Mark Carney and the FPC are watching Buy to Let

Reply to the comment left by "Steven Burman" at "16/12/2015 - 12:23":

Steven you've misread my sarcasm. The Government seem to think that hammering Landlords will not result in any impact on Tenants.

I am convinced rents will go up, and that many Landlords will sell-up and evict Tenanats.

I would be more worried about loading the FTB s with loads and loads of debt . 5% deposits loans free for next 5 years then what.
Purchasing new builds at premium prices .
Everywhere else where it use to be grants now loans .
Government in 2018 saying that if you lose your job and have a mortgage then it will be 39 weeks before help with interest on it.
This will also now be a loan and taken back on house sell.
Credit cards 36months interest free credit everywhere
I see personal debt rising skyhigh.

http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/12046604/The-end-for-Britains-biggest-landlord-marks-the-start-of-the-great-buy-to-let-sell-off.html?WT.mc_id=e_DM71131&WT.tsrc=email&etype=Edi_Pfi_New&utm_source=email&utm_medium=Edi_Pfi_New_2015_12_16&utm_campaign=DM71131

Reply to the comment left by "Barry Fitzpatrick" at "16/12/2015 - 13:07":

Barry

Apologies...missed the sarcasm first time round! I think the those that will gain the most are the incorporated landlords who will take advantage of those private landlords who will become desperate to shift (what will effectively become) loss making BTL's. If the market suddenly becomes flooded with property (which it almost certainly will) then incorporated landlords will snap up these properties at below their true market value as private landlords become increasingly desperate to shift them. The result will be a drop in values in the short to mid-term while the market adjusts.

I can't imagine why Osborne would want that to happen? (sarcasm!) I wonder how many of his cronies are directors/partners of these incorporated companies? Jobs for the boys? And a shedload of CGT for the Treasury to boot!

SB

Reply to the comment left by "KATHY MILLER" at "16/12/2015 - 13:28":

They might be selling up but you will always get some buying, some selling depending on where they are in their lives... I think importantly worrying is who these are being sold too.... far east investors...

Note that they were looking to sell before any announcements so don't do any linking.

Outside of the overheated South East, I can see George Osbourne's attack on the PRS having the opposite affect of what he presumably hopes will happen. Where I'm based, house prices have not moved much in 10 years. Discouraging a few private BTL landlords might have a small effect on property values, but it won't help the majority of tenants to afford to buy their own place. Most still won't be able to raise a suitable deposit.

So the net effect? Fewer rental properties on the market, and a bit more inflation in rental prices 🙂

Mark Carney is quite astute.
The Chancellor's squeeze on the BTL market does nothing for first time buyers and creates the ideal conditions for a house price fall. London prices at the high end are already dropping because of stamp duty changes. Are new BTL investors simply going to pay the 3% or will it put some off from buying? Less BTL buyers does not create more first time buyers unless prices fall. A first time buyer who can afford to buy will do so, unless he thinks house prices are going to fall. And of course the squeeze will continue as all those highly geared landlords start facing their losses as the finance costs are less deductible. BTL investors will have a choice. Make income losses or capital gains losses.?
So will Mark Carney have to do something to manage the house price drop? What exactly would that be? Get rid of the Chancellor who created the conditions for it? One thing is for sure if prices do drop it will be a real problem for a lot of people.

Reply to the comment left by "Iain Fletcher" at "16/12/2015 - 16:53":

Maybe he doesn't really care what happens outside London.

I am looking to buy more as strenght in numbers & it will allow me to be a bit more creative with the accounting. I dont want to sell,I just couldn't live with myself paying all that tax to the revenue.

I fully agree with the vast majority of posters on this thread.

One thing Im confused about is Osborne saying he doesn't want a drop in house prices and that he does not expect there to be one due to C24 being phased in over time, yet the government generally says they want to help FTBs onto the ladder - in which case surely a price crash would be ideal? It's exceedingly contradictory.

Then there's the issue that any house price falls never last long, as any common sense approach would tell you. Does anyone remember both pre- and post- credit crunch, people saying they were selling their houses and renting as they could buy back cheaper at a later date? I seemed to come across many people utilising this strategy yet of course the prices were never going to be down for long and those people all got stuck in rented as the big crash never really materialised.

If we had the 'biggest property and banking crash in history' and it made virtually no difference whatsoever to long-term investors, I hardly think Carney can be said to be right in his assumptions. C24 will be far more ruinous, and far more likely to bring about the very situation he says he wants to avoid.