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Realistbear

B B C Radio 2 This Morning

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BTL is pricing out FTBs (Radio 2)

No link, but I heard it on Radio 2 news this morning at 7 a.m. Someone is finally waking up to the blindingly obvious fact that the Miracle Economy is not the benign dispenser of all good things the sheeple thought. Could the worm be turning?

On a related topic:

http://news.bbc.co.uk/1/hi/business/5129592.stm

Law change looms for landlords
MONEY TALK
By Ray Boulger
Senior technical manager at mortgage advisers John Charcol
On 6 July new rules governing the upkeep of large rental property, such as student houses, in England come into force.
Initial indications are that the
fee
will vary enormously from authority to authority, with a range of £100 to
£1,100 so far reported
.
Local authorities will also have the discretion to require other HMOs to have a licence
.
This huge variation in the cost of licences across the country will mean that location will now become even more important when considering the purchase of a buy-to-let property.
There appears to be little apart from the fear of regulatory action to stop a local authority increasing this fee on a whim.
Landlords can be subject to a
fine of up to £20,000
if they own an HMO after 6 July and do not have a licence.

Once regulation, license fees and the "whim" of the exchequer bites it will end BTL as a viable money spinner. Make no mistake, the government will expand the fee system to ALL BTLs. Gordon giveth and Gordon taketh away.......................... :lol:

Edited by Realistbear

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The non-transferable part is a bit of a bugger and reminds me of HIPs:

Licences for each HMO will be specific to the landlord ....The licence will not be transferable, thus the new landlord will have to meet the costs of obtaining a new licence. .... a range of £100 to £1,100 so far reported.

For a definition of HMO see House of Commons or as a short hand see RB's ref at the Beeb which states:

An HMO is defined in the Housing Act as any building in which two or more families/individuals share basic amenities.

An HMO which automatically requires a licence is a house with three or more storeys which accommodates five or more people unrelated to one another.

Local authorities will also have the discretion to require other HMOs to have a licence

And this part sounds interesting:

As part of this new licensing regime, local authorities will have to carry out basic checks on individual landlords, in particular to make sure they do not have a criminal record.

IA-06-28-2003-van-Hoogstraten-02.jpg

"Nick, nick." ;)

BUT, for a really juicy spin:

As a result of these new regulations some investors will avoid buying HMOs, which will force up rental yields as less of this type of property becomes available for rent.

When the reduced supply of properties drives yields up far enough to cover the extra costs, investors will return to the HMO.

Right .... and yields couldn't possibly rise because of falls in capital values of all these HMOs that may make their way on to the market??? Oh! Stupid me, what am I thinking : prices only ever go up!

Edited by Sledgehead

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Once regulation, license fees and the "whim" of the exchequer bites it will end BTL as a viable money spinner. Make no mistake, the government will expand the fee system to ALL BTLs. Gordon giveth and Gordon taketh away.......................... :lol:

It seems inevitable really. If I was a BTL, I would want to get out now before the rush.

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Thing is though, this isn't targeting who I regard as the source of the BTL problem (not that it was ever intended to be). I don't think the vast majority of the new amateur BTL brigade are buying HMO property. The impression I get round our way is that these guys just buy a flat or a 3 bed terrace and rent it out as is. Besides, repartioning the houses to make them suitable for HMO is probably beyond their armchair investment ability.

I think the only way this legislation will affect BTL as a whole is if enough Fear Uncertainty and Disinformation is generated such that the general opinion is that the law applies to all BTL and thus makes is appear less rosy.

IMHO the only people hit by this number will be the more established operators *cough* *TTRTR* *cough*.

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Guest Bart of Darkness

B B C Radio 2 This Morning, BTL is pricing out FTBs but the government has a plan

This plan probably involves ministers buying more BTLs using dubious "allowances" and expenses.

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Guest Alright Jack

When governments try to impose taxes on industry, it is the consumer that pays them. As a renter you shouldn't look to this news as helpful. I know it's not what you want to hear, but that's how I see it.

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Yawn..you are really scraping the barrel Realistbear

had all this before...self contained flats(the bulk of BTL's) are exempt from HMO's ..this is clearly spelt out in the legislation...councils cannot extend HMO legislation to cover them even if they want to

HMO is a non issue, bTL is here to stay ....

Edited by mercsl

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When governments try to impose taxes on industry, it is the consumer that pays them. As a renter you shouldn't look to this news as helpful. I know it's not what you want to hear, but that's how I see it.

My father was driven out of the confectionary manufacturing business in the 1960's due to the imposition of taxes on all and sundry. In the end his profits were going to the taxman. Similar fate awaits BTLers. The government has set up a nice business with thousands of punters owning his future source of revenue. And governments LOVE to hit landlords hard because no one has sympathy for them.

If you own BTLs you should get out quick, the tax honeymoon is over.

Yawn..you are reallt scraping the barrel Realistbear

had all this before...self contained flats(the bulk of BTL's) are exempt from HMO's ..this is clearly spelt out in the legislation...councils cannot extend HMO legislation to cover them even if they want to

Sadly, this seems to have been covered by a very canny Scot. A major future source of revenue is BTLers and Gordon has built in all kinds of discretions to extend the net. Have you ever known a Labour government, Nu or otherwise, to do differently? Parliament has a discretion to do as it wills and rasing taxes on BTLers will not shed too many tears among the voters:

Initial indications are that the fee will vary enormously from authority to authority, with a range of £100 to £1,100 so far reported.
Local authorities will also have the discretion to require other HMOs to have a licence
.
This huge variation in the cost of licences across the country will mean that location will now become even more important when considering the purchase of a buy-to-let property.

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Realistbear you are a dreamer....

http://www.rbkc.gov.uk/EnvironmentalServic...nsing_intro.asp

specific exemptions are self contained flats ...read it yourself ..there is NO discretion for councils to extend to these properties even if they wanted.....please get your facts straight before getting the bears all excited

Gordon will more likely be at your pension funds again before he hits me sweetie, at least we can put rents up a bit and any charge is tax deductible if they ever had one :)

Edited by mercsl

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Guest Alright Jack

Realistbear you are a dreamer....

http://www.rbkc.gov.uk/EnvironmentalServic...nsing_intro.asp

specific exemptions are self contained flats ...read it yourself ..there is NO discretion for councils to extend to these properties even if they wanted.....please get your facts straight before getting the bears all excited

Gordon will be at your pension funds again before he hits me sweetie, at least we can put rents up a bit and any charge is tax deductible if they ever had one :)

You're really hitting on something here, and it's the sort of thing that the RB types are apparently blinkered too. Sure, holding real estate has its risks, especially with all the leverage involved but what about the tremendous currency risk? Holding cash is REALLY stupid to my mind right now given the government is picking every pocket it can - you allude to the pension funds, which are in grave danger right now too.

Think about it RB, why was [FIAT] cash invented in the first place? There is a reason for everything, what do you think it is?

Further, the government will be forced to put a floor under any house price falls. They did it in the early ninties and they have FAR more reason to need to do it again. In fact, I suspect this already happened back in 2004 - 2005 when it disinflated. Looked rather shakey for a mo and then, a miracle!

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Guest prudence

Even Paragon - the BTL mortgage specialists - has had to admit that yields are falling. Unless there are continuing capital increases, your money would provide you with a better - even if it is paltry - return on deposit, hassle-free.......... ...............

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You're really hitting on something here, and it's the sort of thing that the RB types are apparently blinkered too. Sure, holding real estate has its risks, especially with all the leverage involved but what about the tremendous currency risk? Holding cash is REALLY stupid to my mind right now given the government is picking every pocket it can - you allude to the pension funds, which are in grave danger right now too.

Think about it RB, why was [FIAT] cash invented in the first place? There is a reason for everything, what do you think it is?

Further, the government will be forced to put a floor under any house price falls. They did it in the early ninties and they have FAR more reason to need to do it again. In fact, I suspect this already happened back in 2004 - 2005 when it disinflated. Looked rather shakey for a mo and then, a miracle!

We now live in a global economy. What Gordon does with IR has no consequence if the BoJ decide to call in their loans through higher rates (next week looks likely for a hike from our creditor). If the US goes into recession it will impact Europe and a recession will follow here making it difficult to collect rents and impossible to raise them. The government will not have the funds to bail out this current bubble as its debt is already too high according to the guidelines and the numbers are way beyond the government's ability to contain a crash.

The Great Crash of '89 lasted 7 years and the government were powerless to do anything about it. What were they going to do? Pay peoples' mortgages? They will let it bust and try to blame the world imbalances caused by the Japs introducing too much liquidity into the world banking system.

If NuLabour were to survive a market correction you can count on them taxing everything in sight and especially the socially unpopular classes of which landlords rank number 1. The authority to regulate and tax is just a discretion away and maximum fees for a license can be guaranteed. In a recession tenants are going to be skint as jobs will be lost. Nottingham is a good example--see thread. Who is suffering most in that area where the recession has already begun? BTLers.

True everything has its risks but property is at the top of the list now because it has had a long run and the market is broke, exhausted and facing an economic downcycle coupled with IR hikes. The worst of all worlds. If you can hold on for 10+ years you may do okay but for the foreseeable future things are going to get very rough.

FIAT curreny has been around since the Babylonian Empire. Gold comes and goes in favour. Boom and bust is its game. Buy low and sell high and don't hang on too long. No one trusts gold for the long term as it is too volatile. IMO, the key is diversification and avoid property and sterling. Warren Buffett is in utility stocks and out of property and commodities so there might be smart move.

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All Right Jack

"Holding cash is REALLY stupid to my mind right now given the government is picking every pocket it can - you allude to the pension funds, which are in grave danger right now too."

nothing wrong with holding cash as once the crash kicks in big time this cash will go a long way with property but a smart guy would buy euro's or something else for now as the USD$ will drag the GB£ down.

Holding property in the UK is REALLY stupid but not cash my friend.

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It's been said on here before that BTLs are a cash cow waiting to be milked.

They'll introduce these sorts of measures, first for HMOs then for other types of flats, and say it is to "protect vulnerable renters", when clearly it is a tax-raising measure. The more councils can raise their own revenue, the less cash they need from central government.

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It's been said on here before that BTLs are a cash cow waiting to be milked.

They'll introduce these sorts of measures, first for HMOs then for other types of flats, and say it is to "protect vulnerable renters", when clearly it is a tax-raising measure. The more councils can raise their own revenue, the less cash they need from central government.

Slightest sign of recession and we shall see the imposition of:

RENT CONTROLS

The hated Landlords will be the no-brainer target for more taxes and a ballot-box winner. If there was ever a last warning to get out of a bad investment class, it is this. Like all sure fire get rich schemes they don't work here.

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All Right Jack

nothing wrong with holding cash as once the crash kicks in big time this cash will go a long way with property but a smart guy would buy euro's or something else for now as the USD$ will drag the GB£ down.

Holding property in the UK is REALLY stupid but not cash my friend.

Cash is King !!

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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