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Sky Views: The end of the amateur landlord?

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58 minutes ago, Mikhail Liebenstein said:

I think the aim is to further financialize things for the big banks and insurers.

I'm not sure I would prefer to lose my present amateur landlord and enter into a contract with an investment company/ fund manager should the landscape change in the future.

I'd lose a landlord who is fair and keeps the building in repair. In return I pay the market rate which admittedly is too high and that problem needs needs rectifying, but it's what somebody else would pay. If there is anything needs doing I ring him up and we chat amicably, he knows i'm a good tenant and is co-operative.

Instead i'd be beholden to a faceless national (or international) company with maybe a more corporate attitude. In case of dispute i'd be up against a finance department, debt collection dept and a legal dept. with a budget way above mine.

Looking at all the planning for PRS blocks of flats in Northern cities - Brum, Manchester, Leeds etc. I think this is the way it is going. We will still be paying too much for shelter, just that this time it will be to a company who may not even be based in the UK, fat chance of chatting about who needs to trim the bushes then, if it is in the small print of your contract.

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1 hour ago, frankief said:

I'm not sure I would prefer to lose my present amateur landlord and enter into a contract with an investment company/ fund manager should the landscape change in the future.

I'd lose a landlord who is fair and keeps the building in repair. In return I pay the market rate which admittedly is too high and that problem needs needs rectifying, but it's what somebody else would pay. If there is anything needs doing I ring him up and we chat amicably, he knows i'm a good tenant and is co-operative.

Instead i'd be beholden to a faceless national (or international) company with maybe a more corporate attitude. In case of dispute i'd be up against a finance department, debt collection dept and a legal dept. with a budget way above mine.

Looking at all the planning for PRS blocks of flats in Northern cities - Brum, Manchester, Leeds etc. I think this is the way it is going. We will still be paying too much for shelter, just that this time it will be to a company who may not even be based in the UK, fat chance of chatting about who needs to trim the bushes then, if it is in the small print of your contract.

Indeed with the typical modern efficiency of UK corporates meaning in reality after keying in your identity code and pin number being shunted from department to department, person to person, on the end of recorded messages on a loop with the multiple choice questions along with canned music you don't like and then hearing the office is closed now so call back tomorrow, your call is important to us and with letters being mysteriously lost in the post and so on and suchlike it won't be an improvement. 

They'll have the money to afford to put any number of barriers to communication and hearing tenant issues.

Edited by billybong

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1 hour ago, Blod said:

Looks like Sky employ a BTLer to write an article in support of guess what. Renting according to that is a lifestyle choice. So sad that many LLs are going to miss the the party.

Yeah, the sleight of hand involved in the millennial who can't get on the property ladder for unspecified reasons and the low-income earner who seems to have a different problem, see their problems evaporate away because they are much better off just renting irrespective of house prices is akin to Brother Lee Love performing a stage card trick.

 

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On 15/04/2017 at 0:08 PM, frankief said:

I'm not sure I would prefer to lose my present amateur landlord and enter into a contract with an investment company/ fund manager should the landscape change in the future.

I'd lose a landlord who is fair and keeps the building in repair. In return I pay the market rate which admittedly is too high and that problem needs needs rectifying, but it's what somebody else would pay. If there is anything needs doing I ring him up and we chat amicably, he knows i'm a good tenant and is co-operative.

Instead i'd be beholden to a faceless national (or international) company with maybe a more corporate attitude. In case of dispute i'd be up against a finance department, debt collection dept and a legal dept. with a budget way above mine.

Looking at all the planning for PRS blocks of flats in Northern cities - Brum, Manchester, Leeds etc. I think this is the way it is going. We will still be paying too much for shelter, just that this time it will be to a company who may not even be based in the UK, fat chance of chatting about who needs to trim the bushes then, if it is in the small print of your contract.

How do you know that the alternative is not cheaper housing that you can afford to buy yourself (assuming that you want to)?

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Think of a buy-to-let landlord and some will think of Robbie Fowler, the former England footballer, who inspired the terrace chant "we all live in a Robbie Fowler house". Others will think of Fergus Wilson, the former maths teacher who became Britain's biggest private landlord, but who recently attracted notoriety when it emerged he had urged letting agents not to sign tenants with a liking for curry. Yet they are atypical.

At present, 78% of all landlords own just one private rental property and a further 17% between two and four rental properties. According to research by Peel Hunt, the stockbroker, almost 98% of rental properties in the UK are owned by landlords who own fewer than 10 properties - while a mere 1% of landlords own more than 100 properties.

The market also lacks so-called 'institutional' landlords - investment firms that own large rental property estates. In Britain, the big institutional property investors prefer to own shopping centres, offices and warehouses rather than houses or flats.

The property consultants IPD calculate that in Britain, just 4% of all such investment is directed towards rental properties, compared with 19% in Japan, 25% in the United States and 46% in the Netherlands.

So Fergus isn't the problem. Nor Robbie Fowler. It's that nice young couple next door to you who rented out her flat when they moved into his flat together.

Do our discussions on HPC really reflect this figure of 98%?

 

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On 15/04/2017 at 0:08 PM, frankief said:

I'm not sure I would prefer to lose my present amateur landlord and enter into a contract with an investment company/ fund manager should the landscape change in the future.

I'd lose a landlord who is fair and keeps the building in repair. In return I pay the market rate which admittedly is too high and that problem needs needs rectifying, but it's what somebody else would pay. If there is anything needs doing I ring him up and we chat amicably, he knows i'm a good tenant and is co-operative.

Instead i'd be beholden to a faceless national (or international) company with maybe a more corporate attitude. In case of dispute i'd be up against a finance department, debt collection dept and a legal dept. with a budget way above mine.

Looking at all the planning for PRS blocks of flats in Northern cities - Brum, Manchester, Leeds etc. I think this is the way it is going. We will still be paying too much for shelter, just that this time it will be to a company who may not even be based in the UK, fat chance of chatting about who needs to trim the bushes then, if it is in the small print of your contract.

 

Human landlords pay a lot of tax (even before the recent tax changes). Often 40% income tax and CGT and also potentially inheritance taxes. Plus humans die so the house will very likely come back o to the market at some stage in the not too distant future

Corporate Landlords will only pay 17% corp tax. If a large company in the form of a REIT their owners if in a pension or ISA will pay literally nothing in taxes. Plus a corporation could live indefinitely and they will mostly transact between themselves in bulk lots of hundreds or thousands of units so the homes will never come onto the market

From the point of the investors corporate is better. From the point of view of the government and public human landlord are better due to the much higher taxes and limited ability to hold onto property indefinitely

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13 hours ago, RushRoad said:

Human landlords pay a lot of tax (even before the recent tax changes). Often 40% income tax and CGT and also potentially inheritance taxes. Plus humans die so the house will very likely come back o to the market at some stage in the not too distant future

Corporate Landlords will only pay 17% corp tax. If a large company in the form of a REIT their owners if in a pension or ISA will pay literally nothing in taxes. Plus a corporation could live indefinitely and they will mostly transact between themselves in bulk lots of hundreds or thousands of units so the homes will never come onto the market

From the point of the investors corporate is better. From the point of view of the government and public human landlord are better due to the much higher taxes and limited ability to hold onto property indefinitely

RushRoad, I think that you are an idiot.

I've been following buy-to-let for years now; reading landlord fora, reports from think tanks, articles in the press, bits and pieces from the Treasury, various reports from the Bank of England, reports from the Commons Library, records of evidence and reports from committees of both the House of Lords and the Commons.

I have never encountered the idea of "human landlords". It's idiotic.

Also having read a fair amount of your posting over the last week I am coming to the view (suggested earlier by Ah-so) that you are not completely ignorant, but you are nowhere near as well informed as you suppose yourself to be. Ordinarily that isn't in an of itself a problem. It's an open forum and it wouldn't do to exclude people just because they are a bit muddled about some details.

You are clearly pushing an agenda, and again, there is nothing intrinsically wrong about that.

However, when an informed reader reads your posts, they discover falsehoods and confusion and those falsehoods are the basis of the argument with which you promote your agenda.

At this point I get very suspicious and alert to the possibility that you may be acting in bad faith. I am concerned that perhaps you know that what you are saying is essentially false, but you say it anyway in order to make the point that you want to make. That would be intellectually dishonest (arguably just dishonest full stop).

Take the very first line of what you have written: "Human landlords pay a lot of tax (even before the recent tax changes)."

Firstly it confuses two entirely separate groups, unincoporated landlords using leverage and unincorporated landlords not using leverage.

Secondly it makes an assertion which is false about both groups.

Unincorporated un-leveraged landlords pay tax on income at the same marginal rates as everyone else (and at the same effective rates too) and are completely unaffected by section 24. This is not "a lot of tax", given the income they receive. It is proportionate to their income. Existing unincorporated un-leveraged investors are unaffected by the SDLT changes (the changes to the Wear and Tear allowances are trivial) .

Unincorporated leveraged landlords are a very mixed bunch; investors with high gearing, on higher mortgage interest rates and modest yields were paying virtually no tax before section 24 (of course they were making very little profit, but may have enjoyed substantial capital gains - on which they have also paid no tax).

The unincorporated, leveraged buy-to-let game as deployed by portfolio landlords prior to section 24 has been a perfectly legal structure which enabled people to make capital gains and re-invest them and pay virtually no tax - and this is how it was often promoted to investors.

58f4ae4bd072c_KevinGreen-taxfree.png.f93685d0228130da8a2aa0b019366ae1.png

Source (I have added the red box for emphasis)

The idea that a "human landlord" pays more tax than a "corporate" landlord is a lie.

Individuals have a personal allowance and pay tax on the next £32,000 at 20%. Once allowable costs and the s24 reliefs are applied some unincorporated landlords pay no tax. Many will pay an effective rate of tax of 10% or less. 

I can suggest two reasons to make such an argument (there may be others). One is that you yourself are stupid, so you find it convincing. The other is that you know it is stupid but you hope to deceive others who you suppose are stupid enough to be taken in by it.

Who are these corporate landlords really, if they are pension funds and life insurers? They are us, the great unwashed. The corporation is an economic structure but its beneficiaries are people - "humans" even.

 

Edited by Bland Unsight

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15 minutes ago, Bland Unsight said:

RushRoad, I think that you are an idiot.

I've been following buy-to-let for years now; reading landlord fora, reports from think tanks, articles in the press, bits and pieces from the Treasury, various reports from the Bank of England, reports from the Commons Library, records of evidence and reports from committees of both the House of Lords and the Commons.

I have never encountered the idea of "human landlords". It's idiotic.

Also having read a fair amount of your posting over the last week what I am coming to the view (suggested early by Ah-so) that you are not completely ignorant, but you are nowhere near as well informed as you suppose yourself to be. Ordinarily that isn't in an of itself a problem. It's an open forum and it wouldn't do to exclude people just because they are a bit muddled about some details.

You are clearly pushing an agenda, and again, there is nothing intrinsically wrong about that.

However, when an informed reader reads your posts, they discover falsehoods and confusion and those falsehoods are the basis of the argument with which you promote your agenda.

At this point I get very suspicious and alert to the possibility that you may be acting in bad faith. I am concerned that perhaps you know that what you are saying is essentially false, but you say it anyway in order to make the point that you want to make. That would be intellectually dishonest (arguably just dishonest full stop).

Take the very first line of what you have written: "Human landlords pay a lot of tax (even before the recent tax changes)."

Firstly it confuses two entirely separate groups, unincoporated landlords using leverage and unincorporated landlords not using leverage.

Secondly it makes an assertion which is false about both groups.

Unincorporated un-leveraged landlords pay tax on income at the same marginal rates as everyone else (and at the same effective rates too) and are completely unaffected by section 24. This is not "a lot of tax", given the income they receive. It is proportionate to their income. Existing unincorporated un-leveraged investors are unaffected by the SDLT changes (the changes to the Wear and Tear allowances are trivial) .

Unincorporated leveraged landlords are a very mixed bunch; investors with high gearing, on higher mortgage interest rates and modest yields were paying virtually no tax before section 24 (of course they were making very little profit, but may have enjoyed substantial capital gains - on which they have also paid no tax).

The unincorporated, leveraged buy-to-let game as deployed by portfolio landlords prior to section 24 has been a perfectly legal structure which enabled people to make capital gains and re-invest them and pay virtually no tax - and this is how it was often promoted to investors.

58f4ae4bd072c_KevinGreen-taxfree.png.f93685d0228130da8a2aa0b019366ae1.png

Source (I have added the red box for emphasis)

The idea that a "human landlord" pays more tax than a "corporate" landlord is a lie.

Individuals have a personal allowance and pay tax on the next £32,000 at 20%. Once allowable costs and the s24 reliefs are applied some unincorporated landlords pay no tax. Many will pay an effective rate of tax of 10% or less. 

I can suggest two reasons to make such an argument (there may be others). One is that you yourself are stupid, so you find it convincing. The other is that you know it is stupid but you hope to deceive others who you suppose are stupid enough to be taken in by it.

Who are these corporate landlords really, if they are pension funds and life insurers? They are us, the great unwashed. The corporation is an economic structure but its beneficiaries are people - "humans" even.

 

 

 

 

You speak with no experience, you can watch as many you tube videos as you like and spend as much time on forums as you like all they are doing is feeding your confirmation bias. Sole trader landlords (aka human landlords) pay more taxes than corporate landlords will ever pay

In some countries, single companies can and do own 100,000 properties or more and they will never sell them to individuals

Imagine a UK REIT that owned 100,000 properties, they would literally pay nothing in taxes and you will never get a look in at buying one of the properties they hold. Yes some small portion of this company might be owned by uk pension funds but a large portion of it wont be and it will be owned by rich individuals maybe even foreign governments funds who will pay zero taxes

The same 100,000 properties owned by say 50,000 uk landlords (2 a piece) will pay significantly more in taxes and will pay CGT and will pay IHTs and at some stage they will have to sell due to death/divorce/wanting-to-sell while the corporate will only ever trade in blocks among themselves

Don't shoot yourself in the foot by pretending a corporate will pay lots of tax they will pay nothing

 

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13 hours ago, RushRoad said:

From the point of the investors corporate is better. From the point of view of the government and public human landlord are better due to the much higher taxes and limited ability to hold onto property indefinitely

What this false dichotomy misses is that all landlords should be subject to the same laws regarding their business. Also that what is better for the public and society as a whole is to greatly diminish the number of landlords of all types, especially the leveraged ones.

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'Public Human Landlord'

Oh dear, it's like I'm supposed to feel sorry for these parasitic goons now that they are 'public' and 'Human' instead of 'private' and 'c**ts'.

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15 minutes ago, Lavalas said:

Oh dear, it's like I'm supposed to feel sorry for these parasitic goons now that they are 'public' and 'Human' instead of 'private' and 'c**ts'.

Is it working on you? It's not really working on me.

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22 minutes ago, Bland Unsight said:

Is it working on you? It's not really working on me.

Not yet, but if he can give me a bit more detail on the human side of Landlords then it could work. If he comes back to tell us he hasn't posted for a while because he's been out delivering Easter eggs to his tenants then I might just throw caution to the wind and buy a portfolio.

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12 minutes ago, buckers said:

Quite. You only need to look at the 'market' behaviour of the power companies to know this 'big boys only' move is going to be bad for tenants. Unless you like moving every year (or threatening to do so) in order to get competitive rent?

That's just such utter b0llocks.

The wiki definition of financialisation will do for a start: "Financialization is a term sometimes used to describe the development of financial capitalism during the period from 1980 until 2010, in which debt-to-equity ratios increased and financial services accounted for an increasing share of national income relative to other sectors."

Hence if you use tax to discourage investment by mug punters financing themselves with money borrowed from a bank at 60%-75% LTV whilst encouraging lower leverage corporate investment it is evidence of declining financialisation.

In fact the article is total b0llocks because nobody is discouraging "amateur landlords" in the sense of punters investing in property. All that is being discouraged is leveraged investment; poor men playing a rich man's game with borrowed money.

It's not a 'big boys only' move. That's PovertyLater horseshit, got up by morons in the hope of escaping financial disaster by getting the tax that will gut them repealed before it's too late.

 It's a dark day when that nonsense gets repeated here as if it was a reasonable perspective.

People who leveraged up and hung on to their old flat because they did not like the price a buyer was willing to offer them (or couldn't bear to miss out on the capital gain the property was certain to make in the future) aren't "amateur landlords", they're just looking for a handout and making a dubious pact with a shit bank in order to collect the handout. They are the greedy, idiotic face of financialisation enabling the real 'big boys', the mortgage-lending banks, to get 40% of a massively expanded PRS onto interest-only mortgages; £200bn+ of non-amortising debt secured on 2 million homes, in just 20 years.

These are your 'big boys':

C7C3WteU8AAji5C.jpg

As for the idea that some army of people who don't want to be thought of as professional landlords (and often seem reluctant to acknowledge that they are actually landlords) with sketchy financing are somehow necessarily benevolent or less likely to gouge. FFS. Have you noticed the answer that the buy-to-let crowd have for every single bump in the road, be it licensing, SDLT, s24 - anything really: "Jack the rents up, innit".

The pin-up for the mug BTL tw@t with a buy-to-let mortgage is Fergus Wilson. I'll take my chances with a corporate landlord every single time.

 

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If I could just get access to some sensibly priced land with planning permission I'd build my own house. The corporations can own all the squillions of properties they like.

There are other options not being discussed.

 

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3 hours ago, RushRoad said:

You speak with no experience, you can watch as many you tube videos as you like and spend as much time on forums as you like all they are doing is feeding your confirmation bias. Sole trader landlords (aka human landlords) pay more taxes than corporate landlords will ever pay

Now you can experience Section 24, and the 'ridiculous' marginal tax rate you have been complaining about on HPC. :)

We have the experience of posts telling how BTLers were dancing into trouble during the last few years.

Section 24.

It's levelling the playing field.

And we have see the numbers from quite a few BTLers in recent times and their tax-liabilities.

£0.

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1 minute ago, Venger said:

Now you can experience Section 24, and the 'ridiculous' marginal tax rate you have been complaining about on HPC. :)

We have the experience of posts telling how BTLers were dancing into trouble during the last few years.

Section 24.

It's levelling the playing field.

And we have see the numbers from quite a few BTLers in recent times and their tax-liabilities.

£0.

 

Keep an eye out on the number of BTL repo stats over the coming months and years so you can see if the theory of landlords going bankrupt actually plays out

 

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4 hours ago, RushRoad said:

The same 100,000 properties owned by say 50,000 uk landlords (2 a piece) will pay significantly more in taxes and will pay CGT and will pay IHTs and at some stage they will have to sell due to death/divorce/wanting-to-sell while the corporate will only ever trade in blocks among themselves

Don't shoot yourself in the foot by pretending a corporate will pay lots of tax they will pay nothing

This is all just idiotic bilge from a troll idiot who loves his interest-only buy-to-let mortgages.

There have always been un-leveraged unincorporated landlords in the UK, and they'll still be with us going forward. Also, they have always paid more tax that the over-leveraged portfolio w@nkers, who pay f**k all tax. For the real landlords nothing has really changed. Nobody is trying to replace them with 'corporate big boys' FFS.

The government is not attacking landlords. The UK remains a rentiers' paradise.

The problems are being faced by the the leveraged tw@ts.

The corporates are largely engaged in a totally different market. Build-to-rent. They aren't competing with the leveraged portfolio landlords and when you buffoons sell-up they won't be jumping into the graves you've so incautiously dug for yourselves. You'll be selling to rich people who can afford investment properties (if they want them) or you'll be selling to us, so f**k off with your risible scaremongering about 'corporate big boys'. You're just a nasty little shill for the real big boys - the banks.

You, as an individual, are monumentally insignificant - to the market and to us here too. You're also insignificant to your lenders. They'll crush you if it suits them and they never needed you in the first place; any mug tw@t with a hankering to show they 'understand property' would have done just as well.

Edited by Bland Unsight

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4 hours ago, RushRoad said:

You speak with no experience, you can watch as many you tube videos as you like and spend as much time on forums as you like all they are doing is feeding your confirmation bias. Sole trader landlords (aka human landlords) pay more taxes than corporate landlords will ever pay

You're a kind of BTL troll f**kwit superhero, The Anecdoctor! (Also introducing Ros Bosher, a plucky, over-leveraged damsel in distress).

SCENE: At the main airlock of Moonbase PovertyLater, Ros Bosher and The Anecdoctor contemplate the coming assault of a terrifying space monster.

Ros Bosher:

Oh, Anecdoctor. It's not working! It's not working! I've put together a seventy page pile of shite - The Right-Click Delete report  - and emailed it to The Monster From Section 24 but it bounced off its shield of logic and evidence and it JUST KEEPS COMING! My carefully cherry picked facts and my tendentious arguments - all useless. Is there anything you could do - the lives of many Human Landlords are in jeopardy and nobody seems to be able to to anything!

The Anecdoctor:

Have you tried anecdotes?

Ros Bosher:

What do you mean?

The Anecdoctor:

I have adjusted this laptop so that it can take any argument, no matter how complex, and reduce it to a suitable anecdote which shows I am right.

Ros Bosher:

That's amazing. You're a genius. We're saved!

[A terrible roar is heard]

Ros Bosher:

Oh God! Oh God! The Monster From Section 24, it's here, it's here! It's finally here.

The Anecdoctor:

Don't worry - I'll save you. The latptop battery is fully charged and the Anecdote App is creating a stream of potent anecdotes right this minute, even as we speak. I'm ready to go. Don't worry, Ros. I'll save all the Human Landlords

[Pulls on spacesuit helmet and enters the airlock. Ros Bosher moves to the viewing window and watches as The Anedoctor fires up his laptop and bombards The Monster From Section 24 with a flurry of anecdotes. The Monster From Section 24 hesitates]

Ros Bosher:

Is it confused? Is it scared? Are the anecdotes... working?

[The Monster From Section 24 recovers its composure and then eats The Anecdoctor]

Ros Bosher:

The gobshite, useless c**t.

THE END

Edited by Bland Unsight

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35 minutes ago, RushRoad said:

Keep an eye out on the number of BTL repo stats over the coming months and years so you can see if the theory of landlords going bankrupt actually plays out

Only the most incautious will go bust. High-leverage, having MEWed out the equity they need to pay the CGT that will be owing. You're just bayoneting another straw man.

The consensus here has always been that section 24 will force lots of leveraged portfolio landlords to sell up some of their property to reduce their leverage, and this is exactly what they are now admitting that they are doing. If we tried to predict it now it would be a false prophecy because it's already happening.

Do you actually know anything about the buy-to-let game beyond what you've learned from looking at your own investment?

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