Summer Budget 2015 – Landlords Reactions

Support for Mortgage Interest

SMI, the payment which assists out of work households with the cost of mortgage interest payments on certain loans and which has recently been reduced, will be converted into a loan. Loans will be repaid on the sale of the property or when claimants return to work. This new system will apply from April 2018. The waiting period for SMI is currently 13 weeks. From April 2016 this waiting period will return to its pre-recession level of 39 weeks, meaning homeowners will need to be in receipt of qualifying benefits for 9 months before they will get any assistance with their housing costs.

– See more at: http://housingrights.org.uk/news/housing-announcements-2015-budget#sthash.unG1wvBl.dpuf

It now appears going forward its loans for everything which have to be paid back.
If people have lots of loan repayments how are they going to pass for a mortgage?

According to an analysis by estate agent Savills, commissioned by the LGA, extending right-to-buy to housing association tenants will cost £6bn over the next four years as almost 100,000 households take up the offer.

It is forecast that 24,000 housing association tenants a year will be able to afford buy their home, with an average discount of £63,271, costing a total of £1.5bn a year.

Most tenants taking up the right to buy (91%) will be purchasing their home for less than £100,000.

Ministers say housing associations will be compensated for the discounts from money raised by forcing local authorities to sell off their most expensive housing stock when it becomes vacant. They say the plan will ensure “one-for-one replacement” of affordable properties sold.

As with climate change there are but three options, we:
CHANGE or
ADAPT or
SUFFER

So it is with CLAWS 24 (no pun)

Seems unlikely that GO is about to CHANGE or U-turn anytime soon, from the MP’s replies. Narcissistic Sociopath, clever, cunning and the consummate career politician, seeking DC’s shoes, etc, perhaps.
Or we ADAPT to ‘Generation Rent’ insisting on becoming ‘Generation Sofa Surfer’. Rents will have to rise 10-25%. If HB tenants can’t pay, will LL’s subsidise them and make a loss? Not a long term viable business plan. (Financing costs being taxed as profit, SLDT, Licensing, repairs, insurance, voids, council tax when empty, damage/eviction costs/penalties, Agency fees, advertising, gas checks, monoxide and fire alarms, etc etc)
LL’s suffer, Tenants suffer rent rises, HB tenants face s21, and extreme difficulty in finding anywhere, they perhaps will suffer most from George’s cunning plan. (But why should he care about them, they were never going to vote for him anyway. We and the 70 or so Tory MPs who are LLs are too small to worry about, so long as it sounds ‘popular’ to the masses, he will be happy.

This I think, raises several questions.
What if all BTLs had never been bought, what difference to house prices? Probably not much.
What options would HB claimants have had, and those not wanting to buy for numerous reasons? Minimal choice from large profit oriented companies.
If many BTLers sold up, what effect on house prices? In London they sit on decent returns, many other areas there has been no gain since pre credit crunch. Prices may hardly be affected, with 330,000 immigrants wanting accommodation each year and 400,000 homes to be built in the next 4 years, demand is the main driver.
If however prices crash, are those on HB about to snap them up? Nope. And those who could potentially buy, would they – in a falling market? Like deflation, they would hold off buying, until they finished falling. Hardly the economic stability UK plc deserves.
Are there other more efficient ways to organise many portfolios into Funds, Unit Trusts OEICs etc? (Say 10 – 100 or more investments, under one roof as a mutual?)

Reply to the comment left by “KATHY MILLER” at “13/12/2015 – 16:12“:

I don’t think anyone really believes that’s going to happen.
The HA will be forced to sell, and there will be no replacement stock.
I really, honestly, feel sorry for the LHA tenants. GO and the Tories in general have completely shafted them.
Where are they going to live?
Time will tell…

Reply to the comment left by “Chris Byways” at “13/12/2015 – 21:19“:

Superb comment Chris, spot on!
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Reply to the comment left by “Worried by Budget ” at “13/12/2015 – 21:51“:

I spoke with a homless advisor at council regarding C24 and one of my tenants whom I have given notice to. We agreed that the tenant will be waiting for the baliff before I got the house back. I asked her where she thinks all these people will go. She said they do have temp accomodation and they will be using that although its not in this town .
Tenants have to be prepared to move. Some will sofa surf with parents/friends instead. But if they are offered a place and refuse then the council have done their bit.

What was DC saying family matters they need to put down roots, then hes going to limit council tenancies and force families into temp housing 20 miles from their work and schools.
I have tenants that have been with me for years certainly longer than 5years?
I wonder if instutionals start offering 10year tenancies to entice the tenants to them, probably another deal the government have done somewhere down the line.

Quite so Kathy, guess homless was homeless not ‘gormless’ 😉
I wonder how much more/less the alternative accommodation was going to cost the Council?

And if there were children that is mighty unsettling, and work or travel for the tenant for the 20 miles.

As you agreed to wait for bailiffs, I do hope the rent is being paid during this time!

But sadly this is likely to happen more and more.

Where are all the LHA tenants going to live?? Perhaps you should ask Shelter that question since they supported the tax change and they are supposed to be supporting the most vulnerable in our Society or perhaps they are blind.Sooner or later the sh*t is going to hit the fan and the Council’s are going to be faced with some very large bed and breakfast bills.

Reply to the comment left by “Bill Morgan” at “14/12/2015 – 03:25“:

Everyone here should contact Shelter and Crisis, asking them that.

Reply to the comment left by “Bill Morgan” at “14/12/2015 – 03:25“:

Yes I agree this is going to hurt the tenants (more than it will hurt me.). My tax bill will go up horrendously but i can absorb it as an additional expense still make money and still have a roof over my head. But the tenants will inevitably lose the roof over their head and be farmed out to B&B and low grade hotels in my case 10 miles out of town as there is not enough supply in my home town.

The taxpayer then pays for this bill at twice my LHA rates and also the taxpayer pays for taxis and buses to ship their kids back to school each day and to the doctors when their health suffers . 12 years ago I took in a family featured on the front page of our local newspaper as costing the taxpayer £1400 pcm in B&B I gave them a home at £700 pcm.
The B&;B bill was 6K for 17 weeks . They are only legally meant to spend 6 weeks before being rehoused. This is routinely exceeded by government as there is no supply. It will get like this but 10 times worse.

Any contact i have attempted to make with Shelter to explain this is unfortunately rebuffed. They see me as sleeping with the enemy and are not geared up it seems to take a long term view of this. They are unwilling to work with us for the benefit of both our mutual client base. The councils are the same in the main but they just dont have the human resources to deal even if they are sympathetic to the cause

It will take 2/ 3/ 4 years for the full effect of this private landlord cleansing policy to become clear and appreciated by the public at large by which time it will be too late for landlords who have sold up, too late for the vulnerable tenants whose lives have been wrecked and too late for the beleaguered taxpayer who ultimately will foot the bill.
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