it captures transactions that may have been bought at auction /bought via BTL mortgage/ bought via a company in the same dataset and there's no way of determining cash purchases for BTL (would imagine very small number )

Any of the above transactions are highlighted in Yellow/Cream in the chosen post code search on the site (apart from cash)

From what i`m seeing bought via a company seems to be mostly comercial some of which could also have mixed use so could be BTL financed

Via auction is a hard one as it seems the common method for BTL to purchase this way is via bridging finance initially then remortgage to BTL ,would this then be recorded via the Land registry ?

I know it`s early days as there are probably only 2-3 complete months of data since the BTL tax changes and even less since the change to SDLT

So what are you seeing in your search areas ?

Edited by long time lurking

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I went to look at a house yesterday (West Mids).

Conversation went something like this:

Me: Not so many listings going on at this time of year, not surprising.

Her: On the contrary. Places are being sold even before they're put on the website.

Me: So who's buying?

Her: All sorts, but landlords are trying to beat the 3% stamp duty, rushing things through.

Well, she's an EA, so there's a good chance she's making it up. But if true, I won't be buying until after April at the very least.

Edited by Eddie_George

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I was walking around Headington (Oxford) yesterday when I saw a sign outside one of the EAs -

'Are you looking for a buy to let or a second home?? Hurry, do it before April and save!'

I can't think it's the only one.

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My guess is that "portfolio landlords" will carry on buying, but through limited companies. As I understand it, in that situation mortgage interest will be treated as a deductible expense as usual, and the stamp duty problem won't arise. The Ferguss and Judiths of this world will just become Fergus and Judith Ltd.

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Well that's the most tax efficient way to do it certainly but all of a sudden these 'investors' will get to encounter the joy that is corporate lending, and all of a sudden I suspect the sums won't add up.

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My guess is that "portfolio landlords" will carry on buying, but through limited companies. As I understand it, in that situation mortgage interest will be treated as a deductible expense as usual, and the stamp duty problem won't arise. The Ferguss and Judiths of this world will just become Fergus and Judith Ltd.

Well those two options are not really viable as above post states commercial lending is much tighter and carries a premium (might aswell suck up the removal of tax relief)

Large portfolios would also incur SDLT CGT when transferring so that option is out for the highly leveraged and this is well known

The question was what are you seeing on the LR around your way via https://houseprices.io/ ....i suppose your post goes some way to backing up my theory of sentiment is the main driving force behind BTL though

Edited by long time lurking

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I would think that some of the potential "pension" BtLers, with their newly released £30K(average) pension pots, will be open to the suggestion that buying before April will save them 3%. I would also expect a big push to attract these people as it often takes two or three months to set-up the mortgage and complete.

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The auction houses are in a right fluster about it.

Auctions in February (for the Manchester area)

http://www.auctionhouse.uk.net/manchester

2nd Feb

Edward Mellor

Wednesday 3rd February

http://edwardmellor.co.uk/auctions/venues-and-dates/

Seems to be mostly BTL on the Auctionhouse link ,with a good few with tenants in place

It`s the same dow here concerning sellers ,but what matters is who will be buying looking on houseprices.io there don`t look like there`s been that much bought via BTL finace in recent times in a lot of those areas

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I would think that some of the potential "pension" BtLers, with their newly released £30K(average) pension pots, will be open to the suggestion that buying before April will save them 3%. I would also expect a big push to attract these people as it often takes two or three months to set-up the mortgage and complete.

That's part of the point of this thread ,a very unscientific way of trying to determine how many greater fools are left out there

For the demographic you describe sentiment still seems to be high when it comes to BTL but are they actually buying

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Well that's the most tax efficient way to do it certainly but all of a sudden these 'investors' will get to encounter the joy that is corporate lending, and all of a sudden I suspect the sums won't add up.

Applications and products available for limited companies are already on the rise:

http://www.mortgagesforbusiness.co.uk/news-insight/2016/january/ltd-co-btl-transactions-rose-sharply-in-q4-2015/

"The number of products for limited company applicants increased by nearly 50% to an average of 147 in H2 up from 99 in H1 2015."

The average mortgage rate is 0.7% higher than for individuals.

I agree that this won't be attractive for landlords holding onto existing property, but it may wellbe attractive to new investors wanting to hoover up property coming onto the market. That seems to be what the Treasury is encouraging - the new tax rules greatly favour limited companies.

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I agree that this won't be attractive for landlords holding onto existing property, but it may wellbe attractive to new investors wanting to hoover up property coming onto the market. That seems to be what the Treasury is encouraging - the new tax rules greatly favour limited companies.

65243, what are your thoughts on the BCBS risk-weights? Surely the transactions you describe only make sense on an interest-only basis and thus, as things stand, look to fall into the punitive 150% RW ADC category?

The new rules don't favour limited companies, they leave the situation for limited companies unchanged. Making Novak Djokovic play with a wooden racket doesn't make Andy Murray better at tennis.

The BTL mugs believe armies of incorporated landlords will be snapping up their cast-offs, but they believe this not based on a sound appraisal of the facts but because they don't like the alternative, which is having to sell to people who are paying with repayment mortgages serviced with earnings, i.e. owner-occupiers.

I bet that the number of leveraged portfolio landlords who assembled those portfolios after 2008 is a tiny proportion of the population of leveraged portfolio landlords. These f**king clowns got a get out of jail free card between 2008-2015, a chance to deleverage. That a number of the morons doubled-down is both depressing and hilarious in equal measure. These cretins are Forrest Gump without the luck or the folksy charm.

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Applications and products available for limited companies are already on the rise:

http://www.mortgagesforbusiness.co.uk/news-insight/2016/january/ltd-co-btl-transactions-rose-sharply-in-q4-2015/

"The number of products for limited company applicants increased by nearly 50% to an average of 147 in H2 up from 99 in H1 2015."

The average mortgage rate is 0.7% higher than for individuals.

I agree that this won't be attractive for landlords holding onto existing property, but it may wellbe attractive to new investors wanting to hoover up property coming onto the market. That seems to be what the Treasury is encouraging - the new tax rules greatly favour limited companies.

Er there are a lot more taxes and expenses running a company.

I dont beliive the 0.7% is realistic.

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Hi both,

I've no idea of the answers to your questions. However, it's happening now before any tax changes have come into effect at all, and at a time when most buy-to-let investors don't even know that the changes have happened or may affect them. A rise in completions by limited companies from 17% to 24% in two months is pretty significant. And apparently (if you believe the article) 38% of all applications are now via limited company.

The taxation of a company is not necessarily higher than an individual, but it's certainly a lot more complicated, and needs proper professional advice, so it would only be sensible on a larger scale than one or two flats. Again, I suspect this is the direction in which the Treasury wants to send the rental market.

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I bet that the number of leveraged portfolio landlords who assembled those portfolios after 2008 is a tiny proportion of the population of leveraged portfolio landlords. These f**king clowns got a get out of jail free card between 2008-2015, a chance to deleverage. That a number of the morons doubled-down is both depressing and hilarious in equal measure. These cretins are Forrest Gump without the luck or the folksy charm.

The long and the short of it

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http://www.propertyindustryeye.com/tax-firm-warns-of-risks-as-scramble-to-buy-second-homes-and-buy-to-let-properties-heats-up/

A number of estate agents have reported a rise in the usual number of buy-to-let purchasers, who wanting to do deals that complete before the 3% Stamp Duty surcharge comes into force on April 1.

Jeremy Leaf, in north London, said: “On the ground, we have already noticed investors keen to buy before the middle of February so that they can complete by April.

“Because of the tight time frame, there is more risk in buying a property in a chain because of the chance of fall-through.

“Inevitably, we have seen examples of vendors taking advantage of landlords’ desperation to complete before the April deadline, with some being greedy on the price.”

oh those poor poor landlords..

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Er there are a lot more taxes and expenses running a company.

I dont beliive the 0.7% is realistic.

In December 2015 products for limited companies were, on average, c.0.7% points more costly than the market as a whole, a marginal reduction compared to July (c.0.8%).

Source

The market as a whole includes the products for limited companies, so comparing the figures in this way allows them to skew the overall average upwards and downplay the gap to individual BTL.

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Well around my way it looks like more are trying to sell i think it would be interesting to see who`s buying, BTL or owner occupiers,

I believe sentiment is the major driving force when it comes to BTL as the sums have not made any sense for well over a decade for the typical IO Buy Refinance Buy Model yet there has been no shortage of greater fools Hence this is the reason for me seeing sentiment as a/the major driving force ,as maths and common sense has clearly left the room

As there`s now a way of determining whether a property has been bought by BTL from2013 onwards via https://houseprices.io/ it`s never going to produce 100% reliable figures, as it captures transactions that may have been bought at auction /bought via BTL mortgage/ bought via a company in the same dataset and there's no way of determining cash purchases for BTL (would imagine very small number )

Any of the above transactions are highlighted in Yellow/Cream in the chosen post code search on the site (apart from cash)

From what i`m seeing bought via a company seems to be mostly comercial some of which could also have mixed use so could be BTL financed

Via auction is a hard one as it seems the common method for BTL to purchase this way is via bridging finance initially then remortgage to BTL ,would this then be recorded via the Land registry ?

I know it`s early days as there are probably only 2-3 complete months of data since the BTL tax changes and even less since the change to SDLT

So what are you seeing in your search areas ?

Excellent development on the website - but as there are now several different colours and meanings, perhaps a key on the page is in order? :)

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Excellent development on the website - but as there are now several different colours and meanings, perhaps a key on the page is in order? :)

Evictee on here is the person to ask ..it`s nowt to do with me but i would agree a key would be good

Edited by long time lurking

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I've no idea of the answers to your questions.

Thanks. You may want to read up on that. It will have a massive effect on the mortgage rates paid by any company operating rental property financed interest-only. The BCBS risk-weights look as if they've been drafted to make that kind of 'business' impossible, being as it is just a leveraged punt on shit houses.

It's now increasingly clear that unincorporated mug BTL's role in things post-2008 was to buy a little time for bank recapitalisation, spread out the risks and foam the runway with some owner-occupier equity ahead of the inevitable next leg down, (thanks Connie, your endeavours are appreciated). This kind of incorporated BTL looks like a rinse and repeat of the same game. It forms part of a truly great human endeavour. Ever since 2008 various BTL idiots have fought tirelessly for the crown of Biggest Ever BTL Idiot. Mug punters incorporating and loading up with interest-only loans are, for the time being, my top tip for the title.

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Thanks. You may want to read up on that. It will have a massive effect on the mortgage rates paid by any company operating rental property financed interest-only. The BCBS risk-weights look as if they've been drafted to make that kind of 'business' impossible, being as it is just a leveraged punt on shit houses.

It's now increasingly clear that unincorporated mug BTL's role in things post-2008 was to buy a little time for bank recapitalisation, spread out the risks and foam the runway with some owner-occupier equity ahead of the inevitable next leg down, (thanks Connie, your endeavours are appreciated). This kind of incorporated BTL looks like a rinse and repeat of the same game. It forms part of a truly great human endeavour. Ever since 2008 various BTL idiots have fought tirelessly for the crown of Biggest Ever BTL Idiot. Mug punters incorporating and loading up with interest-only loans are, for the time being, my top tip for the title.

Worth noting that all Companies have to be registered so finding and taxing them is far easier that a "sole trader" style landlord.

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