Thursday, March 3, 2016

The National Landlords Association forecasts that half a million buy-to-let flats will hit the marke

Buy-to-let investing just became a very, very bad idea

Merryn Somerset Webb explains that the maths for BTL has changed. And the Chancellor and the Bank of England could well change it further.

Posted by a saver @ 06:30 PM (5559 views)
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5 thoughts on “The National Landlords Association forecasts that half a million buy-to-let flats will hit the marke

  • The comments are a hoot – lots of people postulating the missing homes conundrum, i.e. landlords will sell up and tenants will have nowhere to live. A fair balance of people pointing out the ridiculousness of this luckily. Also the ‘rents will go up’ brigade.

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  • Why would BTL investors flood the market to trigger massive capital gains tax liabilities? So long as their cash flow is good, as the article says, they will go for it, and this is an example of where the market will, where it can, sustain negative yields.

    Supplement the BTL property for a couple years until rents catch up and at the end, you come out eventually owning a property outright.

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  • “Why would BTL investors flood the market to trigger massive capital gains tax liabilities?” if they think they are going to loose money the will race to get out, and some may have no choice, once the ball gets rolling your counter auguments will not stop a stamepe

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  • “So long as the cash flow is good”
    The article says no such thing. It talks about people making little or no money month to month, just holding out for a fat, unearned capital gain. This was my (shameful) experience – naff all made on the best part of a decade’s rent, but c. 400% return on equity when I sold up. This changes rapidly when BTL gets similar treatment as speculating on other assets, e.g. buying shares on margin does not entitle you to deduct the interest from income.
    That said, the winging about landlords being pushed into a loss is scaremongering in my opinion. The heartbreaking examples are all of folk with 80 or 85% LTV mortgages – these are not available now, not sure if they ever have been. Maximum is 75%, with which the sums are very different. These changes are coming in slowly so the rentiers have lots of time to get their LTVs down, and any new BTL mortgages will be subject to much lower LTVs. This is of course assuming that the numpties at the banks have any sense…

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  • orcusmaximus says:

    Is this too good to be true? This is the first house price policy I’ve ever seen which isn’t aimed at inflating the bubble.

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