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how the Government destroyed buy-to-let in 16 months

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Telegraph : how the Government destroyed buy-to-let in 16 months

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NNot long ago it was the investment for choice of the middle classes. "My buy-to-let is my pension," was the refrain of the two million strong army of small landlords.

But in less than two years this form of investment has been all but destroyed.

A series of tax and regulatory changes, spearheaded by former Chancellor George Osborne, has left landlords reeling - even though the full implications are yet to be felt. 

Middle-class mortgaged landlords will be hardest hit, with the retirement plans of many thrown into disarray. Large-scale landlords and those operating as companies will escape largely unscathed, however.

 

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Questions:

Why is the DT hammering almost every day against BTL and Middle class?

Why/how will large-scale landlords escape unscathed?

Does it mean Fergus will escape unscathed?

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41 minutes ago, Fairyland said:

Questions:

Why is the DT hammering almost every day against BTL and Middle class?

Why/how will large-scale landlords escape unscathed?

Does it mean Fergus will escape unscathed?

DT is hammering on about this because they are trying to influence/lobby next weeks Autumn Budget Statement......

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It was clearly shown in 2007 by versious MSM outlets what a folly the "BTL is my pension" was.

 

Things are much worse now and it's gone from  "BTL is my pension" to "I invested my pension into BTL and now I;m f**jked".

 

Edited by TheCountOfNowhere

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I had convo with work colleague last week - should he take his transfer value from pension and buy a property to let.

Before you start laughing hysterically think about it from his point of view. Every time he reads the news it is full of doom about how pensions are so mightily flucked thanks to years of zirp, hardly any are completely solvent, there's a good chance you can say goodbye to any expectations that index-linked payment promises will be fulfilled, and in short the barstewards are gearing up to rob you blind. Whereas in contrast everyone knows that property is ultra-safe and only goes up.

Obviously it's wrong to give people financial advice so I told him to go and have a cold shower and think again. Something about his logic is keeping me awake at nights though.

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38 minutes ago, Funn3r said:

I had convo with work colleague last week - should he take his transfer value from pension and buy a property to let.

Before you start laughing hysterically think about it from his point of view. Every time he reads the news it is full of doom about how pensions are so mightily flucked thanks to years of zirp, hardly any are completely solvent, there's a good chance you can say goodbye to any expectations that index-linked payment promises will be fulfilled, and in short the barstewards are gearing up to rob you blind. Whereas in contrast everyone knows that property is ultra-safe and only goes up.

Obviously it's wrong to give people financial advice so I told him to go and have a cold shower and think again. Something about his logic is keeping me awake at nights though.

But that's the problem when we have been conditioned into believing property can only go up, and showered from the MSM about how wonderful it is.  I don't blame him at all.  And equally going by past performance a lot of people have done incredibly well riding the wave with far less blips than rises.

 

And didn't these pension reforms come in recently that allowed some kind of early cash withdrawal?  Maybe it was to keep the fire burning/ economy rolling.. Or was it altruism giving more power to the people and away from the large funds institutions.  Either way there was another glut of MSM advice/ nudging towards the investment into Btl no?

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1 minute ago, Dogtanian said:

But that's the problem when we have been conditioned into believing property can only go up, and showered from the MSM about how wonderful it is.  I don't blame him at all.  And equally going by past performance a lot of people have done incredibly well riding the wave with far less blips than rises.

 

And didn't these pension reforms come in recently that allowed some kind of early cash withdrawal?  Maybe it was to keep the fire burning/ economy rolling.. Or was it altruism giving more power to the people and away from the large funds institutions.  Either way there was another glut of MSM advice/ nudging towards the investment into Btl no?

Or was it just the rich establishment trying to get every mug to shore up their pyramid scam.

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Anyone holding property directly is f@@ked - so that includes Fungus the Landlordman. The tax changes haven't hit property owned via a limited company in the same way so that covers most large operators. 

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3 hours ago, Funn3r said:

I had convo with work colleague last week - should he take his transfer value from pension and buy a property to let.

Before you start laughing hysterically think about it from his point of view. Every time he reads the news it is full of doom about how pensions are so mightily flucked thanks to years of zirp, hardly any are completely solvent, there's a good chance you can say goodbye to any expectations that index-linked payment promises will be fulfilled, and in short the barstewards are gearing up to rob you blind. Whereas in contrast everyone knows that property is ultra-safe and only goes up.

Obviously it's wrong to give people financial advice so I told him to go and have a cold shower and think again. Something about his logic is keeping me awake at nights though.

Depends on the pension. A DB pension is largely a golden ticket. A DC fund, that is being (mis) managed by a spiv pillaging it with fees is not. 

And a SIPP managed by the individual offers an exceptional level of control far greater than any buy to let ever could, huge tax avoidance ops, offers massive diversification and literally limiles possibilities. I would rather have a DB pension of course - simply for the erm..simplicity, but that ship has sailed and arguably should never have existed.

Anyone can move a DC pension into a SIPP. People are just too stupid to see beyond the mass delusion of bricks and mortar as the only game in town.

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4 hours ago, TheCountOfNowhere said:

It was clearly shown in 2007 by versious MSM outlets what a folly the "BTL is my pension" was.

 

Things are much worse now and it's gone from  "BTL is my pension" to "I invested my pension into BTL and now I;m f**jked".

 

Did you buy the 1 million house? 

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Edited by rollover

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6 hours ago, Funn3r said:

 

Obviously it's wrong to give people financial advice so I told him to go and have a cold shower and think again. Something about his logic is keeping me awake at nights though.

Why?  When there is finally so much good news and things to look forward to, with many BTLers having posting about selling.  Articles such as this.  

Analysis: how the Government destroyed buy-to-let in 16 months

What other choices do you have?  To buy a home now, as more and more comes down on the BTLers who piled in during the last few years, when many HPCers were projecting it to be a trap for greed?   You could.  I won't.  (Although there are some areas I see some fair value).   These prices and for me, the debt required.  I don't want to buy on a street where so many BTLers and then so many other owners equity rich or outright owners.

Dogtanian - so what if there were happy BTL stories in the papers?  I don't own a home even if I could afford to buy one?   BTLers been outbidding me time over.  

We have our own minds as well.  If you were reading HPC you would have seen many a post suggesting the BTLers were dancing into a Greed-Trap, and exist to take risk away from the banks, and onto themselves.  In that I include a couple who had seen their home in London go from £90K value in early 90s, to claim it being worth £750K today.  They bought a £500K 1-bed BTL just weeks before Section 24 announced.  If they can't afford S24 costs on it, they have their own home to bring to market.  And the BTL.  Let's see what the market will pay them.

 

Bland Unsight, on 14 Oct 2015 - 9:46 PM, said:snapback.png

 

[...]The essential difference boils down to the stability of these prices. How confident can you be that you can get your money on the table and then get your money and your winnings off the table before the market turns against you. A lot of people, self-included, would have said that by 2003 you were playing a very dangerous game by pulling up a chair at the gambling table and making a leveraged bet on property. Of course, with the benefit of hindsight, many people entering after 2003 will have been able to get their money and their winnings off the table. I regret that they were allowed to gamble, but they were, and there is no denying that if you were lucky with your timing, you could make easy money.

 

I still hold the same opinion. I am not sufficiently convinced that prices are stable at this level to start handing over every last penny of savings to a bank in order to buy a shit house. I am happy to pay a BTLer to take that balance sheet risk on my behalf. I'd rather we'd had a massive correction in prices and the extermination of the buy-to-let sector, but that hasn't happened yet, so I take the world as I find it and make a call. I sleep well at night. I feel no rancour towards the BTL tw@ts. The whole business is not a big deal emotionally for me. What I feel is, as I've said before, sadness and grief; I think that Byron cut to the chase when he mentioned his anger at the fact that these clowns meant that family formation is delayed and thus some people have gone to their grave having never met their grandchildren, just so that we could have a societally destructive housing bubble.

 

For me it's all about how do you respond to idiocy and iniquity. If you see a chance to make an easy buck and pile in, I think you are scum. I don't think that's manipulative. It's just my opinion.

 

[..]I'm not saying, "Golly, if I can make everyone believe this rubbish, I'll get a cheap house", I'm saying, "This is societally destructive unsustainable idiocy and I refuse to be complicit by an act of commission". I can't stop some herbert like Mark ganging up with a shit bank and using my earnings to pay a BTL mortgage but I can chose not to hand over my savings and sign up for a whacking great repayment mortgage.

 

The fundamental error in the BTLers reasoning about us is that he is a true believer in themselves. They're failing to understand that an alternative perspective on them is consistent with the facts. Amoral chancers disrupting other people's lives by making a daft and unsustainable pact with a bunch of banks that are so crap that they put themselves out of business.

 

One of the better comments on the article.

Quote

 18 Nov 2016 3:55PM
There is a national housing shortage. The number of buy to let properties has more than doubled since 2000. There are well over 2 million buy to let landlords. That is millions of homes taken off the market that would previously have been bought by younger people and families who are now forced to hand-over their wages every month to the older generation (mostly), who have abused their purchasing power for selfish gain. Buy to let is a scourge, it should never have been allowed to happen and the sooner it ends the better for society as a whole. I can think of a few words to describe buy-to-let landlords but let's go with 'shameless greedy spivs'.

Count, the establishment didn't make the BTLers buy up other peoples homes, and pay the prices they chose to pay.  11+ house GPs made their own choices.

Edited by Venger

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5 hours ago, Dogtanian said:

But that's the problem when we have been conditioned into believing property can only go up, and showered from the MSM about how wonderful it is.  I don't blame him at all.  And equally going by past performance a lot of people have done incredibly well riding the wave with far less blips than rises.

 

And didn't these pension reforms come in recently that allowed some kind of early cash withdrawal?  Maybe it was to keep the fire burning/ economy rolling.. Or was it altruism giving more power to the people and away from the large funds institutions.  Either way there was another glut of MSM advice/ nudging towards the investment into Btl no?

Boo-hoo.  They got what they wanted.  Other people's homes and rent and hopes for HPI capital gainz.  Not everyone is a winner baby, and some of the BTLers whining for they have to learn that.

Quote

June 17, 2015. Stockport Express/Messenger

Britain is current in the midst of a buy-to-let explosion, with a house being bought for investment and rental purposes approximately every five minutes. 

[...]Since 2010, 1.6 million buy-to-let mortgages have been sold, totalling £188 billion worth of approved loans. Second home owners are also cashing in. Many landlords across the country have become so by mistake, either by inheriting a property of finding to find use for a spare one.

 

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7 hours ago, Funn3r said:

I had convo with work colleague last week - should he take his transfer value from pension and buy a property to let.

Before you start laughing hysterically think about it from his point of view. Every time he reads the news it is full of doom about how pensions are so mightily flucked thanks to years of zirp, hardly any are completely solvent, there's a good chance you can say goodbye to any expectations that index-linked payment promises will be fulfilled, and in short the barstewards are gearing up to rob you blind. Whereas in contrast everyone knows that property is ultra-safe and only goes up.

Obviously it's wrong to give people financial advice so I told him to go and have a cold shower and think again. Something about his logic is keeping me awake at nights though.

Two completely different questions. 

1) should I take the transfer value. Long topic and for some a real option if his circumstances merit it. Also worrying about your scheme is a driver too. 

2) should I buy a BTL with the money. 

Definitely no. 

A) The 40/45% tax first of all (residential BTL is exempt from a SIPP so I assume he takes a massive massive tax hit). 

b ) residential prices have never been more wrong. he could not time it any worse if he tried.  

Edited by Phil321

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8 hours ago, Funn3r said:

I had convo with work colleague last week - should he take his transfer value from pension and buy a property to let.

Before you start laughing hysterically think about it from his point of view. Every time he reads the news it is full of doom about how pensions are so mightily flucked thanks to years of zirp, hardly any are completely solvent, there's a good chance you can say goodbye to any expectations that index-linked payment promises will be fulfilled, and in short the barstewards are gearing up to rob you blind. Whereas in contrast everyone knows that property is ultra-safe and only goes up.

Obviously it's wrong to give people financial advice so I told him to go and have a cold shower and think again. Something about his logic is keeping me awake at nights though.

This almost looks like an actuarial exam question.  "Cold shower" seems like a reasonable advice though.  Unless he thinks he'll die in a year or two.  But then he probably wouldn't be considering BTL -  to avoid increasing own chances of ending up in hell.

Edited by Bear Hug

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15 hours ago, Funn3r said:

I had convo with work colleague last week - should he take his transfer value from pension and buy a property to let.

Before you start laughing hysterically think about it from his point of view. Every time he reads the news it is full of doom about how pensions are so mightily flucked thanks to years of zirp, hardly any are completely solvent, there's a good chance you can say goodbye to any expectations that index-linked payment promises will be fulfilled, and in short the barstewards are gearing up to rob you blind. Whereas in contrast everyone knows that property is ultra-safe and only goes up.

Obviously it's wrong to give people financial advice so I told him to go and have a cold shower and think again. Something about his logic is keeping me awake at nights though.

So, in your conversation, did yout cover anything relating to the to the yield and rentals on property?

For all the complexity of pensions, Ive never seen anyone go into the complexity of property rentals.

The assumptions - and its always an assumption - is that a rental will cost £x and the income will be £x+20%.

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1 hour ago, spyguy said:

I flagged this article on another post.

Youve got to have the photos.

 

The photo in this morning's printed paper is even better.  The chap standing up is wearing a waistcoat that matches his trousers.

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