Buy-to-let investing just became a very, very bad idea

The maths has changed. And the Chancellor and the Bank of England could well change it further

13 February 2016

9:00 AM

13 February 2016

9:00 AM

Take a quick look at the UK buy-to-let market and you might find it tough to understand exactly what it is that makes it so very popular. Dealing with tenants is difficult and boring. House prices have a horrible tendency to go down as well as up (Londoners — ask anyone living in the north of England about this). And rents have long been so low relative to prices that getting a worthwhile net yield is all but impossible after costs.

Given this, you might wonder, why on earth would 14.5 per cent of all mortgage lending in the UK in the third quarter of last year have been to buy-to-let investors? Good question. The answer (as is the case with everything to do with modern money) is that it is all about leverage.

The idea in the mind of the average amateur buy-to-let investor — as I understand it from 15 years of reader emails on the matter — is that as long as you are cash-flow neutral each year (i.e. it costs you nothing) all is well. You’ve put down a deposit. Someone else pays the mortgage via their rent and at the end of 20 years you have a house — for which you have effectively paid nothing but the deposit (assuming you price all the time spent dealing with tenants and admin at nothing). So the two things most investors care about most — yield and capital gains — aren’t particularly relevant. As long as you aren’t forced to sell when the house price is lower than the sum of your deposit, the stamp duty you paid and the remaining mortgage; and as long as the net rent covers the mortgage every month, you’ll win in the end.

But here’s the thing. Once one of those things ceases to be true, the sums change fast. And that’s why anyone thinking of getting into buy-to-let today should think again. In his last two statements, George Osborne has changed those numbers. In the middle of last year he announced that the current system of tax relief for buy-to-let investors, whereby all mortgage interest could be offset against income at the marginal rate and all investors could also automatically offset costs to the value of 10 per cent of their rental income every year, were to be changed.

When the changes are fully implemented (by 2020/21), investors will be able to charge only the costs they actually incur. But more significantly, they will no longer be able to offset interest directly against income. Instead, regardless of their marginal rate of tax, they will receive a tax credit to the value of 20 per cent of their mortgage costs to offset against income tax.


Here’s a quick look at how this works in practice with an example from Brewin Dolphin. A landlord paying tax at 40 per cent has an 80 per cent loan-to-value mortgage. He gets £10,000 in rent and pays £8,000 in interest. On his £2,000 profit he currently pays 40 per cent of £2,000 (£800) leaving him a net gain of £1,200. However, come 2020 his tax bill will be calculated on his turnover minus a 20 per cent tax credit. And 40 per cent of his £10,000 turnover is £4,000. The relief comes to 20 per cent of the interest (£8,000 × 20 per cent = £1,600). The result is a £2,400 tax bill. Add that to his mortgage interest and you will see that his annual profit of £1,200 has turned into an annual loss of £400. Nasty.

Most landlords won’t have mortgages that large but nonetheless you get the point: the changes turn the cash flows around fast. Play with the numbers and you will also see that they can turn 20 per cent taxpayers with property investments into 40 per cent taxpayers without too much difficulty.

All this makes Osborne’s second move — announced in last year’s autumn statement — look particularly unpleasant for wannabe landlords. He’s put up stamp duty for anyone buying a second home — be it a holiday bolthole or a buy-to-let property. Buy after April and your property will cost you three percentage points more in stamp duty than it does now. If you are buying a house at, say, £300,000 that pushes the duty up from £5,000 to £14,000 — a rise of 180 per cent.

The main effect of that will be to reduce the deposit that investors have available when they buy (the more you spend on duty, the less you have for a deposit). So they will end up with a higher loan-to-value — and higher monthly payments — which will make the cash-flow situation even worse than it was likely to be already.

There is a view that none of this matters: a poll last year showed that the vast majority of people still think buy-to-let is a fabulous idea — particularly for retirees. And 60 per cent of landlords told another survey they saw no need to take any action. They might be right. Maybe rents will rise. Maybe the capital gains over the next decade will be so huge that no one will mind the relentless grind of regular annual losses. I don’t buy it. How many people are brave enough or high-income enough to shoulder huge costs on their property (effectively financing their tenants rather than vice versa) in the hope of hitting a capital gains jackpot further down the line? Not as many as the ‘house prices always rise’ brigade like to think.

This is why the National Landlords Association forecasts that half a million buy-to-let flats will hit the market in the next year. I suspect they hope that big numbers like this might make Osborne think again — or at least add grist to the mill of the legal challenge Cherie Booth’s firm is bringing. But I’m certain they won’t. Osborne wants to cool the housing market by making buyers, not sellers, the price drivers. And he wants more youngish people to be able to buy. So, for him, half a million already well-off investors deserting this political hot potato of a market won’t be a shock. It’ll be a thrill.

There is no point in underestimating the ability of politicians and central bankers to get their way on this kind of thing. They may not be much good at the macro stuff (there is no sign that central bankers have a hope in hell of saving the global economy from another meltdown). But changing the dynamics in individual markets? This they can do. They can do it with tax changes like these. And they can do it with the sort of policies that the Bank of England can implement whenever it feels like it (tightening the lending criteria for buy-to-let mortgages, for example).

The Bank of England says its Financial Policy Committee is ready ‘to take action if necessary’. By which I assume they mean ‘if George’s stuff doesn’t work’. So is now a good time to get into buy-to-let? If you want to take on George Osborne and Mark Carney, yes. Otherwise, no.

Merryn Somerset Webb is editor-in-chief of MoneyWeek.

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Show comments
  • https://www.commercialtrust.co.uk Commercial Trust

    The tax changes seem to be more likely about changing the dynamic of the rental sector than discouraging investment. Limited companies are exempt from the relief restriction as they pay corporation tax, rather than income tax, and depending on the final framework, bulk purchases of 15 or more properties are likely to be exempt from the stamp duty surcharge. The government has been talking for years about increasing the level of institutional investment in rented property, and this seems to be a move in that direction.

    I think they overestimate the impact that institutional investment will have, though. Historically, yields are not high enough to attract corporate investors en masse. Construction and management costs can be lowered for large developments to remedy this, but that still doesn’t pique corporate interest in small plots that would traditionally be redeveloped by private landlords. According the RLA, private landlords created around 3 million new homes between 1986 and 2012 (60% of the total).

    We need a market that caters for all tenures; that means sufficient homes for buyers, mobility for movers, and room for both private and institutional developers. I think attacking small landlords is a mistake that will cost the government in the long run.

    • jeremy Morfey

      Indeed. Getting rid of the small landlords will make even more people, who cannot afford to buy “affordable” homes, homeless. There are no Council tenancies without piling it on Council Tax (going up by 4% this year to pay for more Equality & Diversity consultancies for the Childcare industry and “market” renumerations for their executives), and now no Housing Association tenancies, for the same Right to Buy reason.

      Cashing in will be the money launderers, who can avoid tax.

      This is what Conservative Government is all about. Ever more taxes!

      • mdb2303

        For every seller there’s a buyer – at the right price. So no, it won’t make anyone homeless. But some amateur landlords may have to take a cut to their paper property gains and be realistic about pricing if everyone starts selling up all at once.

        • Mary Ann

          Sounds as if it could become a buyers market.

          • Seax

            Always looking for new ways to exploit others are we?

        • Cav

          Yes other larger landlords will buy off smaller landlords.

      • majestic whine

        When small landlords sell – the houses cease to exist. The same way that without BTL landlords buying property the houses wouldn’t exist in the first place.

        When will someone give these savvy wealth creators and benevolent home providers the credit they so richly deserve?

        • robertsonjames

          Don’t be so dim. Houses clearly don’t cease too exist when landlords sell them and prices ease. Only an idiot would claim that they do.

          But many tenants still won’t be in a position to buy them because many tenants’ choices aren’t solely governed by affordability. For students, for people new to an area, for people who are saving, for people who are on short-term contracts, for people just moving out of their parents’ home or out of a failed relationship, and for people in many other situations where they can’t immediately put down roots and where it wouldn’t be viable to do so, rented property is a far more sensible option than buying.

          Accordingly if public policy is to eliminate private lettings the problem then becomes a shortage of rented accommodation to meet these various needs and in the natural course of things therefore a rise in rent levels set by the remaining landlords which is presumably not in the interests of the tenant community.

          I’ve yet to hear a cogent account from militant anti-BTL obsessives as to how that sizeable segment of the population is going to be housed if they get their way and private lettings are expunged from the UK through punitive tax and regulation or even by an outright ban (the latter getting the obsessives particularly excited as they embroider their ignorant fantasy). A few hard Left extremists openly argue that anyone who doesn’t own and buy should be accommodated in council housing: one sees the electoral benefit for the Left to much-increased council estates of client voters but it’s hardly a sensible or a desirable solution for most of the people who for a variety of good reasons wish to rent.

          So what’s the answer?

      • MvR

        They won’t become homeless. They’ll either buy themselves once prices fall far enough, or rent somewhere cheaper from another landlord who didn’t over-leverage.

        • Mary Ann

          If there is a shortage of homes to rent, the rents will go up.

          • majestic whine

            Because the homes will vanish? If there is a shortage of homes to rent it will be because people bought them. Those people will no longer be in the market to rent. Also rents are set by tenants ability to pay unlike house prices which are set by people’s ability to borrow. The BTL landlords wet dream of being able to charge whatever they need is only a dream and the reality is about to become horribly apparent for a lot of them.

          • Seax

            Agreed. Rents are higher than mortgage payments.

            In addition, the housing stock would be better maintained by owner-occupiers and the descent into BTL slums would be arrested.

          • Cav

            Yes correct, attacking small landlords will not help.

          • Seax

            Agreed. BTL should be ended.

          • Seax

            Only if the market is artificially controlled.

            Which ours is.

        • Cav

          Prices won’t fall far enough in the south east to ba able yo buy, the future is now for the south east.

          • MvR

            If prices don’t fall enough for people to buy, what’s left to support them at current levels? Markets can’t stay up without buyers.

          • Cav

            Immigration and high birth rate.

          • MvR

            It’s be a while before those immigrants and new-borns are are in a position support the bubble house prices like we see today. There’s plenty time for a major correction first, whether that be a fast hard crash, or a slow, Japanese-style 20 year slide.

          • Cav

            The immigrants have been buying in the UK for years, they work hard and save.

            I have been hearing price crash since early 2000, we had a correction and we may get a correction again a t some point but not enough to change the direction of travel in our global future.

          • Seax

            You think the South Sea’s bubble is still going?

      • doublehappiness99

        Councils should be able to fund new council housing through near 0% borrowing costs. Councils housing generates a surplus for the council after maintenance costs even at the affordable rents they charge. Surplus can be reinvested. Any properties sold to the tenants through RTB should be at a reasonable price and the Council able reinvest it straight away into new housing.

        With the current crisis this is a no brainer for councils and apparently some are already finding ways around the laws that prevent them from sensibly investing in new council housing. (I heard some council houses are being bought back!!!)

        Imagine no housing benefit or emergency accomodation, and plenty of well designed, affordable rented properties for young adults, families and elderly people – all promptly maintained by the council repair team – the economic benefits from affordable housing and a flexible, mobile workforce are so obvious and so multilayered it really does make you wonder why Councils are constrained and not incentivised to build the homes they need locally.

    • daverave999

      “…private landlords created around 3 million new homes…”
      Built them themselves did they?

      • ButcombeMan

        In many cases, yes. the government does not create HMOs out of big buildings, private landlords do.

        • MvR

          HMOs aren’t “homes”. They’re temporary accommodation for students, travellers or the very poorest in society. They have their place in the market, but they’re not somewhere anyone would choose to live long term.

          • ButcombeMan

            You are wrong
            Look up the definition.
            Of course some ARE student accommodation.

          • MvR

            “A HMO is a house occupied by more than 2 qualifying persons, being persons who are not all members of the same family. A “qualifying person” is a person whose only or principal place of residence is the HMO.”

            See.. not a “home”.

          • ButcombeMan

            There you are, well done. With just a little nudge you managed to inform yourself.

          • MvR

            *rolls eyes*.. I see you’re one of those in denial then. Good luck with your investments! 🙂

          • ButcombeMan

            The denial is entirely yours.

          • Cav

            When I lived in an HMO bed sit I thought of it as home.

          • MvR

            Youre being disingenuous.. When someone aspires to buy their own home and start a family, they’re not talking about a bedsit, and you know it.

          • Cav

            I am telling you when I lived in a bedsit I thought of it as my home, so by your warped thinking it is only a home if it is bought. Utter garbage.

          • MvR

            lol.. talk abut missing the point if the whole article. You guys are funny. I’m getting the popcorn in. This is going to be quite a show once the dominos start to tumble. I hope for your sake that you’ve considered all the risks, and haven’t leveraged yourself into a corner like so many amateur landlords.. good luck 🙂

          • Cav

            Envious fool, nothing to offer anyone.

          • MvR

            Envious of someone with huge debts against highly illiquid bubble priced assets? Envious of the stress and worry about voids, damage, bad tenants, bank defaults? Envious of low single digit yields, soon to turn negative as mortgage payments are disallowed as expenses? I honestly don’t see anything to be envious about.. I just want today’s youngsters to have a future, and not be encumbered to the banks for their whole lives. Wouldn’t you want that for your own children?

          • Cav

            You are an envious fool.

          • MvR

            I’m not the one resorting to childish name calling though am I? Have a nice day. bye.

          • Cav

            No you are the one who is going to get the popcorn in and watch the property crash, you are a disgrace.

          • Das Boot

            I can’t say I’m surprised.

        • Seax

          Out of the kindness of their own hearts.

          I saw a stand alone one car garage converted into such a home. A local builder of my acquantance was horrified at the spiv cowboy work that was done. The damp, alone, would have been hideous for the desperate tenant. I am sure the LL profited nicely. How did this person get planning permission? Did they even bother?

          I also saw, for myself, a ‘rebuild’. One bedsit was a converted corridor. I have never seen the like before. The total greed and selfishness of these spivs.

          It has to end.

          • starfish

            “The damp, alone, would have been hideous for the desperate tenant.”

            So did this conversion follow building regs?

          • cecile10

            Neither of the example ‘homes’ you mention would have received planning approval. The landlords ought to be reported so enforcement action could be taken.

        • Cav

          Also many office blocks turned into flats for rent, all over the UK.

    • Cav

      Good post but don’t expect it to be believed by the terminally hard done by.

    • ButcombeMan

      Yes Good post.
      I will give you a job running the Treasury schoolkids who advise Osborne

  • Fixer

    Yay get the landlords out, the youth are paying a heavy price for their older generations using property as investments.
    Come on sing along.. We hate landlords, we hate landlords..

    • Seax

      The young have seen that there is a party that may support them now. The next election will be the election of the Millenials. The Boomers will choke on their tea cakes when they are abandoned by the powerful who are seeking votes.

      Perhaps this is why the BTLers are feeling pain. It may be the start of the buttering up of the young before the next election.

  • seangrainger

    I think you mean arithmetic

  • Jonathan Tedd

    Read Tim Morgan at surplus energy economics and all becomes very clear. Economic growth is over, kaput. Probably has been for last 15 years. All is debt, lovely premium-free debt.

    • Seax

      The wealth is being extracted from the people. When we are used up the 1% will move on.

    • Johnnydub

      I tried to read that blog. Its a long list of wibble. Pretty worthless.

  • jeremy Morfey

    So where does someone, at the start of retirement, put his savings?

    • Andrew Cole

      Buying shares in massive property portfolio businesses

    • mdb2303

      You would have to be a fool to put it directly in property: I was in the bank the other day and the old chap in front of me, 84 year old, was in tears with the teller because the landlord insurance helpline hadn’t sorted out the leak in his tenant’s flat and “I’m 84 you know, I’m too old to be sorting out these things myself”. A lesson to us all really. If you really want to invest in property do it through a fund.

      • Seax

        No sympathy.

    • MvR

      Dividend paying shares would be a good bet. Not all at once of course – just buy when they are cheap. In the meantime, spread it around various savings accounts. Bonds too once interest rates return to normal. Better still, invest your money, time and lifetime’s experience in helping young people start businesses.

    • Mark

      How about investing your savings into something that builds quality houses where people need them? Does something like that exist in the UK anymore?

      • Seax

        After WW2 we had a massive house building programme. We also had full employement.

        It was possible then after a war, why is it so hard now?

        • ButcombeMan

          There is no shortage of employment now.

    • MichtyMe

      Spend them before its too late, there are nae pockets in a shroud, if any is left after the care home fees.

    • boiledcabbage

      Index-linked bonds.

    • ButcombeMan

      A few selected safe bet shares.

      National Grid is my favourite

    • Seax

      You have savings?

      The young won’t. I doubt you will care though.

      • jeremy Morfey

        Quite a narky comment! How can you say what I care about, since you’ve never met me?

        I acquired a savings habit on my 7th birthday, when I was first allowed to have a Post Office Savings Bank account. Through life, I have never spent unless it was something I needed. Usually I replaced something not because it was old and tatty, as I have become, but because I could not get it to work however hard I tried to mend it. My car is 29 years old in April, and still running and staggering through MoTs.

        What I do care about is when young people, who are diligent with thrift, get more and more into debt because of Governments piling their commitments onto others, in order to reduce Income Tax for cronies. The tuition fees betrayal by Nick Clegg on his core vote, the students, after pledging with all his honour that he wouldn’t, was unforgiveable and his party was duly condemned. It was shameful though that the beneficiaries were the Party who ransomed the Liberal Democrats into it, threatening a run on the banks if they didn’t break their pledge. That makes the Conservative Party in the South-West especially utterly dishonourable, and I consider those Tories who unseated Lib Dems there unfit for election and unworthy of a national institution.

        Now do you still ask whether I care?

        • Alex

          Student loans are not a debt and real young people are not concerned about them – probably because they have looked into how it all works when taking on the loan. When I used to give campus tours you should have heard some of the inane questions the parents would ask. “Will she need to work in the holidays to pay off the debt?”

          Real young people are however very concerned about housing. Living with parents arrests development, wastes our best years, denies us access to the nationwide job market and means we won’t have time to have any kids.

          A rigid class structure will evolve based on tenure type and geographical location.

          Some of Osborne’s recent moves have been OK. New Labour were even worse at housing than the Tories if such a thing is possible.

    • CortexUK

      This is all a circular argument. Because of the house price bubble, the banks and the government only care about property. That’s why no savings account pays enough. Why borrow from you when the bank can go cap in hand to the Treasury/Bank?

      • ButcombeMan

        There is a view, one I hold actually, that low deposit interest on cash stimulates the more entrepreneurial to use their savings more effectively.

        I do not hold cash. I have savings which are easily returning 12% by me working them hard. Of course that is not achieved without some risk.

  • MacGuffin

    It will be wonderful to hear the screams of buy-to-let investors when it really kicks in. If we can get at least 10-20% of the market into negative equity, so much the better. Oh, joy!

    • boiledcabbage

      The banks problem…..

      • Seax

        The banks will only suffer if they have lots of mortgage defaults. No, wait: They will get the State to bail them out if that happens.

        Yay: Capitalism at work.

    • Malcolm Stevas

      Why do you hate buy-to-let investors so much you want them to suffer losses and scream?

      • Seax

        Why do BTLers enjoy exploiting the young and vulnerable so they pay their mortgages for them?

        • Malcolm Stevas

          Anyone who thinks the notion of letting out property for personal gain is exploitation is somewhere on the economically illiterate Left.

          • CortexUK

            It is as good a definition as any.

            Next time there’s a water shortage, I’ll buy up your local supply and charge you double what you used to pay. Let’s hear your views then.

          • Alex

            He would blame it on the government putting too high taxes on water, or too many immigrants coming in and drinking our water, or he would bash a disabled person over the head at the standpipe and steal theirs. Sling a few remarks about “the Left” around and he will feel good and righteous – almost enough to forget how parched his throat is.

          • Malcolm Stevas

            Water supplies are related to BTL? Creative analogy but not credible.

      • Das Boot

        The most likely explanation is that he has rented from a BTL investor in the past.

        • Malcolm Stevas

          Possibly. Was he compelled to rent, I wonder? Did the landlord have bad breath, make intimate overtures (or fail to)..? We’ve all rented accommodation when we were younger and poorer, strange that some should resent it.

      • CortexUK

        Why do BTLers hate the young, the low-earning, families and taxpayers so much?

        BTL has destroyed so many lives.

        • Malcolm Stevas

          I dare say BTL-ers eat babies too. Absurd hyperbole…

    • ButcombeMan

      Misplaced joy if it causes a recession.

      • CortexUK

        Recessions are an inevitable and indeed necessary component of the business cycle. You think perpetual growth is a reality?

        • ButcombeMan

          One of my criticisms of Gordon Brown was that he apparently thought it was.

    • Teacher

      I was the first person in my family ever to buy a property. My parents rented all of their lives and never minded it as it was what everyone did. Why do people now think they have a God given right to own a large property on a small income?

  • Bob

    Mark Carney was very fond of tweaking the mortgage rules when he was governor of the BoC so I’d fully expect him to do the same in the UK. Be warned!

  • Nick

    The situation for landlords doesn’t seem to be so bad if they paid cash for the property and do not have a mortgage.

    The rent still comes in every month and stamp duty when selling the house is the main problem.

    However,if the landlord is say middle aged or elderly and has no intention of selling the property,then things are still fine and the rent rolls in.

    • HHGeek

      The tax credit thing is still tricky, though. Unless I’ve misunderstood, it means finding the full tax upfront, then waiting for the credit to apply later. I’m also going to be curious to see how the wear’n’tear allowance loss impacts the rentals on offer – the only reason for offering “fully furnished” at the moment is the tax benefit, as (at least in the south-east) the rental rate is the same for both furnished & unfurnished.

    • ButcombeMan

      Capital gains tax when selling is THE main problem

      • Grumpydoug

        Why sell? – it’s my pension. Something for the kids when I’m long gone .

        • ButcombeMan

          Well yes , but the point is that Capital Gains tax hits BTL small scale private owners in a way it does not hit Property Companies based in the Cayman’s.. That is if they want to sell one they have developed and improved, to do another

          Osborne is doing his best to destroy small scale business in favour of large business.

          He is interfering in a market, for short term effects when the real problem is too many people, too many households.

          He is stopping small scale entrepreneurship helping solve the housing crisis. This will be because the Treasury schoolkids do not understand what is going on.

          • Grumpydoug

            Very true. Don’t forget, he failed maths AND economics at A level and mediocre history degree – so not qualified to be in charge of the nation’s finances. Not very good at history either – the Irish tried this experiment in 1998 and pulled it in 2002 after rents had gone up by nearly 50% !! … ouch. Rents here already rising in anticipation. We all agree, more houses needed.

          • Alex

            Oh my goodness, how does being a buy to let landlord help solve the housing crisis?! And “developed and improved”??!

            Landlords’ ego defences really are a sight to behold.

          • ButcombeMan

            You have a very narrow view. There are quite a lot of properties out there that need improvement and bringing up to modern standards.

            Do you see something wrong in me buying one, doing it up (often with the sweat of my own brow) , then letting it or selling on and doing another?

            If private landlords do not help improve the housing stock, who will?

          • ButcombeMan

            And if landlord, buys a large, old and decrepit house. Modernises, insulates, redecorates and turns it into four good sound flats, that has created more homes.

            Who else can do that?

          • Alex

            Four prospective tenants could put in a year’s worth of rent money…

            At £500 a month this covers the works between once and four times times over, twice to eight times if 4 couples not 4 singles…

            Cost of works used for comparison comes from a landlord forum, added 100% margin of error for pessimistic estimate…

            Face it, we just don’t need the middle-man.

          • ButcombeMan

            Well the situation you describe I would be in favour of, it just does not happen very much. Self build groups sometimes do it or something like it.

            Yous seem to resent people doing it for themselves. I can tell you it is hard work and one has to learn new skills. A lot people would not face the work. A lot would lack the application to learn the skills.

            It is just fact that without private landlords investing time and money, many properties would not get improved.

        • CortexUK

          Your kids wouldn’t need it if BTL investors like you hadn’t help inflate house prices so much. Ironic, eh?

    • Alex

      Rent should be linked to mortgage payments. If the landlord ends up owning the house outright he should then be forced to sell up. He still gets bought a house off the back of 20 years of his tenants’ hard graft, he just can’t keep it to “earn” rent in perpetuity.

      • cecile10

        Don’t be silly.

        • Alex

          I know, heaven forbid that houses should be for families to own and live in.

      • Nick

        Sorry,can’t agree with you.Me and the missus need the income from the rent to top up my pension until we kick the bucket.

  • boiledcabbage

    After a stock market crash comes a property crash. This time its deflation -maybe a 50% fall in house prices? Look at the affordability, yields, the proportion of income going on rent – all way too high. These tax changes are designed to discourage new BTL buyers – because the Treasury know a deflationary crash is coming. Sovereign debt yields go negative for a reason! Read the signals….

    • Seax

      It is obvious there will be a crash because the Government are desperately pumping up the bubble with taxpayers’ money (the ‘schemes myriad’).

      It is like watching someone doing plate spinning when drunk.

  • Malcolm Knott

    Yet another complication in a tax system that is already grotesquely complicated and will soon be beyond the wit of man to understand: the result of endless tweaking by successive Chancellors from year to year and endless broken promises to reform.

    • Seax

      That is the whole point. The more they create loops the more the rich can have their accountants find the loopholes.

      • Malcolm Knott

        I think it’s more that every year they think of some new wheeze to deal with a short-term problem, lose sight of the big picture, and are always reluctant to introduce any reform which would deprive any group of taxpayers of existing benefits.

  • Alison_Holdall

    When I read accounts of people’s property woes, I’m so thankful that I chose the path I did when I returned to the UK in 2007 from Africa. The way that people are manipulated through education to assume that life will be considered a success only after one purchases a home built of bricks and mortar (whilst never actually owning the land) is laughable around a camp fire. I rent flats, pay three months money up front and that’s it. From then on I use my rights (as laid down by law) and live rent free for 6 months to 1 year. A couple of weeks notice by the courts to inform me of my imminent eviction gives me enough time to take a well deserved holiday in the British Virgin or Cayman Islands come back and repeat the process. Is this immoral? Ask all those with bank accounts in the Caribbean ?

  • Cav

    House prices in the south east will never be affordable to the average earner, even if the long awaited and prayed for crash arrived the prices would still be way out of reach.

    If you want to buy the are many thousands of affordable starter homes all over the rest of the country for under £100,000 and plenty of jobs near them.

    Hoping other people are destroyed in a price crash is sosad to see and hear.

    • Seax

      There are plenty of jobs? So why is London full of Northern, Western, Eastern and Southern UK immigrants?

      • Alex

        A child could see that, in any market functioning at all according to the price mechanism, rent should ALWAYS be SIGNIFICANTLY less than the equivalent mortgage payment.

        Landlords, however, whinge when they can’t earn 7% a month ON TOP of being bought a house for free by their tenants’ hard work.

        • Mike Breen

          How is the 7 percent on top of being bought a house for free? 70 percent mortgage paid plus 7 percent? Please do be serious.

          • Alex

            What are you talking about? The tenant’s rent covers the mortgage repayments, hence “buying the landlord the house” PLUS a return of 7.0% (this is seen as “good” I think, average is 5.3%) on top. That is AER. With capital accumulation it’s 8.9%!

  • Luke

    Highly leveraged landlords will need to desperately raise their LTV ratios over the next few years probably leading to net sales by BTL landlords, some will look to exit altogether as the leveraged “get quick rich scheme” will end. Estate Agents will have to reduce their margins in the lettings departments as margins get squeezed for landlords.

    Once BTL investors become net sellers, prices will settle to what owner occupiers are willing to pay for property, in the short term they might overshoot in the downwards direction as buyers pull out of the market leaving many reluctant property owners unwilling to sell at lower prices. However, it will be wrong to assume that only BTL landlords will be effected, all residential property prices will be effected whether BTL or homeowner leading to higher repossessions of both and increased earnings for the banks as more people have to pay higher interest rates.

    I do not believe rental prices will increase because I do not believe this change will cause a reduction in places to live, the market will sort it out. I think more would-be landlords will instead look to rent out spare rooms in their own homes or build annexes instead. Renting will continue but in a more tax efficient way for landlords.

    If the market falls, any would-be homeowners will be put off buying into a falling market leading to stagnation which will negatively effect stamp duty receipts leading to future tax changes to make up the short-fall.

    Of course if interest rates go negative this will somewhat protect any highly leveraged landlands and help them to exit the market in a more timely fashion. If house prices decline and people stop buying, expect the government to step in.

  • The Reincarnated Sausage

    House prices are so grossly overvalued, it’s beyond belief. There should have been a major correction post 2007-2008 but it never happened and the lenders were bailed out by the electorate.

    The low interest rate policies pursued by the central banks are going to end in catastrophe for overleveraged home owners. It’s not a matter of “if”, it’s a matter of “when”

    I have always suspected that low interest rates were a trap set by the high priests of international finance to force people into risky speculation. House price inflation is not based on any kind of market fundamentals, other than perhaps the lack of supply and archaic planning regulations but the effect of perpetual low interest rates is going to end in absolute carnage………………as planned all along. They want an absolute end to private property ownership for the average citizen and their manipulation of the economy over the last 20 years will certainly achieve this aim.

    • Dr Strangelove

      Agreed, eloquently and succinctly summarised. What we are witnessing is a global economic system designed to transfer asset wealth from the many to the few. The weapon of choice to achieve this is debt.

      • Johnnydub

        Anyone would think it was an infernal plan.. oh wait it was…

      • LG

        Is this a meeting of conspiracy theorists anonymous?

    • CortexUK

      Not only lenders were bailed out. So were mortgage borrowers – with QE and ZIRP.

    • Observer1951

      A London centric based observation. There are many towns in the North of England with affordable housing and jobs, and there are jobs in these locations. I could never understand this attraction to London it’s a nice place for a weekend but the thought of living there!

      • fred flintstone

        There are thousands of houses for sale in The welsh valleys that are cheap (under £75k). You would have to travel for work but the rail system is good and cheap. People just want to live in the big city for some strange reason.

        • Mike Davies

          Tonnes of jobs these days allow remote working. And self driving cars will allow people to commute while working on their laptop, or even sleeping. It will not be so hard to live 4 hours away from work. Sleep at home from 10-2am. Hop into selfdriving car at 3am, sleep til 7 or 8 and change into your clothes in the car or at work. Humans naturally used to sleep 12 hours and have 2-3 hours of leisure time in the middle of the night, before artificial lighting came about. Have all your meetings in the morning and early afternoon, then get carried home from 3-7, while doing solo work on laptop. Or having leisure time, or virtual reality with colleagues or family.

          If that sounds too much then consider a 2 hour commute instead. Also traffic will be much easier; we wont all pile into the city at the same time so much any more, and cars will be smarter about avoiding traffic and spreading the load around the city.

          Property prices in London are going to crash hard within 5 years when people wake up and smell the bacon

  • Adam Bromley

    Seems to me buy to let investing is symptomatic of the general dysfunction of the UK housing market. House prices to median income range from 6 times to 12 times in London, rents in the SE are some of the highest in the world and the new build rate is the lowest since the 1960s. Buy to let investors have been able to leverage the windfall gains from their own homes, bought probably 30 years ago and mortgage free, to get excellent, relatively risk free returns on capital. Not a single new home is built and the rental sector is low grade and overpriced compared to other countries. The overall dynamic is wealth is transferred from 20 somethings who have no choice about renting to high net worth individuals in the 50s and 60s, many of whom have retired. And we wonder why growth remains disappointing? The high net worth individuals could have invested in businesses, created jobs and value, but it’s way too risky compared to the returns on rent. So if this changes means many buy to let investors leaving the market, then that’s probably a good thing. They never had the resources to build new stock or even improve new stock above the minimum to make it rentable. You don’t find amateurs dabbling in commercial letting, land, building management or property services, it’s ridiculous.

    • CortexUK

      Buy to let investing is symptomatic of the general dysfunction of the pension and savings markets. High prices are symptomatic of the general dysfunction of the UK housing market (and macroeconomic policy).

      • Adam Bromley

        Yes, I’d agree with that. The housing market hardly deserves the term market: chronic shortage of supply, prices beyond the reach of many buyers, low quality build etc

      • Copyright101

        And immigration policy.

      • Johnnydub

        This. The rush to buy-to-let really kicked off after Gordon Brown’s tax on pensions. (Not the first to do so however, Lawson also did it.)

        But the message was clear – spendthrift governments (like Cameron’s) will look with lascivious eyes at the piles of money in pension funds and will always take the attitude of “they wont miss a little bit of the top” – even when GB’s actions ended the concept of the final salary pension scheme. (at least in the private sector where you cant just cane the taxpayer)

        So money rushed en masse into buy to let. Now to governments are taxing the beejessus out of that too. So where can we put our money where governments won’t take huge chunks out of it – with that “they wont miss a little bit of the top” attitude?

        • Alex

          Final salary pensions certainly do not exist in the public sector and haven’t for some time.

  • Radford_NG

    Mrs Thatcher sought to create a steak-holder society.Her successors have created a rentier society.Consider:if a rentier has six properties that’s one vote for the conservative party and six disgruntled families;the opposite is one disgruntled ex-rentier and and six families whose votes are available.

    • justejudexultionis

      I thought Mrs Thatcher sought to create a stakeholder society and not a ‘steak-holder’ one. I don’t see what the point of standing around all day holding a steak is, personally.

      • Radford_NG

        Ha-bloody-ha.I apologize to any Hindus who are offended.

      • disruptivethoughts

        Coming from a grocer’s family as she did, all she wanted the chance for everyone to become a butcher, holding as much steak as their shop would allow.

    • Mike Breen

      What makes you think every tenant is disgruntled? I rent AND I am a landlord. As far as I can tell, my tenant is very happy and clearly I am too, or I would have bought the place I now rent. Honestly, this obsession with home ownership seems to suggest that their is no alternative. There is and guess what? You won’t have to pay for the new roof down the line! More, you can move house simply and cheaply!

      • disruptivethoughts

        There is something to be said for your approach, although rents are exorbitant on larger properties. A mortgage as an owner-occupier offers limited freedom to do what you like with your home, but at the expense of limiting your geographical flexibility and career opportunities.

  • justejudexultionis

    Don’t put your life savings into property. I know a dead cert for the 3.30 at Sandown at 50 to 1.

    • evad666

      Fire arms and Narcotics usually give a reasonable return.

  • mdj

    Nobody is asking why private citizens instinctively put their spare cash into housing in this country.
    The reason is simple ; the financial institutions of this country, supposedly the envy of the world, are completely unfit for purpose.

    As a very cautious, conventional saver with not much to save, for years I went along with the consensus of what is a sound and sensible institution: I banked with the Coop, then the Halifax; I put my pensions and ISA savings into Equitable Life, Confederation Life, Scottish Widows, Norwich Union/Aviva and Marks and Spencer.
    The last two have merely been stagnant, all the remainder notoriously had to be rescued in some way or other.
    Had I instead steadily bought shabby terrace houses for £20,000 in a dead Welsh Valley town, I could have put in – or even bought complete with – a Housing Benefit tenant bringing me £5000 a year, an evil trade. Thirty years of perhaps 20% annual profit before tax, compounded, funded by the state (who could have saved billions by simply giving such housing to the occupants), without a cent paid to brokers or advisers.
    What should I have done?

    • MickC

      Yes, you are absolutely right. The British do not trust the financial “institutions”, because they are fraudulent.
      Property is always there, and can be lived in.

      • mdj

        But we can only depend on capital gain to ease our old age at the relative disadvantage of the next generation, another evil bargain.

    • fred flintstone

      I read a Money article the other day in telegraph money or similar where a reader wanted to get a return of £12k per year with an investment of £400k. The experts could not find a way with no risk. That is a very sad state of affairs. It seems to be global also.

      • mdj

        Buy a house in Leytonstone; it’s gone manic, though for how long no-one can say.
        Having one myself, I’m very conflicted about this, for the reason I gave above.

  • Ingmar Blessing

    The sattelite dishes on the articles image: I wonder at which satellite they are pointing..

    Question: How common are satellite dishes in Britain? Haven’t been there yet

  • AdrianM

    Water finds its own level, so it is with money. While people are still buying property and paying rent, nothing will change, no matter how many storm defences Osbourne and the BofE erects against a fast flowing market.

    • fred flintstone

      The choice? Live on the streets. It’s a bit cold and wet in the UK for most of us to do that.

      • AdrianM

        Alas, too many people have been told by simpering liberals that life can be fair.

        • disruptivethoughts

          Is that what you tell people living on the streets?

          • AdrianM

            What would you tell people living on the streets?

  • FreightLoad

    Retirees used to live off: (i) State Pension; plus (ii) building society interest. Interest has disappeared because governments have forced rates down to nothing (and, if they become negative, savings will actually be robbed). My wife and I simply won’t do BTL because we have rented several times, hated it, and just cannot do the same to someone else. What to do instead? Haven’t a clue. Live very cheaply is the only option. (Go on holidays in retirement? Forget it. We haven’t wasted money on a holiday for over 20 years.)

    • fred flintstone

      Yes, it is a real dilemma for many. The country is full of con artists who have perfected the art of fraud and now that the Police have washed their hands of Fraud cases, they do not even have the fear of being caught. Your money is no longer safe in a bank or building society.
      Looking on a positive note, it is defiantly better to have this to worry about than having no money at all.
      I read a Money article the other day where someone was trying to get a return of £12k per year with an investment of £400k. The experts could find a way that It could not be done with no risk.

      • Mike Breen

        You can easily get a return of 12 percent and more. Yes there is risk, but there would have to be a complete and utter disaster to make it less worthwhile than keeping money in the bank. I’m currently netting 17 percent on Euro funds with peer to peer lending, and that is loss adjusted. Think out of the box.

        • fred flintstone

          It is ok if you can afford to lose it if it goes wrong but many cannot so will not take the risk.

    • Mike Davies

      Look into peer-to-peer lending for businesses. e.g. funding circle.

      Its easy to diversify and get safe 5-10% returns.

      My dad is retired and gets up to 15% returns by investing in riskier businesses and doing some of his own due diligence.

      • createsomething

        Money invested in Funding Circle is not protected under FSCS so it’s a pretty risky investment compared to many of the alternatives.

  • Michael H Kenyon

    Just think if we knew who was laundering their money in London (and who was sending back ‘home’ money which might benefit the UK)? The boom wouldn’t be quite so charming then. Mind you, there will be some lovely cheap flats with excellent views in Nine Elms in a few years.

  • Harryagain

    House prices would fall if all these Poles went home.
    That’s why Camoron is in favour of staying in the EUSSR.
    His chums stand to lose a lot of money.

    Poland must be deserted.

    • Mike Breen

      Home is where you want to live.

      • Harryagain

        Home is where you can afford to live.

    • Rosebud

      Polish are not big investors in properties. they earn money here and invest in their beloved Poland. Most of them are happier paying rent while they earn good money in tis country. They are hard workers.

      • Harryagain

        Poles(and the rest) are all living somewhere, hence causing a shortage and putting up prices.
        They are of no economic value, they pay little tax and send the money to Poland.

        Only here because socialists buy votes in the UK with benefit money.
        We have a sub-culture that sits on their are ses in front of the TV and won’t work.

  • Andy Cripps

    Putting a limit on the size of a portfolio would release a lot of properties back onto the market and stimulate some aspects of the property market. When I hear of people having portfolios of 100, 200 plus it highlights one of the problems with capitalism, taking more than you need to the detriment of others. Something that’s lost on Tory politicians.

    • steve foley

      It is the Conservatives who are trying to curtail BTL.
      it all started up under labour who did nothing to stop it.

    • fred flintstone

      Many people need to rent. many want to rent. Not everybody wants the burden of a mortgage. It stifles you in many ways. If all those rental properties are put up for sale, what happens to the tenants who are unable to buy a house?

      • Andy Cripps

        I don’t know. I guess we need people running the country who actually manage and do the maths to know. Can’t be too hard can it, I guess we hear a lot of about the shortage of new builds to accommodate the ever increasing population/demand.

    • Dominic Stockford

      The rich and the poor in Switzerland tend to ‘own’, the majority in the middle tend to rent. Interesting, no?

      • Andy Cripps

        Yes that is.

    • Rosebud

      Putting a limit does not mean tenants all be able to buy or get a mortgage. Let market forces determine war people do. I am not one of those people with a portfolio but do believe not everyone wish to own their own home and be burdened with a mortgage. When the base rates rise to 5-8% the the ones who are buying now may get into hot water over repaying mortgages and banks will have a lot of bad debts. Those repossessed properties may have to be sold at lower prices with negative equity.

  • Hobbes11

    The elephant in the room of Merryn’s article is demographics. Inward migration is at record levels and will, if anything, rise if we stay in the EU (Turkey was won visa concessions for its 90m people as a quid pro quo for policing Europe’s border with Syria). It’s a a demand and supply no brainer. There is no way housebuilding will keep pace with this, so rents will remain high and rise further. There aren’t many of those markets left anymore. BTLers will simply reverse into company structures to obviate any tax losses – they won’t leave the market. Osborne’s tax move is typically cack-handed – he’s hammered the middle classes with this, but left corporates (who are now massive in BTL, especially student) unscathed. It’s another installment in the story of how government is raiding the personal tax sector to make up for their failure to tax corporates effectively.

    • Affy

      Best and most agreeable post for me in this entire debate without a doubt. Great summary.

  • fred flintstone

    Two friends of mine are already subsidising their tenants. One out of necessity because he cannot sell his house and has already dropped the price well into negative equity. The other thought it would work out well as a retirement plan and the £100 per month he adds to what his tenants pay in rent looked worth while. The problem is that both have interest only mortgages. One was hoping he will eventually find a buyer and the other was hoping that when his small business picked up pace that he could change the mortgage or pay lump sums off of the existing one.
    The new rules have left both of them with deep problems.

    • JamesTennant

      I can’t say I have much sympathy

      • fred flintstone

        I do. Neither of them have much money and instead of drinking or gambling away what they had, they decided to invest in a house. They are good landlords and look after their tenets well and do not deserve to be dumped on in this manner. The bad landlords that do not care and treat tenants badly will not be affected by the changes as they are rich people doing it as a business and can afford to buy the property outright. The new laws will have no effect on them but they will still use it to increase rents.

        • Polstertron .

          No sympathy. They decided of their own free will “to invest in a house”. Effectively they removed homes from the market for owner occupiers, and then provided the “service” of renting them back to them. They’re worse than ticket touts, and provide no service whatsoever. They don’t create homes, they offer nothing to society. Houses should be homes, not investments. Your friend can sell their house, they’ve just got an unrealistic expectation of it’s price, hopefully they can drop it to a price point where an owner occupier can make it their home.

          • fred flintstone

            There are millions opf people who cannot have a mortgage for lots of reasons. They would be homeless without landlords.

          • Rosebud

            If they did not invest in property does not mean an owner occupier would have bought it. A lot of first time buyers cannot afford or do not wish to buy. Instead they wish to spend their income on holidays, partying or maybe not earn sufficient amount for a mortgage. You have to allow market forces in free economy. we are not communist to help everyone to purchase a home. A lot of people will need to be tenants all their life. There is nothing wrong with that idea. This is how it works in Germany. You may not have sympathy. Then why should anyone have sympathy for people who do not earn enough or who fritter their money on other things beside buying a home.

          • Polstertron .

            Rosebud – While some people will always choose to rent, we are now in a situation where people are forced to rent. BTL investors are denying people the chance of home ownership and can out-borrow potential owner occupiers, thus pushing prices out of reach. They work on the same principle as ticket touts. Fortunately this is now recognised by the government hence Clause 24 and Basel III, which makes BTL unprofitable for the over-leveraged.

            You then attack the younger generation by assuming they all spend their income on holidays and partying? A 3 bed semi in my area is 15 times the average salary. My parents bought in the 70’s for 2 times ONE salary doing manual jobs. I bought my first house for 4 times ONE salary, at 8% interest rates and it was easy at aged 24. If you could tell a couple of first time buyers how they can buy a house at 15 times salary, while paying 40% of their wages in living costs to a BTL landlord, it would be enlightening and more helpful. (perhaps factor student loans, no gold plated DB pensions, and a state pension unlikely to exist into that equation).

            There is no free economy. This market is rigged and manipulated. The government will continue to rig it for as long as they possibly can to create the illusion of wealth.

            Germany do indeed have an excellent rental system. The rental sector is highly regulated with rent controls and life time tenancies. We have no such system in the UK, instead short term tenancies, unregulated rents, and extortionate agency costs. It’s precisely because of the influx of landlords, interested only in making money, that people here desperately do not want to rent.

            Back on topic. No I have zero sympathy for a BTL Landlord losing money on a morally bankrupt investment, which denied the opportunity for a potential property owner to have the security and tenure of their own home. BTL have put their own greed at the fore-front. I have no objection to people making money, providing it is productive and useful to society and adds value. Like a ticket tout, BTL add nothing. They did not provide the land, or build the house, they simply removed it from the market for their own gain.

          • Rosebud

            That is life. You have to let market forces decide. You cannot force the properties to go down in price. It is demand and supply. Not everyone has to buy, some will be forced to rent, as it happens in many other countries. Osbourne is interfering the market forces by charging more tax to 2nd property owners. We hope that he actually uses these resources (extra tax) to help young people to get their own home. However, it has never been easy. The challenges will always get worse as time goes on. There is more transparency now than in 1980’s when internet was not so popular with people. We have had a lot of people from outside UK and a lot of them managed to get on the property ladder, by economising and working hard. I have had 3 jobs to get on a property ladder. Nowadays, parents do help out as well. There is also government help to buy for people who wish to take this help. When I bought the first property is it was well over 8 times my salary too. Yes, it will always get more difficult. We live in free market conditions. Thank goodness we are not communist, otherwise the economy would stagnate. There will be no motivation for investments. Not all young people are motivated to buy their own home. I have worked with people who were happy to rent out forever as they cannot cope with mortgages and boiler going down. They wished to phone their landlord and it being sorted out within 24 hours.

  • milford

    We were a country of shopkeepers. Now we’re a country of landlords. Supermarkets overwhelmed shops and now corporations will overwhelm the rental market. What do we do next? We’re running out of options. Seems they want us all working for corporations not running our own businesses.

  • james fitzgerald

    If you buy cash, you are ahead of the game. Properties will come down in price so cash is king.

    • Troubled

      But when do you time the purchase? Falling knives and all that…..

      • james fitzgerald

        If you keep an eye on the property prices in you area and see them come down in price, What you would have been prepared to pay, compared to what you then/now can pay gives you that bonus. How large the bonus is up to how long you are willing to wait. Its a game of chess.

        • Polstertron .

          True. I bought my first home in 1995, unwittingly, right at the bottom of the market. As FTB’s we were terrified as no one wants to catch that falling knife without knowing where the bottom is. My strategy this time round will be the same, wait until prices reach what I consider “value” but buy cash. To live in. I might even be generous enough to help a struggling BTL’er offload. At the right price.

  • tigertank

    Xtremely high property prices are the problem – how do you get them down to reasonable levels? You have to attack the excessively priced property. In london a lot of property has not been sold at high prices because either the landlord has kept them for a long time or the householder has lived in the house for a long time. For at least 70 % of the mortgages the amount outstanding is less than £45,000. The poblem is the highly priced property bought with interest only loans. Removing the tax relief on interest only loans is the logical step to hit highly priced property and remove the capital gain. The next step is to allow home owners to walk away from mortgages when they default butbto do so there has to be a purchaser of last resort. If housing associations have to sell their property to sitting tenants this opens thecway firvthem to become the purchasers of last resort.

  • oldham echo

    High property prices are not the problem but the solution. The problem lies in the low levels of immigration since this Government came to power with a racist mandate to do just that. Until the baby boom matures we need to maintain high immigration numbers and eliminate urban sprawl

    • Dominic Stockford

      That’s some kind of joke? Right?

    • niico100

      The immigration figures do not support your trolling comment.

      Regarding immigration – the merry go round must stop at some point – you can’t keep swelling your population with immigrants indefinitely, at some point you run out of people to bring in and country to fill them with. It’s unsustainable.

      Also how does more immigration, and ergo higher population, eliminate urban sprawl? If anything more people will put more pressure on increasing urban sprawl.

      The Tories have agreed to take 40,000 vetted asylum seekers from Syria. Yes very racist.

      A confused argument indeed.

  • Dominic Stockford

    Unless you are a charity, in which case these ‘extra costs’ simply don’t come into play. So, just maybe, there will be an increase in social landlording among charities?

  • Helpmechef Ltd

    itmakessense123, Brighton, United Kingdom, moments ago

    Doesn’t anybody else thing that this is an absolute disgrace?? Why is it not all over the media? Whilst I think the government are doing a pretty good job of ridding us of our massive national debt, it is us that are paying it. This increase is all wrapped up as helping to stop financially weaker families or couples from being forced out of their houses, what a load of old tosh, just a tax rip off for the government to stiff billions of pounds out of the housing market. What is going to happen? The investment will dry up, people who currently invest will move out and buy abroad (that is what I am going to do) I was looking at a buy to let today and the SDLT will move from £6700 to £27000 WTF!! Last one out of the UK turn the light off!
    Olham Echo must have a sense of humour?? Made me laugh!

    • GSL

      while we have a deficit they are not ‘ridding us of our massive national debt’… the opposite of what you said is true… while we have a deficit we are going deeper into debt…

      ‘The investment will dry up’… again the opposite is true… you are not adding any value. you are buying a pre existing home. From the UK’s perspective, or the younger generations perspective, you have not made an investment… you have only speculated and pushed up housing prices… this has only added on cost to the the next generation of worker…

      At best this has left us unable to raise IR without the whole economy collapsing – along with all our banks – that was once called insolvency

  • GSL

    Worth looking at this…

  • niico100

    I disagree. This will just push rental prices up. It is self correcting – tenants will endup paying this, not landlords. Couple that with fewer people wanting to become buy to let landlords due to the bad publicity and it may actually become *more* profitable as supply diminishes.

    You can’t beat a free market.

  • Pat Robins

    Really? The changes are not that big a problem for those with, say, 40 beds across 10 odd properties have a look… here’s a probable ruse, avoids stamp duty, CGT and reduce your tax bill from 45% to 18% by borrowing, to lend a large lump of money to the trust, so you’re repaid a loan… that’s how you get your money out http://www.property118.com/avoid-refinancing-landlord-incorporation/82791/ PWC advice might cost £7K and costs to set up this type of trust £60 odd… now breath again 😉


    Well done to both George Osbourne and Mark Carney. I don’t usually agree with his policies but I think this is wholly necessary to correct what is happening on the market as a whole. House prices keep rising, wages are not keeping up, and first time buyers are priced out. Government needs to look at the bigger picture. There are simply too few properties available for first time buyers whilst buy to let have been buying all new stock. In Kent there was the case of the Wilsons couple who owned 700 properties! Absurd. That this was allowed to happen shows that market forces, if skewed too much in favour of buy to let simply don’t work. There are too many cases of locals in villages accross the south who cannot get on the property ladder because Londoners have bought second homes thus further pushing up prices. Something has to be done to correct this. New housing stock needs to be built for locals to buy at affordable prices. Not as second homes or buy to let, but as their main home. This new policy may help at least get more housing stock on the market, thus lowering grossly inflated prices. I look forward to the backlash.

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  • gazza

    just a few points, make of them what you will…

    you have to admire the govt don’t you? playing another blinder. Allowing local authorities to sell off soclal housing, reducing homes for social tenants and forcing them towards private landlords, and blaming said landlords for the lack of housing,get the general public to agree and then slap exhorbitant taxes on them now it is politicly possible to do so. A brilliant ruse. To some people, Landlords now seem to sit somewhere between paedophiles and thieves.

    Do those moaning about the fact that their kids can not get on the ladder remember the mid 80’s? With 15% interest rates? I do, and I survived mortgage rates of 7 or 8 %. If I had kids,or I was just starting out, I would seriously consider whether I would want them to buy a home. The mortgage companies and govt are dreaming up all sorts of ploys to entice people in, with shared ownership, paying off a mortgage well after retirement etc. And this is with interest rates at 0.5%..! If interest rates climb steeply, they are going to wish they had rented.

    Personally, If I had the cash, I would buy to let. For those willing to take the risk with their cash, rather than see it being eroded in a cash isa through inflation, it is (or it was) a good option.

    I suspect a lot of the whining is from people who do not have the money or have the money but not the courage to move from saving to investing.

    As I said, make of them what you will.

    • Mista Wilks

      “If interest rates climb steeply, they are going to wish they had rented.”

      I doubt that somehow. The increased mortgage fees will be passed on to them quicker than you can say ‘petit bourgeois’!

  • maria Rosa

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  • https://www.vertical-leap.uk/ Lee Wilson

    Really interesting read. I particularly liked the practical examples, as that’s often what’s missing from many articles in this area. One area that I read (at http://www.buy2let.com/blog/buytolet-mortgages-the-big-questions-answered.html) which i found interesting, was what to do if you are not excepted for a buy to let mortgage.

  • Victor Hugo

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  • Victor Hugo

    I am Thomas Spencer, a Private Money Lender do you need a loan to start up business or to pay your bills and a corporate financial for real estate and any kinds of business financing. I also offer Loans to individuals,Firms and corporate bodies at 2.% interest rate. I give out loan to serious minded people that are interested of loan if interested contact this email: thomasloanservice1@gmail.com

  • Kenneth Snitz

    I am Helen 45 years old am from LA i have been looking for how to get online loan for the past 6 months i have been scammed by several times by different lenders which makes me lost my hope, last week i was going through the internet when i came across someone who testify how he got his loan from Mr Johnny Brennan so i contacted him because i desperately need a loan, He promised me he can help me as long as i abide to the company rules & policy which i took one last step of faith to do what he asked me to do to my greatest surprise i was approved the sum of $50,000 which was transferred to me within 24 hours so i said i must use this opportunity to tell people that not everyone is a scammer, So contact Mr Johnny Brennan via email: jonny_brennanfinance@outlook.com if you need help financially.


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  • Mrs Mary Angel Alexan


    Am here to tell you the help Mrs Janica from USA did for me and my family ,she make me who i am today, when i was very poor and she can still do it for you.

    DID YOU NEED A BLANK CARD THAT HAS ACCESS TO HACK INTO AN ATM MACHINE WITHOUT BEEN CAUGHT? if yes you do need, EMAIL Mrs Janica fast now to get us : myatmcreditcard@yahoo.com … I got my already program ATM when I was searching for jobs on the Internet… At this time I was totally hopeless, confused and all I think was to kill my self…I have been scammed so many times when I wanted a loan to start up a business and feed my self and my kids… with the help of this card I withdraw the sum of $5000 usd DAILY… And all the debts, bills and taxes were cleared in just a clink… It is 60% faster and easier than the bank ATM in use…It is untraceable, undetectable, and it is program in such a way it works on both advance and old ATM machine anywhere in the world… And money is withdrew unlimited but need software upgrade every year ending…I am so happy about this because i got mine last week and I have used it to get $100,000. (Mrs Janica) is giving out the card just to help the poor and the needy though it is illegal but it is something nice and she is not like other scam pretending to have the blank ATM cards and note that she will not ask you for your bank details, never. get yours from her now,Just send her an email On (myatmcreditcard@yahoo.com )She have done it for me and my family and she can still do it for you all you need do just email her now and go on with what she ask you to do and believe me and trust me you will be one of the richest person in your country and believe me that once you have getting one from her money will not be your problem again in life.

    Once again all thanks to you Mrs Janica for making me who i am today, my God will be adding more blessings into your life everyday for helping people to be come rich.


    Mrs JANICA.

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  • mrs Clara

    Good Day Every One,

    I want to quickly use this medium to shear a testimony on how God directed me to a Legit and real loan lender who have transformed my life from grass to grace, from being poor to a rich woman who can now boast of a healthy and wealthy life without stress or financial difficulties. After so many months of trying to get a loan on the internet and was scammed the sum of $6,210 i became so desperate in getting a loan from a legit loan lender online who will not add to my pains, then i decided to contact a friend of mine who recently got a loan online, we discussed about the issue and to our conclusion she told me about a woman called MRS JANA MOORE from USA,who is the of Pay-less Loan Company So i applied for a loan sum of (1.5million dollars) with low interest rate of 2%, so the loan was approved easily without stress and all the preparations where made concerning the loan transfer and in less than 1hours the loan was deposited into my bank so i want to advice any one in need of a loan to quickly contact Her via: (BraydenOffshoreLoans@hotmail.com) She did not know am doing this i pray that God will bless him for the good thing he has done in my life.

    All thanks to you
    Mrs Jana Moore.

  • Ms. Mary Watson

    Good day to you all of you am Ms. Mary Watson, I’m from Germany, am very happy as am writing the testimony how i got my loan from this loan, i believe God has a plan for me, after i was been scammed of my money by many so called loan lenders, i was deceived and almost thought to take my life, but God has a purpose for me, if you want to get a loan from any company you have to chose Johnny Brennan Firm, when i was first started with him, thought he was like the rest, and to my Greatest surprise i got the loan of $69,000.00 in my account and that was the Exact amount i applied for in his company, and you that is feeling that there no hope for you? is a lie because if you interested in getting any type of loan, you can contact him via email, his email is: jonny_brennanfinance@outlook.com, God Bless you like he blessed me with Mr Johnny Brennan by getting my loan after been falling in the hands of scams.

    Ms. Mary Watson

  • Esekhile Momodu

    Hello i am Tara Johnson,i live in Lawton U.S.A and i am a single mom,i had financial problem and it was very bad but thank God for this private lender Mrs Maria who helped me with a loan of 50,000usd and now we are good all thanks to Mrs Maria.
    if you know that you are in need of an urgent loan i would advise you to contact Mrs Maria at Email:AUSTINTRUSTLOANFUND@HOTMAIL.COM
    Thank You And God Bless.


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