25% Rent increase

[bawdy-nan]

Pop your glasses on, (down the back of your armchair, where warriors lose them?) pop9770 - not my comment ...

pop9770 Wrote:

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> DovertheRoad Wrote:

> --------------------------------------------------

> -----

> > I have it on good account that rents on flats

> are

> > actually starting to fall slightly in East

> > Dulwich. More and more people seeing better

> value

> > in other nearby and less family orientated

> areas.

>

> Nonsense bawdy-nan and my neighbours are not

> seeing that clearly there's an impact.

>

> As this new tax only comes into effect from next

> April this looks like the beginning of the

> increasing rents.

> Some landlords are getting going before the

> changes and likely property price collapse.

>

> In my experience when a Tory government messes

> with the property market it always ends in

> disaster.

[Earl Aelfheah]

The policy to end tax breaks on second (third, forth...) properties is right imo.

[pop9770]

rahrahrah Wrote:

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> The policy to end tax breaks on second (third,

> forth...) properties is right imo.

Why on earth would anyone with the slightest bit of logic think that????

When property is an asset,,, no different to land water gold bananas the list is endless.

Why treat it differently from a tax point?

The problem / solution is to deal with the way these assets are financed currently there is upside-down debt system it is structred to give debt to those who pay little or no tax...

A large corporate can borrow to buy huge property or other asset portfolios and pay no tax..

This new tax does the opposite it penalises non corporate asset investment it is bonkers.. It harms SMES and harms JAMS it's bonkers

If you honestly think stopping individuals and SMEs from buying property assets is a good idea and giving all the property assets to large corporations is a better idea we are all doomed to live in a corporate capitalist system run for the few not the many..

Insane

This tax gives the grosvenor estate http://www.grosvenorestate.com tax advantages over You!

Do you honestly think that is reasonable?

I think it's a disgrace.

bawdy-nan Wrote:

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> Pop your glasses on, (down the back of your

> armchair, where warriors lose them?) pop9770 - not

> my comment ...

bawdy-nan

You have seen an increase in your rent NO?

You've confused me...?

[uncleglen]

My relative has worked for an estate agent in east London -where there are many JAMs- for years and she is appalled by the attitude of landlords and the extent to which smallish homes have been divided up over the past 10 years into multiple occupancy -so greedy landlords -yes they are

[Loz]

Yep - predicted almost exactly a year ago that this would happen...

http://www.eastdulwichforum.co.uk/forum/read.php?20,1605258,1605986#msg-1605986

The landlord is testing the market to see if it will take the necessary rise to make BTL still work. If not, they will sell the property.

This is just the start - more of this will happen next year when both new policies kick in. This could potentially take up to 40% of properties off the rental market in London, which is already under a lot of strain. Expect house prices to maybe come down a little in the short term, but rents to go up and up for the long term.

[Jules-and-Boo]

prices will not come down.

BTL properties going on the market attract CGT so landlords will pay more tax than a residential seller would attract and will therefore try and inflate the selling price to cover it.

In London, even a greater supply will not curb prices as buyers include corporations, overseas investors who do not have the same restrictions a normal person does.

[pop9770]

Jules-and-Boo Wrote:

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> prices will not come down

Don't be so sure I remember when prices collapsed in the late 80s early 90s

Supply is increasing just look at all the development cranes and flats going up everywhere.

When confidence goes and given brexit this new tax and recession likely prices could easily fall then banks will stop lending and interest rates will go up.

We're looking at potential perfect storm

...

History repeating itself only with slightly different causes.

A crash is long overdue.

[malumbu]

Love all the expert comment! I've just got rid of a BTL and now totally out of the business after almost 30 years. Hooray. I've seen the market change in so many ways.

I started with a mate buying terraced houses for students to live in. It had many ups and downs, and I started getting rid 15 years ago. This is outside London and I charged below market rent for a good family as tenants until they had a messy split and the messiness also applied to the house.

When I did all my purchasing it was bloody hard to get a loan and none of the usual lenders had BTL products. Then everything changed and everyone became small landlords. Well not quite everyone. Used to love the Grauniad "invest money in BTL for a good return" one week, and BTL landlords, scum of the earth the next.

I paid my income tax and CCT so I did my bit to return the money to good use.

So back to expert advice - government of course gets it wrong on occasions but please don't make simple assumptions about our democracy with the checks and balances through our elected members, Select Committees and (he says quietly) the Lords. Most policies have been analysed throughly and it is only ocassionally that vanity/foolish projects get through (think Poll tax, and for balance bendy buses and Borris buses). If you don't kike the clunky democracy here then try a single party state.

Of course polices may not be for the benefit of the right parts of society, but government is not voted in by all parts of society and will not want to bite the hand that feeds.

Am I the only one already getting fed up of the term JAM? It all comes across as very patronising.

[Loz]

pop9770 Wrote:

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> Jules-and-Boo Wrote:

> --------------------------------------------------

> -----

> > prices will not come down

> Supply is increasing just look at all the

> development cranes and flats going up everywhere.

Supply may be increasing a little (maybe), but it is nowhere near the level needed just to keep up with London population growth.

[Henry_17]

Supply is structurally short of demand which is supportive of prices over the long term. But that doesn't preclude corrections occurring.

[Katy Tonbridge]

Loz Wrote:

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> The landlord is testing the market to see if it

> will take the necessary rise to make BTL still

> work. If not, they will sell the property.

...they will sell the property...which means that somebody down the chain who would otherwise rent will now buy. So the rental population reduces. So why should this force rents up?!

[Loz]

Katy Tonbridge Wrote:

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> Loz Wrote:

> --------------------------------------------------

> -----

>

> > The landlord is testing the market to see if it

> > will take the necessary rise to make BTL still

> > work. If not, they will sell the property.

>

> ...they will sell the property...which means that

> somebody down the chain who would otherwise rent

> will now buy. So the rental population reduces.

> So why should this force rents up?!

There are a few factors, but the main one is that demand is greater than supply for both rental and sales. Another is that people often buy a spare room, but rarely rent a spare room.

Basically, if there was enough housing to go around, then there would be little to no effect. But there is not.

[BrandNewGuy]

Interestingly, even a Labour-commissioned report suggests that lack of supply is really not the story:

http://www.independent.co.uk/news/business/news/lack-of-new-house-building-not-to-blame-for-soaring-house-prices-a7419361.html

[pop9770]

Here the Telegraph Calls It what it is .. A NEW Tax !

Why ... Because it was not taxed before ...

http://www.telegraph.co.uk/property/buy/buy-to-let-calculator-how-will-new-tax-reduce-your-profit/

My big problem with this new tax is that it is biased and creates a property tax system which benefits large corporations (who already have many other advantages) against SMEs and individuals.

In 2014, two million private landlords owned and let five million properties in the UK (Paragon)

Imagine the impact as they begin to sell up!

I think it'll be a shock and it will begin a recession.

But I could be wrong .. the numbers involved a huge and I don't think any sector could cope with a tax change like this not even the UK property market which is often on a debt knife edge ..

If YOU as an individual want to invest in property (and why shouldn't you) you are placed at a large disadvantage when compared to as I have mentioned The Grosvenor Estate (a billion ? tax avoiding lord muck owned corporation) how anyone can think that is reasonable acceptable and balanced I really don't know.

Basically YOU and I are allowed one property tax free and McLandlord Corp and Lord Muck who inherited a billion ? worth of central london get to avoid this tax no matter how many houses they own !!! ... Bloody Disgusting

Anyone who thinks this tax is fair or good is bonkers or simply doesn't understand what a fair tax system should do ...

It is yet another tax that splits society it gives the rich more and more wealth and creates an unbalanced financial system.

There is no longer a business that an individual like YOU or ME can get involved in where we are investing on an equal level with a corporation or Lord muck billion ? tax avoider.

And everyone wonders why there is a huge gulf between rich and poor ... and everyone moans about the JAMs

A. It's because of idiotic taxes like this... taxes which favour the rich over YOU and ME ...

To be completely clear this is taxing the turnover not profit !!!!

There is no other business that is taxed on turnover it's totally insane ... !

Why would any government want to destroy opportunity for investment the two million + private landlords are being attacked and the corporate landlords are not .. Bizarre ..

[DaveR]

"Interestingly, even a Labour-commissioned report suggests that lack of supply is really not the story:"

The report needs careful reading - it is not primarily a report into pricing (either buying or renting) but into declining rates of home ownership, particularly amongst younger people (28-40). The key conclusion re supply is this:

"an excessive focus on the home ownership

rate in isolation from other tenures risks obscuring the

fact that greater levels of supply unambiguously lowers

housing costs for both renters and owners ? something

that is more likely to boost their wellbeing than any

specific rate of home ownership"

Edited to add - I have no doubt that the underlying economic modelling was done with scrupulous professionalism, but I couldn't help noticing that the named author of the report i.e. Mr Redfern will be very happy with the headline "Supply problems not the cause of the housing crisis". He is CEO of Taylor Wimpey, one of the UK's biggest housebuilders, and one of those routinely accused of artificially limiting supply to keep their margins up.

[Jeremy]

Katy Tonbridge Wrote:

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> ...they will sell the property...which means that

> somebody down the chain who would otherwise rent

> will now buy. So the rental population reduces.

> So why should this force rents up?!

Whether it will "force" rents up remains to be seen. But it will certainly result in many landlords attempting to raise the rent (as explained, the alternative is to sell).

Not sure what to do myself. I suppose just sit tight... see exactly how much money I'm going to lose, and whether I can mitigate that with a different type of mortgage.

[pop9770]

I was looking to buy a BTL for investment, pension & because it was better than money in the bank or in stocks and shares

AND just as I've got to the point where I can. Osbourne brings out this bomb shell.

Now I'm left with moving to a bigger property .. which I don't need don't want "except I might move where the aircraft noise isn't an issue but then I'd miss friends and family I'm from here" or other investment options which I don't like as they are all too risky.

Now if I go with a BTL I'll be paying tax and making a loss on my investment.

Increased rents will be the only way to fix this the fact that lots of landlords are rabbits caught in the on coming headlights is standard denial of facts..

This is a slow motion train crash and a crash is never good.

[cerv]

Remains to be seen what will happen but if it releases more supply long term for first time buyers (which appears to be the intention) then it's a good thing in my book. If rents increase drastically in the long term then it's backfired.

Here's what has happened as far as I can see (in London)... those who have had a property of their own for around 10 years or more have been enjoying record low interest rates while their house prices have risen. This has allowed those on a solid financial footing to save plenty and perhaps unlock a bit more cash with remortgaging. But those record low interest rates make savings accounts a lousy place to put their money. And so the number of people piling in to BTL as an investment goes through the roof. And of course they are buying up the smaller 1-2 bed properties as that's all they can realistically afford. This then cuts off the first rung of the property ladder for most.

You can still invest in property as an asset class without having to buy property outright. And if anyone really wants to get into property as a business then they can do just that: set up a business and they will be exempt.

[Earl Aelfheah]

It's actually pretty outrageous that at a time of housing shortage and prices well out of the reach of your average person, there have been tax breaks on offer to those who wish to own more than one property / speculate. I think it's a long over due change. I don't often give credit to Osbourne, but this is the right policy.

[pop9770]

Oh yeah a genius policy

Rents go up

Prices short term go down,, then continue going up as there's insufficient supply

Billionaire property owners get even richer

Corporate landlords dominate the market and can push rents even higher

Genius

Absolute genius

Meanwhile everyone else puts their money in the bank making a net year on year loss as inflation eats away or they buy property and pay a tax on turnover.

Hilarious how can any investment work or any market work when investment is taxed on turnover.

You're all bonkers..

[Angelina]

I don;t know - you buy a BTL - someone pays most off most of the mortgage for you and you end up with the property.....

[Earl Aelfheah]

Young people want the possibility of maybe being able to one day buy their own home. As long as there are incentives for those already on the ladder to hoover up more and more properties as BTL it's never going to happen. Of course BTL isn't the only problem but its certainly part of it. The number of BTLs have more than doubled in the last decade and it's mainly those smaller flats which should provide the first rung on the ladder which are being sucked up.

[Loz]

Angelina Wrote:

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> I don;t know - you buy a BTL - someone pays most

> off most of the mortgage for you and you end up

> with the property.....

... says someone with apparently zero idea of the finances of BTL.

[pop9770]

Yes well now YOU and I don't buy a BTL unless we want to lose money.

As I have mentioned property like everything else is now a big boys game.

Individuals have zero change of investing directly in property where before there was a lack of decent rental property available now given the 2014 figures there are 5 million BTL properties ie 5 million available for tenants.

What's the future with this new tax .. Probably higher rents as it'll be run by big business.

Will first time buyer be any more likely to be able to buy I doubt it because they will continue to spend their money on travel dining out and a party life style most can't afford and don't want to buy at least not until mummy and daddy give them a deposit as for the JAMs they will never be able to save a deposit as they are JAMs at the end of every month they are lucky to have 1p in their bank accounts.

SO this crazy tax is fixing nothing it's only reducing the housing stock increasing rents and benefiting largs companies and disadvantaging savers and individuals who want to invest in property by making property a unique asset class.

As I've said above YOU and I can no longer invest in property on an equal level to Lord Muck of X or some mega property company. That is very very bad and it sets a crazy business precedent.

Just imagine if you setup a small business selling widgets and you get taxed on turnover and you can't offset your rent and storage costs against tax .. bonkers and that's what this loony tax has done it taxes turnover ... mad

Pay Day loan companies are OK no tax on turnover and BTL is evil so tax the turnover .. we're in a bonkers world .... !

[cerv]

You absolutely can invest to an equal level. Set yourself up as a company and you will be exempt. That is how they operate.

Your comments on FTBs and JAMs are pure trolling. You have no idea.