BTL in East Dulwich?

[Penguin68]

So what happens if you use the equity in a BTL to put as a deposit on a residential? Is that a tax complication? - other than taking out an additional mortgage on the BTL I am not sure how else you would release the equity, other than selling it. Loading up the BTL with new debt simply means that when you come to sell you get less - as the mortgage holder gets back the loan. It will both reduce your tax bill, but also your returns. That made some sense when you could claim back mortgage interest on rental income (you could then leverage your borrowing) - which you still can for now, but increasingly less so. Also I am not sure the extent to which lenders will now lend in this sort of scenario. They probably will, but with higher interest and faster pay-back required.

[????]

Blah Blah Wrote:

-------------------------------------------------------

> Or the OP could just sell the home and give

> someone else the chance of owning their own home,

> instead of seeing all their hard earned wages

> going to pay off someone else's mortgage. That's

> an option too.

Such sanctomy......

[Blah Blah]

How is that sanctimony ????. When so many people are struggling to get their first home, and often being outbid by BTL investors, I thinks it's a perfectly reasonable suggestion.

[Cyclemonkey]

I also think it is perfectly reasonable. We have a housing crisis partly because of lack of supply. Now a lot of that is lack of building but also because the favourable treatment of housing as an investment incentives people to hold on to property rather than sell further constraining supply of the type of property first time buyers can afford. I bought last year and it was deeply depressing seeing everything you can afford being advertised as "ideal buy to let investment" and agents and vendors using "well we can always take it off the market and let it out" as a tactic to central higher offers.

[Jeremy]

I wouldn't want to judge. Many of us will be retiring at 70... to an insignificant state pension, and a private pension pot which is barely growing. I can't really blame people for wanting to keep their old flat, rather than go on a one-man mission to rescue the housing market.

[bobbsy]

Completely agree with Jeremy - if you don't have a generous public sector pension there is little scope to build a retirement pot as investment growth is poor and tax relief in this area is consistently trimmed. This has forced investment in other areas which provide capital growth ie BTL as a source of retirement funds - all this helps reduce the burden on the state, yet these avenues are consistently targeted as tax revenue streams.

[Penguin68]

Housing is a limited resource, it cannot both meet the needs of people wanting to own their own homes and of those who wish to invest in residential property (for whatever reason, income today or a pension pot for the future). Unlike many European countries we have created home ownership expectations - so owning rather than renting is the aspirant norm. Taxation is an (albeit weak) attempt to try to balance these two demands. The loss of residential property in the centre of town to foreign (often non resident) investors, who are buying as a hedge against their own economies turning sour on them, and often effectively taking these properties out of the residential market (as no one lives in them) has made the situation far worse, particularly as these investors can afford to apply all the tax dodges going. Some prestige blocks in London are now marketed in e.g. Hong Kong before the UK - some are never marketed in the UK.

But we should not allow exasperation at this type of behaviour to overflow into animus against ordinary joes who want to build a nest-egg for their own retirements in the UK.

[LondonMix]

Exactly (and I say this as someone who isn't a landlord). Anyhow, rents in London are high so there is a need for rental property. Without buy to let investors, buying a property might be cheaper but renting one would be more expensive due to reduced supply of flats for rent. Every renter isn't a frustrated person who wants to buy.

I suppose the need of buyers is more politically important than renters at the moment.

Jeremy Wrote:

-------------------------------------------------------

> I wouldn't want to judge. Many of us will be

> retiring at 70... to an insignificant state

> pension, and a private pension pot which is barely

> growing. I can't really blame people for wanting

> to keep their old flat, rather than go on a

> one-man mission to rescue the housing market.

[theboycj]

Thanks all, great comments from the majority of people, I guess I have a tough decision to make

[Angelina]

I own property but also rent, which suits me fine - due to school location, work.

Also hate being in one place....

Also, once you add on all the interest - it's shocking how much a property actually costs - and well worth checking out before you start - you may find the increased deposit has an impact...

If you then pay extra onto your mortgage, you need to make sure it allows you to repay towards the actual loan, rather than just pay off the interest accumulated.