How does Buy to Let END!

[With a crooked smile]

A sub 5% 5 year BTL mortgage became available yesterday for new purchases and remortgages. 

Read it and weep crashies!

[Wight Flight]

1 hour ago, With a crooked smile said:

A sub 5% 5 year BTL mortgage became available yesterday for new purchases and remortgages. 

Read it and weep crashies!

Sub 3% rentals are still available.

Happy days.

[GTM]

1 hour ago, With a crooked smile said:

A sub 5% 5 year BTL mortgage became available yesterday for new purchases and remortgages. 

Read it and weep crashies!

Yields in the South are circa 4%.

[Wight Flight]

Quote

. I think that a PRS landlord these days needs a minimum return of around 8% to cover the risk and routine costs. So a rental house valued at £150,000 (2 bed terraced where I live) should command a rent of £1,000 (they don’t, but rents are rising as local landlords wake up). That this is unaffordable for some is not the landlords fault.

Of course the alternative viewpoint is that £600 is the correct rent and the house value is wrong, but that never occurs to landlords.

https://www.property118.com/45-of-tenants-are-struggling-to-pay-rent-ons/

[Plan-b]

2 hours ago, With a crooked smile said:

A sub 5% 5 year BTL mortgage became available yesterday for new purchases and remortgages. 

Read it and weep crashies!

This looks like it...

Its just sneaks under 5% by 0.01% -  Max LTV is 55% (£90k deposit on a £200k Gaff)  It then reverts to a variable 8.48% should you go into negative equity or cant remortgage - I bet the acceptance criteria is pretty strict too - with a meaty 3.00% fee on top to complete the icing on the cake.

Thats all pretty terrible for the average BTL Landlord to contemplate.

Give us the full facts not just the Headlines please.

Cheers.

[With a crooked smile]

8 hours ago, Wight Flight said:

Sub 3% rentals are still available.

Happy days.

You'll be happy renting and not moaning about it constantly on a forum then.. 

[Wight Flight]

23 minutes ago, With a crooked smile said:

You'll be happy renting and not moaning about it constantly on a forum then.. 

Indeed. But i will be happier when the rental reform bill gets passed.

 

[sleepwello'nights]

9 hours ago, With a crooked smile said:

A sub 5% 5 year BTL mortgage became available yesterday for new purchases and remortgages. 

Read it and weep crashies!

I'm relieved I was able to sell my last rental property and exit with a positive return. I'm not as hostile as many posters about the PRS, but I don't see how landlords with geared interest only mortgages can survive. One landlord's blog I read when I became a landlord wrote that he bought with 15 year repayment mortgages. Those that did that should be able to continue. I haven't done  a comparison to see what my return would be if I'd gone that route. Obviously less than the IO method I used. 

Even so with the tax and EPC changes returns are reducing. Compound those changes with the reports of the lengthy process for regaining physical possession it seems fraught with financial pitfalls. I was lucky that the vast majority of renters I dealt with were reasonable and didn't cause problems. The handful who did were a real fucking nuisance. I suspect even if they owned the property they rented from/through me they would still turn them into shitholes, that's just how some people choose to live.  Fortunately not many.

 

[Wight Flight]

2 minutes ago, sleepwello'nights said:

I suspect even if they owned the property they rented from/through me they would still turn them into shitholes, that's just how some people choose to live.  Fortunately not many.

That's why I posted the other day that if I was a LL I would always want to meet prospective new tenants in their current home.

I am surprised they don't.

[spygirl]

On 13/09/2023 at 17:39, spygirl said:

From TOS

This was always a BS scheme.

https://www.taxpolicy.org.uk/2023/09/13/property118/

Oh dear.

Everyone's having a pop now.

https://www.accountingweb.co.uk/tax/business-tax/landlords-double-tax-bills-by-taking-poor-advice?amp

Should this scheme be declared under the disclosure of tax avoidance scheme rules? 

I believe the scheme does meet at least two of the hallmarks under the disclosure of tax avoidance scheme (DOTAS) rules because the sole purpose of the scheme is to avoid tax, and the provider is charging a premium fee for the scheme (over £40,000). Failure to register a scheme under DOTAS can result in a fine of up to £1m.

What should landlords do if they have taken up this scheme to avoid tax? 

Any landlord who has taken up this scheme promoted by Property118 should seek tax advice from a tax specialist who is a member of a regulated body such as The Chartered Institute of Taxation, The Association of Taxation Technicians, The Institute of Chartered Accountants in England and Wales or The Institute of Chartered Accountants of Scotland. It would also be prudent to seek advice from a solicitor with experience in mortgages and property finance, in view of the potential for mortgage default.

[With a crooked smile]

3 hours ago, Wight Flight said:

Indeed. But i will be happier when the rental reform bill gets passed.

 

I've just put a note in google calendar for 18 months time. Monday 17th March 2025. Take the piss out of @Wight Flightfor still moaning about renting...

[Wight Flight]

4 minutes ago, With a crooked smile said:

I've just put a note in google calendar for 18 months time. Monday 17th March 2025. Take the piss out of @Wight Flightfor still moaning about renting...

I don't actually moan about renting.

I do moan about the stupid way the financial service have facilitated the way the rental market works, and how much damage has been done to society by this.

I have made my choices, and am fine with that, but I feel for today's young and hope they get the same chances the current older generation got.

 

[Ash4781b]

BTL is stuck with the same problem most of us will have with frozen personal tax allowances. They are likely going to lose 40% of rent increases under assumption they are a higher tax rate payer. Many leveraged interest only BTL are effectively locked in to giving HMRC and the banks money waiting for capital gains. 

[spygirl]

1 hour ago, Ash4781b said:

BTL is stuck with the same problem most of us will have with frozen personal tax allowances. They are likely going to lose 40% of rent increases under assumption they are a higher tax rate payer. Many leveraged interest only BTL are effectively locked in to giving HMRC and the banks money waiting for capital gains. 

The relatively pain free exit was 2017.

They had years to move.

The pain has been ratching up since 2017. Not that the fuckwits were doing their tax correctly.

If tgey were theyd have made move.

But they stayed, picking up rusty oennues infrint of a steam roller.

Then the steam rolled accelorated and was joined by another steam roller - (IR n tax changes)

And they are fucked.

The only other finance thing that allows mug punters to leverage up is forex.

And mugpunters get milked there too.

 

 

 

 

[AWW]

On 15/09/2023 at 20:30, Wight Flight said:

At least 75% of our new listings are six month only winter lets.

One today is just 4 months.

i really want to see these parasites burn.

It's a big risk to take. Tenant could easily stay put for 6-12 month's after that 4 month period.

[AWW]

17 hours ago, GTM said:

Yields in the South are circa 4%.

"the South" is quite big. Have you got some data to share? Because I don't think 4% is correct.

[AWW]

18 hours ago, With a crooked smile said:

A sub 5% 5 year BTL mortgage became available yesterday for new purchases and remortgages. 

Read it and weep crashies!

Alternatively, the cheapest BTL mortgage rate is currently double the average 3 years ago.

[Bobthebuilder]

31 minutes ago, AWW said:

"the South" is quite big. Have you got some data to share? Because I don't think 4% is correct.

My mate is currently renting a house in Dorset at a 3% yield.

[AWW]

29 minutes ago, Bobthebuilder said:

My mate is currently renting a house in Dorset at a 3% yield.

My house in London is 2.3% (although that will have gone up a bit as values have trended down)

[Wight Flight]

13 minutes ago, AWW said:

My house in London is 2.3% (although that will have gone up a bit as values have trended down)

I am about 2.6%, depending on current house value.

[Plan-b]

1 hour ago, AWW said:

My house in London is 2.3% (although that will have gone up a bit as values have trended down)

59 minutes ago, Wight Flight said:

I am about 2.6%, depending on current house value.

BTL Makes increasingly no sense and it hasn't much for about 6 years, voids, repairs, increased taxation, epc requirements, insurance and now high borrowing costs, the worst of all falling property prices, and competition from the professional landlord of the massively growing BTR sector.

Why oh why would anyone be landlord when you can get the Government backed NS&I 6.2% yield bond with no risk? ..

 

Edited September 17, 2023 by Plan-b

[spygirl]

2 hours ago, AWW said:

It's a big risk to take. Tenant could easily stay put for 6-12 month's after that 4 month period.

Maybe stay put for forseeable.

IoW might be able to get bailiffs feet on the island ....

[One percent]

On 16/09/2023 at 09:59, onlyme said:

Same with the builders (land bankers) all humming a positive tune to clear the decks of as much as possible to the gullible. Main indices now heading down so getting more difficult to fool the new buyers they need every month,.

My worry is that if the builders can’t sell their slave boxes, government will buy them to house the New British. There are two substantial new estates being built near me.  They can’t shift them and have even moved beyond incentives to dropping the price on rightmove. 

[One percent]

6 hours ago, Ash4781b said:

BTL is stuck with the same problem most of us will have with frozen personal tax allowances. They are likely going to lose 40% of rent increases under assumption they are a higher tax rate payer. Many leveraged interest only BTL are effectively locked in to giving HMRC and the banks money waiting for capital gains. 

If you read the article posted by @spygirl above, it seems that rental income is already taxed at 40 percent. I might be misunderstanding it though.  

[Bobthebuilder]

3 minutes ago, One percent said:

My worry is that if the builders can’t sell their slave boxes, government will buy them to house the New British. There are two substantial new estates being built near me.  They can’t shift them and have even moved beyond incentives to dropping the price on rightmove. 

The local council will buy them, they are the ones who gave the planning permission in the first place, so get a deal. Ive said a few times on this forum about a new build estate I was interested in Dorset, prices were being reduced then overnight none were available, my mates daughter got one through the council house list.

Not convinced myself that they will go to new arrivals, but my BIL got a new build council flat after his divorce, that has been unheard of in recent years.