The rats are jumping ship...SELL SELL SELL

[Sugarlips]

4 hours ago, bear.getting.old said:

Interesting. Lots of mid terraced houses in Burnley for 38k - 50k some with tenants. Questions that spring to mind. Is Burnley a dump? And are these just part of the big S24 sell off.

The £1 houses in Liverpool did not go to plan. You can't polish a turd. They are £1 houses that you need to spend at least 60k on to do up and you have to live in it yourself for 5 years. Other conditions apply. You wouldn't want to live in them because the streets they are on is crime city. Drug dealers, scum, god knows what. You'll have the windows smashed in on a regular basis. Living hell

Bit old now but this nice footballer hoovered up half of Liverpool as part of his btl empire and wants you to go to one of his seminars so you too can help him price out the next generation:

https://www.theguardian.com/money/2015/sep/11/robbie-fowler-liverpool-footballer-buy-to-let-academy-courses

[Option5]

4 hours ago, bear.getting.old said:

Interesting. Lots of mid terraced houses in Burnley for 38k - 50k some with tenants. Questions that spring to mind. Is Burnley a dump? And are these just part of the big S24 sell off.

The £1 houses in Liverpool did not go to plan. You can't polish a turd. They are £1 houses that you need to spend at least 60k on to do up and you have to live in it yourself for 5 years. Other conditions apply. You wouldn't want to live in them because the streets they are on is crime city. Drug dealers, scum, god knows what. You'll have the windows smashed in on a regular basis. Living hell

If you have a postcode you can find out a lot about an area here: https://www.streetcheck.co.uk

[Guest]

Last week I heard of another instance of something that has bothered me for a while this past 10 or 15 years and it happens quite often, where I new relationship starts for example and they end up shacking up together in one of the two houses they now have and rent the other out to then years later sell it. Where do they stand tax wise?, because in same cases they have rented it out longer than they lived in it, and I know of a handful of cases where I am certain they just sold it in a normal OO type of way

[Jabbabhoy]

9 hours ago, pmf170170 said:

It's the taxation on turnover rather than profit without the ability to offset interest costs before calculating the tax due. It impacts higher rate tax payers and will bankrupt highly leveraged portfolio landlords - which could result in forced sales and falling prices. All BTL landlords get a 20 % tax credit, hence basic rate tax payers will be unaffected. Ireland tried it but it pushed rents up massively as landlords passed on their increased costs and was withdrawn after 5 yearss. Rents in the UK are thought to be at the maximum that tenants can sustain, hence the hope is that landlords won't be able to pass on their additional tax to tenants. It's going to be an interesting roller coaster ride. We live in interesting times and this could precipitate the housing crash that the SE needs. Not sure how the banks will fare.

As I understand things, landlords wont have to starting paying until next year? When is this first time they will see what the new costs are?

[Freki]

They already have seen it if they file their taxes. They will pay later but the wake up call has already happened

[BorrowToLeech]

9 hours ago, pmf170170 said:

It's the taxation on turnover rather than profit without the ability to offset interest costs before calculating the tax due. It impacts higher rate tax payers and will bankrupt highly leveraged portfolio landlords - which could result in forced sales and falling prices. All BTL landlords get a 20 % tax credit, hence basic rate tax payers will be unaffected.

S24, as I understand it, potentially affects lower rate tax payers even more, by pushing them into a higher tax band and reducing their benefits.

I was under the impression that your income, for the purpose of the inland revenue, is now the total net rent, regardless of any costs, as is the case with less anti-social investments.

9 hours ago, pmf170170 said:

Ireland tried it but it pushed rents up massively as landlords passed on their increased costs

Hahaha. No. 

9 hours ago, pmf170170 said:

Rents in the UK are thought to be at the maximum that tenants can sustain, hence the hope is that landlords won't be able to pass on their additional tax to tenants.

No, the established fact is that landlords can never pass on their costs, anywhere, including in Ireland. 

Quote

"The rent of land, therefore, considered as the price paid for the use of the land, is naturally a monopoly price. It is not at all proportioned to what the landlord may have laid out upon the improvement of the land, or to what he can afford to take; but to what the farmer can afford to give." — Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Book I, Chapter XI "Of the Rent of Land"

Doesnt stop rents going up if, say, your economy is booming because it’s a ‘European tiger economy’, lol.

Adam Smith (left)

Edited March 16, 2018 by BuyToLeech

[BorrowToLeech]

2 minutes ago, TonyJ said:

I am not sure if LLs would be earlier to do their returns because they are probably more complex.

Really? I think LL are mostly a bit simple. 

[Jabbabhoy]

39 minutes ago, TonyJ said:

If they haven't worked them out already, I presume the first time LLs will see the new costs will be when they fill out their tax return and see the calculations. I usually get my return out of the way about November, so I know then how much tax I owe, although I leave paying the tax until the end of Jan. I am not sure if LLs would be earlier to do their returns because they are probably more complex.

Thank you, so would this be Nov 18?

[Mrs Bear]

1 hour ago, inbruges said:

Last week I heard of another instance of something that has bothered me for a while this past 10 or 15 years and it happens quite often, where I new relationship starts for example and they end up shacking up together in one of the two houses they now have and rent the other out to then years later sell it. Where do they stand tax wise?, because in same cases they have rented it out longer than they lived in it, and I know of a handful of cases where I am certain they just sold it in a normal OO type of way

I would suspect that in quite a few cases they 'forget' to declare the rental income to the taxman.  

Have heard of one case where the rented house was eventually sold,  and  because it was not the main residence came to the attention of HMRC for both back tax and capital gains.  Very nasty shock and massive bills.  

Don't know whether a normal solicitor's due diligence would automatically uncover this - Land Reg search?  Plus you have to provide more than one form of ID inc. proof of address for conveyancing, though I'm sure there will be dodgy solicitors with ways and means. 

 

[Jabbabhoy]

4 minutes ago, TonyJ said:

Yes, I will do my 2017/18 tax return no later than about October/November 2018. But that's just me. I am not a well organised LL, who wants to know his Jan 2019 tax bill at the earliest possible opportunity so he can plan his finances ahead (sarcasm intended).

2017/18 tax year does not end until April 5th 2018, so it is not even possible for someone to submit their return for another couple of weeks.

So potentially by the end of the year we will see quite a few nervous landlords digesting the incoming tax bill for 2019, and potentially a number of properties coming to the market or rents inceasing

[hayder]

On 14/03/2018 at 12:10 PM, GreenDevil said:

 

 

Any idea of an approx cost of one of these houses, built and erected ready for interior fit?

Nothing listed on website.

forget huf haus for "affordable". that's high end luxury stuff. 

I find that in the UK a lot of people use Huf Haus as an "example" of prefab houses in order to make the shoddy traditional houses look "normally priced" by comparison.

look here for "normal" houses. 

http://houses4you.net/

they should be about 1/4 to 1/5th of the price of a Huf Haus

[bear.getting.old]

2 hours ago, inbruges said:

Last week I heard of another instance of something that has bothered me for a while this past 10 or 15 years and it happens quite often, where I new relationship starts for example and they end up shacking up together in one of the two houses they now have and rent the other out to then years later sell it. Where do they stand tax wise?, because in same cases they have rented it out longer than they lived in it, and I know of a handful of cases where I am certain they just sold it in a normal OO type of way

Well they can't claim it was their main residence while it was rented out as they will be registered to vote at the 'marital' home. They will have to pay CGT, but they will get relief for the period it was their main residence, that's how I understand it anyway

[bear.getting.old]

Main residence another name for PPR I think. I think technically you do have to nominate the one that is your PPR, but if it is obvious how the home is now rented and you never lived there lately you are allowed (don't quote me) 18 months or something of CGT before it ceases to be your main residence. Oh this is bugging me now

[bear.getting.old]

4 hours ago, Sugarlips said:

Bit old now but this nice footballer hoovered up half of Liverpool as part of his btl empire and wants you to go to one of his seminars so you too can help him price out the next generation:

https://www.theguardian.com/money/2015/sep/11/robbie-fowler-liverpool-footballer-buy-to-let-academy-courses

Wow. You know things are ****ed up when you have thick footballers getting 'portfolios'

[maverick73]

11 hours ago, TonyJ said:

Are their any stats available on LL leverage? Would be good to know how many are vulnerable to bankruptcy due to s24.

Its speculation. The BoE will continue to lessen the impact of each hike. They are trying to cool the market.

[2buyornot2buy]

10 hours ago, Mrs Bear said:

I would suspect that in quite a few cases they 'forget' to declare the rental income to the taxman.  

Have heard of one case where the rented house was eventually sold,  and  because it was not the main residence came to the attention of HMRC for both back tax and capital gains.  Very nasty shock and massive bills.  

Don't know whether a normal solicitor's due diligence would automatically uncover this - Land Reg search?  Plus you have to provide more than one form of ID inc. proof of address for conveyancing, though I'm sure there will be dodgy solicitors with ways and means. 

 

It's not the solicitors responsibility to check capital gains or income tax has been paid. 

[mrtickle]

13 hours ago, inbruges said:

Last week I heard of another instance of something that has bothered me for a while this past 10 or 15 years and it happens quite often, where I new relationship starts for example and they end up shacking up together in one of the two houses they now have and rent the other out to then years later sell it. Where do they stand tax wise?, because in same cases they have rented it out longer than they lived in it, and I know of a handful of cases where I am certain they just sold it in a normal OO type of way

I bet there are thousands of cases like this, where they don't declare it and don't pay a penny of tax.

And yes, it's not the solicitor's responsibility to check: and I bet that they do not.

So the sellers get away scott free.

 

[Fence]

11 hours ago, Mrs Bear said:

dodgy solicitors with ways and means. 

Proceeds of Crime Act, etc,  Not worth it,  You go down.

[Fence]

10 hours ago, bear.getting.old said:

Main residence another name for PPR I think. I think technically you do have to nominate the one that is your PPR, but if it is obvious how the home is now rented and you never lived there lately you are allowed (don't quote me) 18 months or something of CGT before it ceases to be your main residence. Oh this is bugging me now

All sorts of provisions so you could get several years.

[Mrs Bear]

10 hours ago, 2buyornot2buy said:

It's not the solicitors responsibility to check capital gains or income tax has been paid. 

I didn't think it was.  But are they responsible for checking for/advising  liability for CGT,  in the case of a 2nd+'property?  At least within the U.K.?  

 

[janch]

8 hours ago, Mrs Bear said:

I didn't think it was.  But are they responsible for checking for/advising  liability for CGT,  in the case of a 2nd+'property?  At least within the U.K.?  

 

I recently had to fill in a form via the solicitor in a house sale and  purchase saying it was my only property so not liable for CGT.  Maybe the solicitor was only covering their back or maybe they do have to report liability.

[oatbake]

Poverty Tripe, are one of the groups behind the ATTT (Axe the Tenant Tax) campaign. There is so much spin around the articles posted both there and on the ATTT page, it's unreal. 

The other day, the headline was that Section 24 "harms" housebuilding. When you actually read the article to which they'd posted a link, it was basically about a single developer (I forget which) that had said tax changes for landlords were "in part" responsible for them *not increasing* housebuilding..... hardly a compelling piece of evidence that S24 is going to have much of an effect at all. 

Predictably, the comments on the corresponding Poverty Tripe and the ATTT articles were full of (paraphrasing) "We told you so! This is going to be a disaster",  "if only somebody had told them..." etc. All very boring, but the key point is that these people still have their heads buried in the sand. They genuinely think that the world will end without their "contribution" to housing. They genuinely think that they do not compete with first-time buyers. But most staggeringly of all, they won't understand why people will not give a flying fox about them when they end up losing their shirts through sheer pig ignorance. They have had literally years to get out of BTL. They have sat there happily while HMRC have painted targets on their asses. 

The fact that there are heavily indebted landlords (could name many but won't) who are just sat there while the tide comes in, just shows how thick some of these people are. Logically they should be campaigning for increased tenants' rights as they'll probably end up tenants themselves before too long!

[oatbake]

Just now, TonyJ said:

I think the government realises they have no public sympathy. The ATTT campaign has hardly snowballed, I had never even heard of it before. It's completely transparent that the lobbying is by the LLs, in the interests of the LLs. Anyone with half a brain can see the dishonesty in claiming it is fighting for tenants - which probably doesn't really help their cause. 

Yep, I follow their page on FB as I like to keep my finger on the pulse. Recently there has been a big increase in the apparent desperation to cling to any piece of evidence that suggests that S24 is causing any kind of harm. Taking an objective view, it is hard to come to that conclusion. They go on, ad nauseam, about increasing homelessness as if the sole reason for this is landlords having to sell up due to tax changes. If this were true, rents would be rising to keep up, as the supply side dwindles...

Instead, the opposite has happened. Rents are falling hard in the South East, and even in my grim northern outpost, there are now frequent reductions in asking rents.

I can only conclude, by this increase in apparent desperation, that some of them are really feeling the pain. I don't imagine they will attract much sympathy when these idiots are the subject of newspaper articles on how they lost everything due to their faith in BTL...

In the meantime, they should be preparing for the next ratcheting up of S24 in April...Can't be long before some of these people are cashflow negative.

 

[oatbake]

Just now, TonyJ said:

If rents are actually falling, it completely squashes their main hope that rents will rise. The desperation that you think you can see is probably therefore real. That recent forum discussions on Property Tribes definitely made it look like they had given up hope, although I'm not sure why they would be encouraging each other to put their properties for sale en masse, unless their next ploy is to actually try to crash the market to try to get more support that way.

1

That is certainly possible, albeit extraordinarily stupid. A housing crash would just mean that they owe even more as their properties get repoed and they're liable for the shortfall. That said, they're probably stupid enough to have not researched this.

Many still probably believe that their livelihoods are over; the reality is actually far worse than that and they will be losing their main homes also. Leveraged BTL was always a massive gamble, and they have had a deck-full of get-out-of-jail-free cards (slashed interest rates, QE etc). Many should have lost it all first time round in 2008/2009.

Judging by the intellectual level of the comments and the sense of entitlement in many of the posts on Parasite118 and Poverty Tripe, most of these chancers would be hard-pushed finding another job (aside from burger-flipping etc) so it's perhaps not surprising that they are grasping the ship so tightly as it sinks...

[oatbake]

Just now, TonyJ said:

I think the group psychology on Property Tribes in the midst of a potentially terminal crisis will be very strange. I doubt those who are facing potential loss of livelihood or bankruptcy, will be thinking very clearly, and will no doubt be looking for any port in a storm. If that port is the hope that if the market crashes before they have sold, the government might relent on s24, it really does shows extreme desperation.

Indeed, it's fascinating from a psychological point of view. It's the perfect illustration of the stages of loss. We've had "Anger" (letter writing etc), now is the "Bargaining" stage (hurting us will hurt our tenants). Many, judging by the numbers of people posting about selling up, are moving onto the "Acceptance" stage and taking pragmatic steps (where they can) to sell up. 

All very interesting to watch from outside, but real "brown trouser time" for those who have leveraged up over the years. Again, you only have to look at the most vocal contributors on PT, P118 and ATTT to see who those are. It must be crushing for them to see their more risk-averse contemporaries heading for the lifeboats!