John Constant

Registered with Property118.com
Sunday 1st September 2013


Latest Comments

Total Number of Property118 Comments: 102

John Constant

14:23 PM, 10th December 2018
About 7 months ago

Help with passing property rental to my wife for tax purposes

In my client's situation, it would've raised a whole load of other problems regarding taxation costs etc. It would have been throwing the baby out with the bath water. As I said in my original post, I found a lender who accepted the AST value, rather than what the client actually received in his bank account.... Read More

John Constant

13:08 PM, 10th December 2018
About 7 months ago

Help with passing property rental to my wife for tax purposes

Reply to the comment left by Mark Alexander at 10/12/2018 - 12:11
You are quite right for this particular case Mark, but I wanted to draw your readers attention to the situation where a sole owner passed beneficial rental income to a spouse.
My client did this without fully considering the implications for the portfolio, and left himself pretty much high and dry.... Read More

John Constant

11:12 AM, 10th December 2018
About 7 months ago

Help with passing property rental to my wife for tax purposes

Just a quick note regarding mortgages in this situation. It will not apply to you as such, but similar situations where there are more than 3 properties in the portfolio could leave yourself open to falling foul of the new portfolio income assessment calculations. I recently had a situation where a sole owner had given his wife beneficial ownership of 40% of the rental income. He asked us to remortgage a couple of the properties, but because he wasn't (personally) in receipt of the income, lenders were being ruled out because he didn't meet their portfolio income requirements. Fortunately, I did find one particular lender who accepted the AST value, rather than the received rental value and the day was saved. However, the rate was inferior to that he coud have expected to receive had he kept the full rental to himself.... Read More

John Constant

16:49 PM, 20th March 2018
About A year ago

Should I buy a third buy to let?

Peter,
I suspect that the rules changing that you refer to are the PRA Portfolio rules. These are already in place and you will be pleased to know that you would not be classed as a Portfolio landlord, and therefore, will not be subject to the new regulations.

The new rule is that if you have 4 or more properties, the lender (and broker!) needs to undertake further financial diligence regarding the performance of the portfolio in the background - not just the property that you are seeking to buy.

What constitutes a "property?" Well, it includes holiday lets, properties owned through a limited company, ‘consent to let’ properties and all BTL mortgages owned solely or jointly by the applicant(s).

Alas, there is no easy rule of thumb here to see whether a portfolio is compliant. Every lender has their own method of assessing whether a portfolio is performing satisfactorily or not. Once you are a Portfolio landlord, you really do need the services of a good Mortgage Broker to guide you.... Read More

John Constant

16:35 PM, 20th March 2018
About A year ago

Main residence mortgage compliance on property now rented?

Hi Ian,
you mention in your text "over a period of time", so I assume that it has indeed been quite a while.

If this is the case, is there a rock solid reason why you still have it on a residential basis? I suspect that you are still on the lenders SVR, because the new lender seemed to be in the dark about your situation, until recently. Why not put a BTL mortgage the property? Do you need it on a repayment basis (if that's what it is on at present)? Have you considered Interest Only, as this is purely an investment property now? Chances are, you are probably paying more on a residential SVR than a good BTL rate. Swapping to a BTL mortgage would make the problem go away, and also give you a more appropriate form of borrowing.

If your intention is to keep the property on a repayment basis, you also have the option to take it on Interest Only, but make a monthly over-payment, thereby effectively keeping it as a repayment mortgage.

If you would like to chat through the options, please fee free to contact me.... Read More