Morag

Registered with Property118.com
Monday 9th January 2017


Latest Comments

Total Number of Property118 Comments: 6

Morag

8:30 AM, 4th July 2020
About 3 months ago

Eviction ban to end 24th August

Reply to the comment left by CPM at 02/07/2020 - 16:57In Scotland, selling is one of the mandatory grounds, though of course you have to be able to evidence it, by a Home Report , advert, or solicitor's instruction (assuming the tenant resists, which to be fair, most don't: only the rogues). Also, if it's not sold by three months, I think you need to be prepared to offer the ex tenant first dibs, presumably at a reasonable market price. Don't think that will apply to many. On the whole, the Scottish system covers most of the reasons you would want to evict someone, as we all know that Section 21/33 was never used for "no reason". They have also been amenable to adding further reasons that weren't included in the first legislation, such as abandonment. A close family member moving back in is another mandatory reason, ie parent, spouse or child, not cousins or aunts. I think they must live there for at least three months.... Read More

Morag

9:55 AM, 20th June 2020
About 3 months ago

B2L mortgage on house we will end up living in?

Reply to the comment left by Puzzler at 20/06/2020 - 09:17
The One Account acts like a current account with an overdraft facility, secured against your house. The overdraft limit is set using essentially the same criteria as any mortgage, LTV, borrowers' age and income multiples. When it was still available to new borrowers, you could opt for two repayment types; one with a limit which reduced over the term so that you could never fall behind the payments required to pay off the loan. The second option was a fixed facility which remained throughout the term, meaning you would need to plan for how to repay the loan at the end, assuming you kept dipping into it. If you pay all your incomes into it, even if you end up spending most of it again on the usual expenses, you will automatically be making overpayments without trying, and therefore saving interest. This should put you ahead of your payment plan, so you build up credit within the "overdraft" that you can use for whatever you like. We opted for the fixed facility which gave us plenty of reserve for deposits etc. Between big purchases, the balance would come back down rapidly, so we never worried about being in debt at the end of the term. Sadly, it seems few people could grasp how this fabulous and extremely simple mortgage worked, even bank staff. An earlier version which we also had was introduced by Clydesdale Bank. Brokers didn't promote it, banks couldn't convince people about it because it sounded too good to be true. It literally could shave many years and many thousands off any mortgage, without any change in lifestyle, but folks didn't get it. Some went mad and bought ridiculous things with the credit facility, then complained it was dangerous when they found they couldn't pay at the end. Now they've been withdrawn, more's the pity.... Read More

Morag

22:01 PM, 18th June 2020
About 3 months ago

B2L mortgage on house we will end up living in?

We had a One Account, and it was life-transforming. I can't think of a better mortgage, and wish they were still available. The interest sounds high at 4%, but the APR on most standard mortgages is higher than this when you take arrangement fees etc into account. Plus, due to the way it works, if you use it to full advantage, you should pay less interest overall. We used it as our current account for all our finances, and with all the rental income passing through, we saved a fortune in interest and any debit balance came down rapidly, but the credit facility was still there when needed for larger purchases such as repairs, or further deposits. If I were you, I'd enquire how much of a credit facility you could get by transferring the One Account to the new house (worth £250k?), which will depend on the value and your income, age etc. If you can get 70% LTV that would give you a facility of £175k. You could simultaneously apply for a BTL mortgage on your existing house to cover the shortfall needed to purchase the new house ( 250k + 10k Stamp Duty + legal fees etc?£3k). This would be around 90k, but of course, the anticipated rent might enable you to borrow more, perhaps up to £150k or more? The more you raise on the BTL, the more interest you'll save on the One Account, but I'd still go for the maximum facility, as you don't need to use it all at any one time and you only pay interest on the daily balance. Try to get a BTL with no early repayment charges, as you'll probably want to sell it within the time period when you can still reclaim the 3% (£7.5k) extra Stamp Duty. Can't remember offhand if this is still 18 months or now down to 9 months? Either way, you'll get to keep the fantastic One Account, and the transaction can be done as quickly as it takes to arrange the two mortgages to complete on the same day. You'll be able to move into the house yourself immediately instead of renting it for a while and maybe having to evict the tenants. The rent will probably cover both of your ongoing interest payments, and you'll still have your former home growing in value until you choose to sell it. If you buy the new house initially as a rental property you'd have to declare this, and I don't think you'd then be able to reclaim the 3% even if you later move in. Doing it this way will be much cheaper than using bridging finance, and there's no particular time pressure to pay it back or sell up, except to reclaim the 3% in time. If your long term plan is to buy more rental properties, you can use any surplus credit in the One Account for deposits, and the additional rents will again help to reduce the debt and save interest. This is how we accrued ten rentals, as well as substantial works on our own house, using nothing except the One Account allowing us to utilise the equity in our house. We also re-mortgaged a few BTLs in the early years when they were increasing in value, but not sure if there's much mileage in that strategy these days. That's what I'd suggest anyway. Good luck whatever you decide.... Read More

Morag

20:47 PM, 6th July 2017
About 3 years ago

Treasury response to Section 24 report by Dr Rosalind Beck

Reply to the comment left by "Dr Rosalind Beck" at "17/11/2016 - 17:18":

There are so many blatant untruths in this rehearsed response, and the other one below from Tracy Webb, it beggars belief.
1. LLs with higher income receive more relief than those with lower income. No, those with higher costs and lower income will pay more tax under S24. Those who are genuine higher rate tax payers are already paying twice as much tax on their real income, over the threshold, as those on basic rate.
2. Of course tax relief is not available to owners. a) they are not running a business and b) MIRAS was abolished years ago, though re-introducing it would have been a much fairer and more useful way of "levelling the playing field". Why on earth would the government give tax relief to anyone to buy shares??? That is a passive investment, purely for personal speculative purposes, and provides no service or general benefit to society as a whole? Landlords are running a business supplying homes in response to an ever-increasing demand. There is no distortion here of any accepted business or taxation practices.
3) Only 1 in 5 will be affected. WRONG. If 34% of LLs are currently 40 or 45% taxpayers, they will ALL be affected to a greater or lesser degree if they have mortgages, mostly quite dramatically. That's 1 in 3 right off the bat. Of the remaining 66%, many of them will also be shifted artificially into a higher bracket, I'd guess around another third to half of them? I think we're looking at more like 50% rather than 1 in 5. Of course, the phasing in gives us time to plan. Plan what? Incorporate, sell up, increase rents or go bankrupt, making thousands of people homeless while we're at it. Any other suggestions?
4) The two examples given are rare. Aye right. Portfolio landlords may be fewer in number than "accidental" ones, or those with just a couple of properties, but they are the ones who will be hardest hit, resulting in the greatest impact on tenants, whose interests haven't even been considered it seems.
5) To claim that corporation tax relief at 20% is no more generous than S24 20% relief, displays a gobsmacking failure to grasp even the simplest principle of basic business taxation. Or is blatant sophistry. Corporates are allowed to deduct ALL their costs, including finance, before paying their 20% tax on what's left, whereas landlords are to be taxed on turnover, before deduction of their biggest cost. Yes, dividends are quite appropriately taxed, as they represent income, and of course tax is paid on sale of corporate assets, JUST AS IT IS WHEN LANDLORDS SELL THEIR PROPERTIES!
6) Holiday lets are taxed in a manner to encourage tourism! How about encouraging the provision of housing for the workforce and the general population? Is that not at least as important as tourism? And don't get me started on the "stringent conditions" required for holiday lets. Have they any idea of the amount of legislation we have to comply with now?
7) If they can't see the comparison with the Irish situation, and the consequences for the sector, and continue to repeat the mantra about levelling the playing field and tax "reliefs", they must just be too thick to understand it so no point in going over it again. It is worrying though that such people hold responsible positions in the Treasury.
8) Other factors also influence rental prices. Yes, they do. Supply and demand, location, property standard, ability to pay, availability of Housing Benefit, Brexit, and maybe a few more. However, my rents have been virtually unchanged since 2006, and I never increased rent on a sitting tenant. If I could, I'd try for a higher rent when re-advertising, but never by much, and often had to reduce it again to attract interest. Rents were set by what tenants were prepared to pay, and there were enough properties around that they could pick and choose according to their own criteria. Most prospective tenants would tell me my flats were some of the best they had seen, but they still might pick another because of the location or some other reason. However, something strange is happening now. Last year one of my flats vacated, and I was amazed to discover that others in the development were being advertised at around £700 ( had been around 550-595 for ten years ). We advertised at £695 and got loads of enquiries and had it let in no time. Another tenant has just given notice, and a perusal of current comparables reveals they are now being snapped up at £795. I really can't conceive of any other reason for these sudden and dramatic price increases, than the fact that there must be a reducing supply of properties available. I can't think of any other reason for that than Clause 24. Go figure.... Read More

Morag

11:03 AM, 20th May 2017
About 3 years ago

Scottish Landlord Registration - does it work?

Yes Lisa, the Scottish registration system is not overly expensive, and if it worked, few would grudge paying up. Since we started letting in 2006, the amount of regulation has increased exponentially, and it is hard to imagine how tenants could be given any more protection under the law without offering them right to buy, which has also been suggested. However, as you rightly report, anyone who chooses to completely disregard the rules, can confidently expect to get away with it almost indefinitely. The whole problem for tenants is the failure of the authorities to enforce any of the multitudinous regulations that already exist.... Read More