Summer Budget 2015 – Landlords Reactions

Reply to the comment left by “Ros .” at “03/09/2015 – 13:19“:

It’s a good and pragmatic letter. I don’t think the government would lose face if they take note of the proposals. I feel generally positive that this can be achieved.

Reply to the comment left by “Ros .” at “03/09/2015 – 13:19“:

Yes I agree, the RLA letter is very good. Nothing new in there but it is well constructed. It certainly shows the PRS are all singing off the same hymn sheet.
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Reply to the comment left by “Ros .” at “03/09/2015 – 13:19“:

HI Ros

I have left the following comment on below the RLA article:

The letter from the chairman of the RLA to George Osborne makes the point that letting is a business. His suggestion number 1 seems to be that landlords who are in business in a small way, and so only pay basic rate tax, should carry on as before, but that landlords who are in business in a big way should be subject to the levy of up to 25% on their finance costs. This is illogical and divisive.

Reply to the comment left by “Appalled Landlord” at “03/09/2015 – 14:43“:

Oh, Appalled, that must be the bit where I didn’t understand what was being said (you know my eyes glaze over and I go all Homer Simpson – ‘blah,blah,blah’ – when that happens). If what you say is true, then that is not good and is divisive. On the other hand, I was just so pleased that they weren’t keeling over like they were before.

My guess is that they are taking a view and that they don’t think it would be realistic to get GO to back down on the whole proposal.

If the governments intention really is to stop investors outbidding first time buyers on properties, surely the answer is much simpler. Why not introduce legislation to say that all offers made on a property must made on the basis that it is either a Primary Residence or Buy to Let purchase. The estate agent must then allow the buyer who wants to reside in the property to have the first opportunity to buy.

I have bought over 30 properties and I have never competed with a first time buyer – in fact if there has been competition I don’t get involved and move on to the next property.

Surely there is a simpler and fairer way than to tax people out of business.

Thoughts anyone?

Reply to the comment left by “Manchester Landlord” at “03/09/2015 – 15:39“:

If they want to increase owners and decrease landlords they could

apply VAT to rentals
charge annual fees (eg a national £500 a year licence per rental property)
push banks to reduce max LTV on BTLs to 50%. Push banks to only offer repayment BTL mortgages

These would see a shift towards less renting and more owning but how much of a shift is anyone guess. A result would be higher rents for what remains though.

Also the biggest landlord are the councils and social sector. If they want less renters they really need to sell council and social homes

Reply to the comment left by “Manchester Landlord” at “03/09/2015 – 15:39“:

I have a daughter who is trying to buy her first property and she was appalled to think that I didn’t realise that, especially in London, most houses that she had tried to view have already been snapped up by ‘investors’. When I delved a little deeper, she said that she has phoned to view properties that had come on Rightmove that morning, and the Estate Agents said they had already been sold to an investor (not clear if that was a developer or a BTL).
Her partner also said that he had acquaintances who are Estate Agents who directly call ‘investors’ when a new property comes on, without even listing them on the web.

To be fair, we have all been told that the best way to buy properties at a reasonable price is to get to know the EAs.

So we may not even realise that we are competing with FTB (if in fact we are)….BUT imho changing the tax system is not the way forward. There must be another way….

Reply to the comment left by “Lisa Stux” at “03/09/2015 – 16:54“:

Hi Lisa.
There must be quite a lot of anecdotal evidence both ways; what the Government has not done is any research which gives an accurate picture. If owner-occupiers were competing with landlords in this way in some of the areas where I own properties, there wouldn’t be properties languishing on the market for months. In a very short street where I am considering selling my first house as part of the Big Sell-off, the only house for sale has been on the market for 5 months. Neither landlord nor owner-occupier is interested. I also believe I was not in competition with anyone when I bought my houses – no estate agent rang me up to tell me about them. I walked into the office like everyone else. The only time I was given ‘preferential’ treatment was when I bought my very first house to live in – the estate agent knew what I wanted and rang me up.
I don’t know of any reliable statistics on this issue, so it’s mostly just conjecture.

Reply to the comment left by “Lisa Stux” at “03/09/2015 – 16:54“:

Will it mean that landlords stop buying and that FTB gets a property instead?

Or will it mean house prices go down somewhat and rents go up somewhat resulting in a more attractive yield and hence temping more landlord cash buyers?

Of course if the aim is to try an make things more and more difficult for landlords in the hope of increasing FTBs then the next step is to remove the remaining 20% and also perhaps getting rid of interest only BTL and make them repayment basis. Effectively try to kill off the borrow to BTL market making BTL only possible with cash purchases.