How does Buy to Let END!

[Guest]

7 hours ago, lid said:

https://www.thisismoney.co.uk/money/buytolet/article-12073321/HMRC-orders-soaring-numbers-landlords-pay-millions-pounds-fines.html

🙂

Quote

The taxman found 5,429 landlords did not declare enough income tax in 2022/23, up 83 per cent in a year.

I suspect the real number is more like 500,000 landlords did not declare enough income tax last year.

[spygirl]

1 hour ago, Darude said:

I suspect the real number is more like 500,000 landlords did not declare enough income tax last year.

HMRC have finite capacity.

They are building evidence with 50k to blanket bomb the 500k.

They work like that.

[Wight Flight]

This isn't going to help landlords.

https://www.property118.com/one-in-20-tenants-missed-their-rent-payment-in-april/

[marceau]

12 hours ago, spygirl said:

HMRC have finite capacity.

They are building evidence with 50k to blanket bomb the 500k.

They work like that.

With the data matching tools they have and the tiny capital amounts they're allowed to query there isn't much of an escape once the precedents have been established. I find it hard to believe they won't be interested in the 20+ years of treasure that BTL halfwits have left lying around for them to collect. Is there even a time limit on HMRC investigations?

[spygirl]

2 hours ago, Wight Flight said:

This isn't going to help landlords.

https://www.property118.com/one-in-20-tenants-missed-their-rent-payment-in-april/

I always draw an analogy between borrowing loads of money to let a house to people with no money and borrowing loads of money to buy a Ferrari to rent to a drunk tramp.

In both cases you are putting a lot of wealth/money/pain in the hands of a feckless fuckwit.

[spygirl]

2 hours ago, marceau said:

With the data matching tools they have and the tiny capital amounts they're allowed to query there isn't much of an escape once the precedents have been established. I find it hard to believe they won't be interested in the 20+ years of treasure that BTL halfwits have left lying around for them to collect. Is there even a time limit on HMRC investigations?

Theres always a money side to HMRC- if itll cost much more than the tax owed theyll only give it a cursory go - see list of defaulters.

Hiwever .. if theres assets and efp. If theyve been told to go after a particular type they will.

 

[Ash4781b]

18 hours ago, Darude said:

I suspect the real number is more like 500,000 landlords did not declare enough income tax last year.

But They are all accidental landlords. 

[Ash4781b]

18 hours ago, Darude said:

I suspect the real number is more like 500,000 landlords did not declare enough income tax last year.

“The taxman found 5,429 landlords did not declare enough income tax in 2022/23, up 83 per cent in a year.

HMRC clawed back £33million in tax from these landlords - £6,078 each on average - up 73 per cent from £19.3million in 2021/22.”

Blimey £6k average who is doing their tax returns?

Edited May 13, 2023 by Ash4781b

[MightyTharg]

40 minutes ago, Ash4781b said:

“The taxman found 5,429 landlords did not declare enough income tax in 2022/23, up 83 per cent in a year.

HMRC clawed back £33million in tax from these landlords - £6,078 each on average - up 73 per cent from £19.3million in 2021/22.”

Blimey £6k average who is doing their tax returns?

That’s a lot of money. Kind of proves that BTL is still booming. And remember the biggest source of their profits is completely tax free (negative real interest rates).

I think it might be the best time in history for renting out property - do you think Staithes or Whitby would be better for a holiday let?

[leonardratso]

7 hours ago, Ash4781b said:

“The taxman found 5,429 landlords did not declare enough income tax in 2022/23, up 83 per cent in a year.

HMRC clawed back £33million in tax from these landlords - £6,078 each on average - up 73 per cent from £19.3million in 2021/22.”

Blimey £6k average who is doing their tax returns?

no one

[spygirl]

From TOS.

McBoro

https://www.heraldscotland.com/news/23519591.cumbernauld-street-ravaged-buy-to-let-investors/

 

[Wight Flight]

Oops.

https://www.property118.com/how-property118-are-helping-a-landlord-to-resolve-a-serious-hybrid-llp-tax-planning-blunder/

[GTM]

8 minutes ago, spygirl said:

From TOS.

McBoro

https://www.heraldscotland.com/news/23519591.cumbernauld-street-ravaged-buy-to-let-investors/

 

What's it called? Fucked.

To help those who might not be familiar with 80s adverts for Scottish new towns:

 

[spygirl]

31 minutes ago, Wight Flight said:

Oops.

https://www.property118.com/how-property118-are-helping-a-landlord-to-resolve-a-serious-hybrid-llp-tax-planning-blunder/

Well Buster will be having the same articles written about his little wheeze.

 

[eek]

11 hours ago, spygirl said:

Well Buster will be having the same articles written about his little wheeze.

 

Yep Buster has probably forgotten the fundamental point - if it looks like a tax whiz HMRC will identify the route of maximum income for them and argue whatever is required to get to that point.

Which probably means - capital gains at the point of transfer AND income tax on interest payments being required because of the partnership element of the process.

Most people would have been better off getting wifey not to work and putting everything in her name.

[MrXxxx]

https://www.msn.com/en-gb/money/homeandproperty/landlords-bill-threatens-to-hammer-final-nail-in-the-buy-to-let-coffin/ar-AA1bbGqA?ocid=mailsignout&pc=U591&cvid=37232602d21046a5ae745b72f6dc74d5&ei=50

QUOTE:

"Labour's Lisa Nandy, shadow levelling up secretary, has piled pressure on Mr Gove not to “roll over” to Conservative backbenchers, and progress with the rental reform promises that date back to the Conservative’s 2019 manifesto."

...because it would be so unlike a government to renege on election promises wouldn't it?!

 

QUOTE:

"However, Craig Mackinlay, Conservative MP for South Thanet in Kent, said: “The reality is, landlords will abandon the market and we will have a very serious housing crisis on our hands. I’m worried about landlords leaving the market, I really am. There’s a huge amount of disquiet about this. From colleagues I’m talking to, they’re not happy. We have seen too much of a war against landlords.”

"Marco Longhi, Tory MP for Dudley North, said legislating the renters' reform bill was “like wielding a hammer to crack a nutshell”. He said: “It’s a disaster. You will see huge swathes of landlords leave the market, and this has been happening for several months already."

"Mr Mackinlay and Mr Longhi, who are landlords themselves, fear that the abolition of ‘no-fault’ evictions – otherwise known as Section 21 – could prompt yet more buy-to-let investors to abandon their livelihoods."

...Oh, now I see what the issue is!

 

QUOTE:

"Universities have already warned the Government that the introduction of rolling tenancies could make it difficult for landlords who let on short fixed term basis to students.

One mortgage lender told The Telegraph: “Student landlords need the freedom to book up the academic year in advance. It’d be the end of fixed-term landlords if student properties aren’t exempt."

...but this is not what is being proposed as student as well as tied accommodation has always been exempt.

 

QUOTE:

"Supply of student housing has shrunk in recent years, with 31pc fewer five-or-more-bed properties listed for rent in the first quarter of 2023 compared to before the pandemic, according to estate agency Savills."

So what has happened to these houses, have they 'evaporated'?...or do they mean that the proportion of housing to number of students has reduced due to sufficient accommodation not being developed to keep up with an increasing number of students?

[https://www.hepi.ac.uk/2022/11/11/why-there-should-be-no-surprises-about-the-growing-student-housing-shortage/]

 

[https://www.hepi.ac.uk/2023/03/28/developments-in-student-accommodation-march-2023/]

 

..."but universities have been building a lot of their own accommodation haven't they?"...yes, but a) its generally now of a higher quality/ensuite so more expensive that a private sector house share, and b) most universities guarantee all overseas First year students on site accommodation [to encourage enrolment to their university] before UK national..so lets see how recruitment may influence this:

 

Dramatically increased non-EU student numbers, and these primarily from the new found wealthy in two major Developing economies i.e. India and China...and why recruit non-EU students over EU students?....for most course universities can charge then 2-3 times as much, hence they have become a 'cash cow' in the industry we like to pretend is education.

 

 

[spygirl]

Who knows ... theremight be some good newswire LLs.

https://www.telegraph.co.uk/property/buy-to-let/michael-gove-war-on-landlords-buy-to-let-housing-crisis/

Probably not.

Assuming telewags chart is accurate then nio all btl ll are morons.

But the person eho produces tte charts is.

Out the fucking axes number in the piccyffs.

[sancho panza]

 

https://www.thisismoney.co.uk/money/buytolet/article-12073321/HMRC-orders-soaring-numbers-landlords-pay-millions-pounds-fines.html

HMRC orders soaring numbers of buy-to-let landlords to pay millions of pounds in fines and back taxes - with the number targeted up 83% in a year

• Property investors are being caught out by a renewed HMRC push on taxes
• Almost 5,500 landlords were caught last year, with £33million clawed back 

Growing numbers of landlords are being caught and fined for under-paying income tax - with HM Revenue & Customs catching 83 per cent more last year.

The taxman found 5,429 landlords did not declare enough income tax in 2022/23, up 83 per cent in a year.

HMRC clawed back £33million in tax from these landlords - £6,078 each on average - up 73 per cent from £19.3million in 2021/22.

Meanwhile HMRC fined landlords £2million last tax year, up 53 per cent from £1.3million the year before, according to a Freedom of Information request by This is Money.

Many will have tried to dodge tax deliberately, while others will be the victims of their own poor book-keeping.

HMRC targets landlords through its 'Let Property' campaign, which launched in September 2013.The campaign was meant to target the 1.5million landlords HMRC thought were underpaying tax on rental income to the tune of £500million a year.

It was initially meant to run for 18 months, but instead has lasted for 10 years.

Under the scheme, HMRC can claw back up to 20 years of underpaid tax, fine landlords up to 100 per cent of any outstanding tax, or 200 per cent for cash held offshore, and can even prosecute.

But if a landlord has made a genuine mistake with their tax returns, HMRC only reclaims up to six years of underpaid tax and will only issue smaller fines, if any at all.

An HMRC spokesperson said: 'The Let Property Campaign is an opportunity for landlords who owe tax through letting out residential property, in the UK or abroad, to get up to date with their tax affairs in a simple, straightforward way and take advantage of the best possible terms.

[sancho panza]

8 months old but itneresting imho

https://www.thisismoney.co.uk/money/mortgageshome/article-11352963/Is-age-buy-let-landlord-crashing-end.html

Is buy-to-let's golden age crashing to an end? It's getting harder to profit from property - as Alice found when it took her 456 days to evict a tenant

• Alice's tenant refused to pay a penny of rent beyond the first month
• Landlord possession claims surged 160%  between April and June 2022 
• Number of actual repossessions granted rose 210% - from 1,582 to 4,900 
• Experts say system at breaking point as landlords face huge backlogs and delays

When she met him in person, Alice was struck by what she perceived as his 'great honesty'.

Little did the 35-year-old writer know she had actually just given her keys to a tenant from hell who refused to pay a penny of rent beyond the first month — costing her £31,000 in lost income.

Some 456 days later, she has only just managed to evict him — with the help of court-ordered bailiffs.

'It took six months of unpaid rent for the penny to drop,' says Alice. I stopped hopefully checking my online banking every few hours, but he refused to leave my flat. That was the worst moment.'

Cases like Alice's are being repeated across the country.

Landlord possession claims surged 160 per cent between April and June 2022, compared to the same period last year.

Meanwhile, the number of actual repossessions granted rose 210 per cent — from 1,582 to 4,900, according to figures from the Ministry of Justice (MoJ).

The stark rise is due to evictions being banned between August 29, 2020, and May 31, 2021, to protect tenants during the coronavirus pandemic.

But as a result, experts say the system is now at breaking point as landlords face huge backlogs and delays. They warn the courts could soon be flooded with similar cases as the cost of living crisis pushes more renters into arrears.

Jasvinder Singh knows this pain all too well.T he 41-year-old was forced to watch on in horror as his tenant destroyed his beloved three-bedroom flat in Ilford, East London — all while falling into more than £6,000 arrears.

It took him more than a year — and three bailiffs — to evict her. While he applied for a Section 8 notice, he eventually got her out on a Section 21 as it was quicker.

[MrXxxx]

Thought I would ahre this figure that I came across on changes in UK house ownership:

SOURCE:https://www.ft.com/content/e36cec28-7acd-4154-b57d-923b5d1610da

I think it's pretty self-explanatory, but what is interesting especially are the increase in Jersey and the BVI [British Virgin Islands?]...are these offshore tax haven registered companies investing?.... and is it going to become move apparent as we move forward with amateur BTL LL 'forced' out of the BTL market by government policies?

[spygirl]

Cutnpaste of my TOS post  -

A long long long time ago ....

Cant be arsed.

Quick google -

https://www.propertymark.co.uk/resource/celebrating-25-years-of-buy-to-let-mortgages.html

https://www.paragonbankinggroup.co.uk/news/insights/a-brief-history-of-buy-to-let

In short, until 1996 no bank would lend to LL.

Most LL mortgages tended to be from finance companies rather than bank and very very low LTV - sub 50%

And very expensive. So expensive dont think I came across a single LL who had a mortgage.

Rentals were bought with cash - no leverage.

ARLA lobbied and lobbied. Its main pitch as since the 88s tenancy reforms that a bank di not have to be afraid of lending to LL.

Why were banks afraid - long term memory of renters with secure lifetime tenancy.

If the LL defaulted on the mortgage then the ban would have to wait til the tanct died before it could repo the house.

How longs a piece of string?

And all time time theyd not get any money on the loan.

This is a cluserfk for banks - banks make money from selling credit/debt not renting out houses.

Selling debt gives a far far higher return than renting houses.

And banks capital are hammered by defaulting loans.

So ARLA lobbied and spun lobbied and spun -

The 88 tenancy reforms mean thats not a problem anymore.

If the LL stops paying the mortgage then the banks takes possession and issues an S21 notice and can reclaim the house in 2 months.

A cheap, guaranteed process with limited to none legal fkwittery.

Whats not to like mainstream bank?

No Id point out thats theres nothign cheap or simple or quick about S21. S12 is a polite request for a tenant to leave.

If they dont leave - which is well within their legal rights - then the LL has to go to court to get an eviction notice.

And court process take a lot longer than youd think.

Any how, despite the 1996 creation date, BTL didnt become a mainstream  thing tilthe early 00s.

And do you know what happened?Very little.

Because the initial BTL mortgages were all repayment, and tended to be shorter terms - 10-15 y.

Better than nothign I guess..

Well, apart from the monthly mortgage repayments were a lot higher than the rental income.

Borrow 100k! Pay 10k/y for ~7k a year rent!

So they lobbied an re-invented BTL as IO BTL.

Thats a different massive problem thats landing a couple of years time.

Quick summary -

Banks do not want to lend where the process of repoing the house is indeterminate, expensive and involves 3rd parties rights and legal process.

Banks want the contract and process to be just between them and the person borrowing the money.

That way they know who they are lending to and the process of repoing a house.

Remove the pretence of S21 and banks will not lend to LLs.

It that simple.

BTL are commercial mortgages.

If a bank takes fright of its lending - or just doesnt like the colour of the LL socks then it can call the loan in, esp, if it thinks another bank will do it first.

There is no regulation or rules behind commercial lending.

A bank can ask for the money back by the end of the month.

This is why SME hate borrowing money from banks.

Its over -

No-fault evictions to be banned in reform of rental sector

https://www.bbc.co.uk/news/uk-politics-65612842

he family rented a property in Greater Manchester for about five years.

They never missed a rental payment, and were happy with the property, until problems with mould and a leaking roof became progressively worse.

Mr Robinson said he reported the issue, and a few days after the property was inspected by the landlord, they were issued a Section 21 notice.

"I was heartbroken, I didn't know what to say to my partner," Mr Robinson said. "We'd made a family home there. We were there for the long term."

Now the family are paying more rent after moving to another property near Manchester earlier this year.

 

BTL was fine for the small sector of working, orderly  HMOs - young working people house sharing. Or commercial tenants on short term lets.

But thats a tiny market.

Banks n LL got v  greedy.

So BTL started housing families, social tenant etc etc.

 

[Ash4781b]

5 hours ago, spygirl said:

Cutnpaste of my TOS post  -

A long long long time ago ....

Cant be arsed.

Quick google -

https://www.propertymark.co.uk/resource/celebrating-25-years-of-buy-to-let-mortgages.html

https://www.paragonbankinggroup.co.uk/news/insights/a-brief-history-of-buy-to-let

In short, until 1996 no bank would lend to LL.

Most LL mortgages tended to be from finance companies rather than bank and very very low LTV - sub 50%

And very expensive. So expensive dont think I came across a single LL who had a mortgage.

Rentals were bought with cash - no leverage.

ARLA lobbied and lobbied. Its main pitch as since the 88s tenancy reforms that a bank di not have to be afraid of lending to LL.

Why were banks afraid - long term memory of renters with secure lifetime tenancy.

If the LL defaulted on the mortgage then the ban would have to wait til the tanct died before it could repo the house.

How longs a piece of string?

And all time time theyd not get any money on the loan.

This is a cluserfk for banks - banks make money from selling credit/debt not renting out houses.

Selling debt gives a far far higher return than renting houses.

And banks capital are hammered by defaulting loans.

So ARLA lobbied and spun lobbied and spun -

The 88 tenancy reforms mean thats not a problem anymore.

If the LL stops paying the mortgage then the banks takes possession and issues an S21 notice and can reclaim the house in 2 months.

A cheap, guaranteed process with limited to none legal fkwittery.

Whats not to like mainstream bank?

No Id point out thats theres nothign cheap or simple or quick about S21. S12 is a polite request for a tenant to leave.

If they dont leave - which is well within their legal rights - then the LL has to go to court to get an eviction notice.

And court process take a lot longer than youd think.

Any how, despite the 1996 creation date, BTL didnt become a mainstream  thing tilthe early 00s.

And do you know what happened?Very little.

Because the initial BTL mortgages were all repayment, and tended to be shorter terms - 10-15 y.

Better than nothign I guess..

Well, apart from the monthly mortgage repayments were a lot higher than the rental income.

Borrow 100k! Pay 10k/y for ~7k a year rent!

So they lobbied an re-invented BTL as IO BTL.

Thats a different massive problem thats landing a couple of years time.

Quick summary -

Banks do not want to lend where the process of repoing the house is indeterminate, expensive and involves 3rd parties rights and legal process.

Banks want the contract and process to be just between them and the person borrowing the money.

That way they know who they are lending to and the process of repoing a house.

Remove the pretence of S21 and banks will not lend to LLs.

It that simple.

BTL are commercial mortgages.

If a bank takes fright of its lending - or just doesnt like the colour of the LL socks then it can call the loan in, esp, if it thinks another bank will do it first.

There is no regulation or rules behind commercial lending.

A bank can ask for the money back by the end of the month.

This is why SME hate borrowing money from banks.

Its over -

No-fault evictions to be banned in reform of rental sector

https://www.bbc.co.uk/news/uk-politics-65612842

he family rented a property in Greater Manchester for about five years.

They never missed a rental payment, and were happy with the property, until problems with mould and a leaking roof became progressively worse.

Mr Robinson said he reported the issue, and a few days after the property was inspected by the landlord, they were issued a Section 21 notice.

"I was heartbroken, I didn't know what to say to my partner," Mr Robinson said. "We'd made a family home there. We were there for the long term."

Now the family are paying more rent after moving to another property near Manchester earlier this year.

 

BTL was fine for the small sector of working, orderly  HMOs - young working people house sharing. Or commercial tenants on short term lets.

But thats a tiny market.

Banks n LL got v  greedy.

So BTL started housing families, social tenant etc etc.

 

“Under the new law, tenants would be given the legal right to request to keep a pet in their home, which the landlord cannot unreasonably refuse.

The law would also make it illegal for a landlord to refuse tenancies to families with children, or those in receipt of benefits.”

 

In addition to no fault. It will be interesting reading the bill. Private Landlords not going to be happy at all. I’m not sure if also apply to smoking? 

[spygirl]

14 minutes ago, Ash4781b said:

“Under the new law, tenants would be given the legal right to request to keep a pet in their home, which the landlord cannot unreasonably refuse.

The law would also make it illegal for a landlord to refuse tenancies to families with children, or those in receipt of benefits.”

 

In addition to no fault. It will be interesting reading the bill. Private Landlords not going to be happy at all. I’m not sure if also apply to smoking? 

 

Therell be a lot of fliff and does n donts.

They are all iirelvant.

Frankly, you can void benefits tenants by setting rent above LHA.

The issue is - and I dont think Gove was beign lcever eough to target this, i nthe same wy S24 n mortgage releif did - is that its the removal of prentese of automatci being able to repo the house by the bank.

Poof!

No regualted bank will do any more BTL lending. Ever.

Its that simple.

LL mortgages will go back to what they were before ~2002ish - low to no levereage, mainly cash, only from finanance company.

 

 

 

[Boon]

TBH I think the pets is a non-issue really.

Like once you rent somewhere you can do what the hell you want as long as you return it in the same condition minus wear and tear. If the carpets smell of dog and the tenant doesn't put that right there is still gonna be a deduction on the deposit at the end.

The bigger effect is that it'll get a lot of the amateur landlords wetting their pants, particularly those who are undercapitalised/overleveraged. And why would a bank want to lend to these?? Clearly that's on the way out.

There will be usual scaremongering about 'rents will go up' which will happen in some areas, but not others. Longer term this is not a bad thing overall.

[Wight Flight]

Just now, Boon said:

TBH I think the pets is a non-issue really.

You may think so. To me it is a real headache in more ways than one.