Jump to content
House Price Crash Forum
Sign in to follow this  
Bruce Banner

Landlords Rushing To Beat Stamp Duty Hike Send Mortgages Up 59%

Recommended Posts

http://www.thisismoney.co.uk/money/buytolet/article-3551356/Buy-let-landlords-rushing-beat-stamp-duty-hike-send-mortgages-59.html

A frantic rush by landlords and second home buyers to beat the new stamp duty deadline saw mortgage lending in March rocket 59 per cent higher than a year ago.

The Council of Mortgage Lenders said it had seen the biggest stamp duty distortion of the property market ever, as buy-to-let purchasers stormed the market. A total of £25.7billion in mortgages were dished out last month - 43 per cent more than February when lending totalled £18billion.

While the figures only reveal gross lending with no detail of what mortgages were for, lenders say the huge jump was mainly down to buy-to-let property investors attempting to beat the new three per cent stamp duty surcharge on additional homes.

Edited by Bruce Banner

Share this post


Link to post
Share on other sites

So landlords are out of the market now? To keep the pyramid going FTBs will be crucial. With affordability at it's lowest what would the next move be? More HTB? HPC?

Share this post


Link to post
Share on other sites

I just cannot understand why on earth all these people would ...

1) borrow to go into a business as risky as BTL.

2) Would rush to buy just to beat a 3% tax. Surely if they waited for the buying rush to die down, they could reduce the price they paid for the property, by more than the 3% tax they would have to pay?

Share this post


Link to post
Share on other sites

I just cannot understand why on earth all these people would ...

1) borrow to go into a business as risky as BTL.

2) Would rush to buy just to beat a 3% tax. Surely if they waited for the buying rush to die down, they could reduce the price they paid for the property, by more than the 3% tax they would have to pay?

I assume the smart money who have worked out how to avoid the forthcoming changes and increased stamp duty will do just that

Share this post


Link to post
Share on other sites

Id say the headline is wrong.

Id guess it was mainly people buying 2nd homes that were rushing.

The time taken to get a BTL means very few would have been able to turn around between the changes being announced and a purchase completing.

I would guessm ost buyers, be they 2nd homers or BTLer, will regret rushing in. Such is life.

Share this post


Link to post
Share on other sites

moonriver, on 21 Apr 2016 - 4:45 PM, said:snapback.png

I just cannot understand why on earth all these people would ...

1) borrow to go into a business as risky as BTL.

2) Would rush to buy just to beat a 3% tax.

This issue is possibly related to financial advice given by unqualified financial advisors, aka estate agents.

There's a huge amount of regulation facing anyone who wants to earn a salary through this activity, and generally for good reason. Estate agents bypass all of it, with their advice invariably being partial and self-interested.

Almost nobody goes to a mortgage provider without having received financial advice from an estate agent, and those who do generally aren't provided with impartial advice to clarify what they previously received.

If an estate agent and a bank were shown to be cooperating on this, it could and should result in significant consequences for both.

Share this post


Link to post
Share on other sites

So landlords are out of the market now? To keep the pyramid going FTBs will be crucial. With affordability at it's lowest what would the next move be? More HTB? HPC?

How about turning pensions into ISAs? Life in the old dogs yet!

http://www.thisismoney.co.uk/money/pensions/article-3551559/Baroness-Altmann-says-turning-pensions-Isas-disaster.html

Share this post


Link to post
Share on other sites

Pyramid/Ponzi schemes tend to collapse.....QUICKLY

Ponzis keep going until there is no more money left. As we know there is plenty more money left in the old printing press.

Share this post


Link to post
Share on other sites

People who have seen no changes expect things to carry on exactly as they are. These people will scramble to buy as they think they are gaining something.

It's so sad, but it is the nature of people.

Share this post


Link to post
Share on other sites
"The distortion caused by this stamp duty change appears to be larger than any previous stamp duty change we have seen," said CML economist Mohammad Jamei.

"As a result, we expect there will be about 10,000 fewer mortgaged transactions each month in the second quarter of 2016 than would otherwise have been the case, offsetting the increase in activity seen in March."

I wonder if those pilling in took note of section 24 of the 15/16 finance bill? Cynically I'd say Osb has caught them in a net. In other areas like mortgage lending criteria changes for BTL the rug is rapidly being pulled away too. Quietly the boe has been looking at the BTL risks.

Share this post


Link to post
Share on other sites

I new someone who still rushed to buy several weeks after the MIRAS change had happened.

I myself said 'house prices will stay the same but won't go down' I later sold at about 20% off peak.

Share this post


Link to post
Share on other sites

Those of use old enough to remember the rush caused by the removal of dual MIRAS know what happens next :)

Came across this topic from 9 years ago about MIRAS removal, very interesting, my favourite bit being "The only equivalent trigger I can think of would be dropping the tax exemption for BTL mortgage interest payments. Now how likely is that...?"

http://www.housepricecrash.co.uk/forum/index.php?/topic/57380-miras-how-did-it-work-back-in-the-last-crash/

Edited by Barnsey

Share this post


Link to post
Share on other sites

Well, on that theme, I fully expect a move to allow residential property to be held within SIPPs and SSAS pension schemes.

The policy will be sold as a logical extension of 'pension freedom' . In reality it will hoover up all that pension cash currently and maintain some liquidity and demand boost when the market flags.

It was mooted before, and surveys suggest such a move has popular support, providing the chancellor with convenient political cover.

http://www.telegraph.co.uk/finance/personalfinance/investing/sipps/10110606/Let-us-put-homes-in-our-pension-plans-say-nine-in-10.html

They might even leak some scares about CGT being charged on gains from HPI, just to encourage all that pension cash into the housing market.

Share this post


Link to post
Share on other sites

I dont.

I expect SIPP pensions to be seriously reworked.

They've been as disaster for too many people - too many shyters selling magic beans.

Share this post


Link to post
Share on other sites

Id say the headline is wrong.

Id guess it was mainly people buying 2nd homes that were rushing.

The time taken to get a BTL means very few would have been able to turn around between the changes being announced and a purchase completing.

I would guessm ost buyers, be they 2nd homers or BTLer, will regret rushing in. Such is life.

From the people I know, I wouldn't bet that the headline is wrong.

I have a few friends who are BTL'ers and a couple of them bought more properties before the deadline, another one finally bought his own flat after running his family's portfolio (no doubt a few properties have been put in his name in the past).

Of the 3 main buy to let friends I have (with portfolios of over 4-5 houses), their views are:

1) The largest with many properties around London - 'Prices are crazy and cannot continue' - No intention to sell as they bought many years ago and could absorb any falls, although oddly he didn't really know much if anything about the tax changes coming !

2) A few p

Share this post


Link to post
Share on other sites

I dont.

I expect SIPP pensions to be seriously reworked.

They've been as disaster for too many people - too many shyters selling magic beans.

Which makes them a perfect vehicle for the residential property sector..

Share this post


Link to post
Share on other sites

Well, on that theme, I fully expect a move to allow residential property to be held within SIPPs and SSAS pension schemes.

The policy will be sold as a logical extension of 'pension freedom' . In reality it will hoover up all that pension cash currently and maintain some liquidity and demand boost when the market flags.

It was mooted before, and surveys suggest such a move has popular support, providing the chancellor with convenient political cover.

http://www.telegraph.co.uk/finance/personalfinance/investing/sipps/10110606/Let-us-put-homes-in-our-pension-plans-say-nine-in-10.html

They might even leak some scares about CGT being charged on gains from HPI, just to encourage all that pension cash into the housing market.

Bingo!

One respondent to the survey said: "Stock market performance is simply too unpredictable nowadays and other options are needed which better allow for growth as well as an element of capital protection. Property fits the bill." Another said: "Can’t wait to invest my Sipp into residential property instead of relying on the stock market and its alarming crashes and recoveries."

A third said: "I think that when you invest it’s really important to invest in something that you understand, and it’s fair to say that most people understand residential property."

Share this post


Link to post
Share on other sites

Allowing SIPPs to buy houses would be a disaster.

Can't we find some bit of Antarctica or something to build investment properties on. Some of us need to live in the ones around here.

Edited by irrationalactor

Share this post


Link to post
Share on other sites

Bingo!

Ah that 'most people understand residential property' but they dont!

They are clueless about the relation between rents and LHA.

They are clueless that having 90% of your wealth exposed to one asset class - property - is insane.

They are clueless of finance - how on earth would Endowments been popular if people where financially adept.

They are clueless abut ebbs + flows.

People are gettign excited about London as 'thats where all the high paying finance jobs are'

Without realising London is one big HB play.

Without realising that finance jobs might go.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • Next General Election   93 members have voted

    1. 1. When do you predict the next general election will be held?


      • 2019
      • 2020
      • 2021
      • 2022

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.