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PropertyGuru

First Hmo Prosecution

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I wanted to edit this but couldn't so sorry for the bump. The gist of it is fascinating for BTL landlords who think they can 'sell' their way out of NuLab's coming tax raids on them -

"A council in the north-east has become the first authority in the country to use new powers, which began this month, to crack down of rogue landlords.

South Tyneside MBC took control of a rented house after a landlord tried to evict his tenants rather than license the property. Under the Housing Act 2004, high-risk houses in multiple occupation must be licensed. Landlords are not allowed to evict people in order to escape licensing."

and there's more.

"Redditch Borough Council says it still needs to hear from more than half of the landlords of larger houses with multiple residents.

Landlords have been warned they face fines of up to £20,000 if they fail to obtain licences for their bedsits.

Applications must be with the council by the end of the month.

The authority is particularly keen to hear from new property owners who may be unaware of the need for a licence to protect safety and other standards."

http://news.bbc.co.uk/1/hi/england/herefor...rcs/5291114.stm

Edited by PropertyGuru

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yeah - i bet they are! :lol:

this is just the beginning - BTL landlords make a nice fat juicy tax-target.

BTL landlords can't run, they can't hide, they can't leave the country with their assets, they are generally regarded by voters as 'parasites', oh yes. Gordon will have some nice surprises in store for them soon no doubt, as his need for ever more cash to prop up his tame army of voters ('civil servants') !rows...

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this is just the beginning - BTL landlords make a nice fat juicy tax-target.

BTL landlords can't run, they can't hide, they can't leave the country with their assets, they are generally regarded by voters as 'parasites', oh yes. Gordon will have some nice surprises in store for them soon no doubt, as his need for ever more cash to prop up his tame army of voters ('civil servants') !rows...

The other "sleeper" waiting to jump up and bite the BTL market is the built in discretion afforded to local authorities to include smaller properties in the HMO net. You can bet your bottom pound that with Councils strapped from overpaying their tax abusing executives they will be looking at EVERY avenue to raise money apart from inflation (CPI-wise anyway) busting council taxes every year. Not long before every BTL will be paying fat fees to the local authority. :D

It was time to get out of BTL as soon as the first whiff of regulation was fouling the air.

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The other "sleeper" waiting to jump up and bite the BTL market is the built in discretion afforded to local authorities to include smaller properties in the HMO net. You can bet your bottom pound that with Councils strapped from overpaying their tax abusing executives they will be looking at EVERY avenue to raise money apart from inflation (CPI-wise anyway) busting council taxes every year. Not long before every BTL will be paying fat fees to the local authority. :D

It was time to get out of BTL as soon as the first whiff of regulation was fouling the air.

so why do you think the sheeple are still jumping in (record BTL mortage takeout last month)?

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so why do you think the sheeple are still jumping in (record BTL mortage takeout last month)?

Do you think we can believe the CML stats? With yields at an all time low due to bloated prices together with credit tightening it seems odd that record numbers are flocking to the edge of the cliff and actually jumping off? Also, most bears on HPC seem to be reporting record numbers of BTL-like properties for sale in the form of empty blocks of flats etc. Bottom line--I am just not sure if we can rely on VI data as they have too much to lose. You can bet they are reading the US news and dread the same thing happening here again. Its no coincidence that hardly any of our "news" papers are reporting the US crash--in fact I don't think I have seen a single article in our press on the subject yet?? Maybe the Torygraph but that's it.

They said mortgage borrowing dropped 20% in July compared with June and in that month there was a significant amount lent to refinance or MEW. Its hard to separate the wheat from the chaff in which case the VIs are doing a good job covering up the awful truth.

Edited by Realistbear

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BTL landlords can't run, they can't hide, they can't leave the country with their assets, they are generally regarded by voters as 'parasites', oh yes.

Indeed, they're sitting ducks with a lot of nominal gains. Gordon must be gagging to load them up with new taxes.

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Do you think we can believe the CML stats? ... the VIs are doing a good job covering up the awful truth.

I agree they are spinning, but I dont buy this 'conspiracy' idea - I think everyone with a vested interest is pulling in the way that feels best for them - right now that is still 'property only ever goes up'. And I DO think record numbers piled in to BTL last month - otherwise I wouldn't have been able to unload my crappy flats.

People are depressingly stupid - they believe anything you tell them if you say it often and loud enough.

Even if you hit them in the face with a shovel, if you scream 'THAT DOESN'T HURT!" they will still need 3 or 4 smacks before they disagree with you. Or die.

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Or Die...

Lol..

There are probably quite a lot of people in Britain who will rather go under with the weight than do the smart thing and take a loss..

if you tell them they are losing money, expect to hear "Im in this for the long run"

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There are probably quite a lot of people in Britain who will rather go under with the weight than do the smart thing and take a loss..

if you tell them they are losing money, expect to hear "Im in this for the long run"

Its an oh-so-familiar sign that the top is past and gone forever when amateur traders start reclassifying their failed trades as 'investments'.

A long term investment is a short term trade gone wrong.

What IS interesting is that these amateurs have bought places from people like ME, at INSANE prices, where the 'investment' makes no sense even at historically low interest rates. And lets stop even pretending there's any argument over this anymore - interest rates are on the UP worldwide.

There may be a few pauses along the way, but generally, its going higher.

Obviously.

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"But councils have a discretionary power to license other types of HMOs by designating areas within their district for additional licensing"

And you can bet they will!

:)

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"But councils have a discretionary power to license other types of HMOs by designating areas within their district for additional licensing"

And you can bet they will!

:)

However, this does present a dilemma discussed in another forum earlier. That is that all these BTL landlords are doing GB and the local councils job of providing the capital for their housing schemes. The BTLers take on the risk and financing in purchasing the stock and compete with each other depressing the renting costs to the (local) Gov't. If they suddenly start targeting this group in an effort squeeze more money out of them then they risk upsetting the balance. Equally, if they put pressures on peoples ability to leave the market in the event of a downturn what would this mean for prices ? I'm trying to think of another market where there is relative ease of entry but where exit is regulated or restricted by legislation. any ideas ? Of course the best way out of a market without meeting your obligations is bankruptcy - but on what scale would that be!

My own personal opinion is that this legislation was drawn up to tap into the undeclared incomes generated from these properties. A lot of people see BTL as a way of generating an untaxed income. You only have to look at the way local govt require you to declare yourself. Indeed the ads that went out about this legislation were similar to the shambles with tax credits - "you must tell us if your circumstances change" - "if you think you qualify let us know". Indeed in the example cited at the start of this thread the landlord only came to the councils attention because someone went to them to demand rehousing. If they had been doing their job they would have had all the tenants for which they paid registered against a database of properties and therefore landlords. However, I am not stupid enough to believe any local council in the UK works this efficiently. GB is beating the bushes to flush out more money but he may killed the goose that laid the golden egg if he scares people away from BTL.

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I'm trying to think of another market where there is relative ease of entry but where exit is regulated or restricted by legislation. any ideas ? Of course the best way out of a market without meeting your obligations is bankruptcy - but on what scale would that be!

If renting out a place and obeying that law means that you are hemoraging money and can't evict the tenants wouldn't you have the option of not paying the mortgage and getting the bank to repo the place? The Banks can get people evicted where an ordinary landlord couldn't. That could only really be done if the place had equity (which you might get back) or wasn't too far into negative equity.

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The BTLers take on the risk and financing in purchasing the stock and compete with each other depressing the renting costs to the (local) Gov't. If they suddenly start targeting this group in an effort squeeze more money out of them then they risk upsetting the balance.

Ah, charming innocence... the current UK govt are intent on creating the ultimate 'nanny state' where you can't even fart without a form filled in in triplicate.

Child tax credits, work schemes, stealth taxes, laws on what you can and can't do in public (smoking, for example), all they want to do is micromanage your life for you. When the time is right (i.e. all the fools have offered up their hard earned savings in one form or another) then Gordon will happily resurrect social housing.

Its the next logical step on nannystatism.

The state provides, and you are grateful.

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Ah, charming innocence... the current UK govt are intent on creating the ultimate 'nanny state' where you can't even fart without a form filled in in triplicate.

Indeed. Due to the influence of methane on global warming, pretty soon everyone in the country will be fitted with fart monitoring equipment and have to pay for methane credits or stop farting. Shortly afterwards we'll be made to buy extra carbon credits to cover the CO2 produced in our lungs, or stop breathing.

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Indeed. Due to the influence of methane on global warming, pretty soon everyone in the country will be fitted with fart monitoring equipment and have to pay for methane credits or stop farting. Shortly afterwards we'll be made to buy extra carbon credits to cover the CO2 produced in our lungs, or stop breathing.

That's bad news for the property bulls, who are by definition full of wind...

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However, this does present a dilemma discussed in another forum earlier. That is that all these BTL landlords are doing GB and the local councils job of providing the capital for their housing schemes. The BTLers take on the risk and financing in purchasing the stock and compete with each other depressing the renting costs to the (local) Gov't. If they suddenly start targeting this group in an effort squeeze more money out of them then they risk upsetting the balance. Equally, if they put pressures on peoples ability to leave the market in the event of a downturn what would this mean for prices ? I'm trying to think of another market where there is relative ease of entry but where exit is regulated or restricted by legislation. any ideas ? Of course the best way out of a market without meeting your obligations is bankruptcy - but on what scale would that be!

There is absolutely no exit regulation here. There is nothing to stop the HMO owner selling her/his property. They're just not allowed to force the occupants into homelessness to feather their own nest.

Surely these are business people. They should be selling a 'going concern', customers and all. Or are they not very good at building a successful business?

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There is absolutely no exit regulation here. There is nothing to stop the HMO owner selling her/his property. They're just not allowed to force the occupants into homelessness to feather their own nest.

Surely these are business people. They should be selling a 'going concern', customers and all. Or are they not very good at building a successful business?

I think that's the point, many of these aren't business people. They are 'Homes-Under-The-Hammer, property-prices-always-go-up, I-can't-lose, it's-easy-money' chancers.

Whilst all they have to do is collect the rent and watch HPI do their hard work they are fine. Once they have to start acting like business people, with all the attached rules, regulations and red tape that comes with it many may get cold feet - at a time when diminishing yields and lowering HPI are also starting to impact on the sector.

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this is just the beginning - BTL landlords make a nice fat juicy tax-target.

BTL landlords can't run, they can't hide, they can't leave the country with their assets, they are generally regarded by voters as 'parasites', oh yes. Gordon will have some nice surprises in store for them soon no doubt, as his need for ever more cash to prop up his tame army of voters ('civil servants') !rows...

Agree entirely. I suspect it will be the Tories who really put the boot in (they have already declared their own asset preference by telegraphing tax cuts for share ownership ie stamp duty on share purchases). Undoubtedly this lot have kicked in the door with legislation, and hard pressed councils seem keen to get their piece of the action.

I guess all governments screw one section of the electorate. It only makes sense for a new administration to screw the opposing camp. You can't after all, get blood form a stone. God knows these lot have bled listed company assests and pensions and favoured property investors. Reversing that situation seems like a no brainer. Why tax folks whose pips have been squeaking for the best part of 6 years when you can tax folks who insouchianty claim "it's a long term investment", no matter how bad things get?

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There is absolutely no exit regulation here. There is nothing to stop the HMO owner selling her/his property. They're just not allowed to force the occupants into homelessness to feather their own nest.

Surely these are business people. They should be selling a 'going concern', customers and all. Or are they not very good at building a successful business?

Am I to assume a tone of sarcasm here ?

I put forward the proposition that that a significant number of landlords do not declare their income for tax, and that the licensing was an attempt to force this group into registering and therefore allowing the HMRC to provide for this undeclared income. The reference to tax credits is designed to show how little "joined up" government exists and the inability of various departments to share information and calculate tax correctly. It relies almost completely on declarations from the recipients. Article - all interesting but the last paragraph is most pertinent to this discussion. Now, in the article which started this thread the landlord did not want to license his property. If he is running a viable business why did he not want to license ? If he is selling a viable business he just needs to market the property, with tenants and the caveat that the new landlord will need to license it. However I suggest that when this landlord realised that he could now show up on the HMRC system and that he would have to declare the income for tax, a potentially large chunk of this income would be gone, he decided to drop out as soon as possible.

Therefore, you own a property which, by the definition we have laid out, is not a viable business proposition as the rent paid by the current tenant(s) does not provide you with the income to cover your costs ( the assumed reason why you are selling the property - now possibly exacerbated by the additional burden of a tax you did not previously declare). You now wish to sell this property to someone else,in order to stop haemorrhaging money, and the only way you can do this is to sell it at a cost which is low enough to make the proposition viable for someone else (panic sell).

Some legal background on sitting tenants. Therefore I still assert that selling a HMO particularly one that has not been licensed amounts to a market where exit is regulated, perhaps not explicitly but in practise.

Ah, charming innocence... the current UK govt are intent on creating the ultimate 'nanny state' where you can't even fart without a form filled in in triplicate.

Child tax credits, work schemes, stealth taxes, laws on what you can and can't do in public (smoking, for example), all they want to do is micromanage your life for you. When the time is right (i.e. all the fools have offered up their hard earned savings in one form or another) then Gordon will happily resurrect social housing.

Its the next logical step on nannystatism.

The state provides, and you are grateful.

PropertyGuru

I think it a little harsh to accuse me of Innocence. Either GB has the money to buy all the social housing he needs now, in which case explain why he has not, or he must targeting his limited expenditure elsewhere and providing for the welfare state housing in some other way. The proposition that he is getting the private sector to subsidise this (at their loss) by stimulating BTL is reasonable but as no policy document has been published to state such we must derive the conclusion from the evidence before us. It's one possible idea and I'm open to other (reasoned) explanations. I was only arguing that their legislation would be self defeating if cripples a system which has been so lucrative for him.

Perhaps in my innocence you would post the Governments policy document which states their intention to regulate bodily functions as that one seems to have passed me by :mellow:

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PropertyGuru

I think it a little harsh to accuse me of Innocence. Either GB has the money to buy all the social housing he needs now, in which case explain why he has not, or he must targeting his limited expenditure elsewhere and providing for the welfare state housing in some other way. The proposition that he is getting the private sector to subsidise this (at their loss) by stimulating BTL is reasonable but as no policy document has been published to state such we must derive the conclusion from the evidence before us. It's one possible idea and I'm open to other (reasoned) explanations. I was only arguing that their legislation would be self defeating if cripples a system which has been so lucrative for him.

OK, I HAVE to assume you are taking the piss now - NO ONE in his right mind believes ANY politician is driven by ANYTHING other than short-termism.

Your paragraph was very funny though. Well done!

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  • 336 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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