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About 10 years ago we had the Credit Crunch in the UK
My Business lost 50% of its capital value and number of my properties went into negative equity
Base rate dropped to record levels
Tighter Lending came and we all had to rethink the way we did business
I made the best of a bad job keeping my cool and looking for the silver lining
The Sliver lining was if my property is down by 50% so is the rest of the market
So armed with the new lending rules I set of saving deposits and doubling the size of my business
being prudent and borrowing on sensible lines Fixed rates long term
My old properties started growing and have now recovered 25% of the Loses so I am still in negative equty with a handful of properties
Cash flow has never been better
Then we had the attacks on BTL and other business
We have little defence with the attacks and after reading the blogs on PT
I get the feeing Landlords are getting tired and worried about all the changes
I thought 2007 was Bad I think 2017 is much worse its the drip drip effect that the attacks are having on the sector which is doing
so much damage
From what I can see its going to get worse by the month more Landlord realising the effects this is having on there plans for now
BTL is becoming a nightmare for a number of us and its not on
None of us deserve to be treated by a Conservative Govt in the way we have done
I hope for better things to come
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.
DL, I couldn't agree more.
When I do my yearly accounts, I have a spreadsheet that calculates my taxable income. It gives two figures;
One is the profit I have actually made, and which I am happy to pay my fair share of tax on like everyone else.Every year I pay what is due and abide by the law.
The other is adjusted for S24, and is a fictional profit figure showing money I have never seen, never had in my bank, and doesn't actually exist. This is the amount I now, as a hated Landlord I have to pay tax on. To call this Criminal is an understatement. But don't think this Government are going to stop anytime soon, as no one, I repeat no one will have any sympathy for us, they can do what they like.
And I wont even mention what the Corbynistas will do to us.
Serves me right for trying to provide an income and livelihood for me and my family and not relying on the State.
As a new comer to BTL listening to others is worrying, my first (purchased in July) is due to be on the market by the end of year and my second purchase should complete at the same time. Now I'm looking at it as, if I would have got in a few years back I would now be feeling worse off however as long as no more penalties come in for us I should be ok as I'm starting where I am with the new regs.
As you say, silver linings
I'm just glad the single let I have has no mortgage. I'm just going to sit tight and play the 'wait and see' game for now. I'll sell if I have to, but that house is my (very small) pension, so I really don't want to have to do that.
The problem we have is the Govt moving the goal posts again
I fee as though I am looking over my shoulder all the time trying to pre-empt what the govt are going to do next
Licences for all Property let
DL you are very negative on the market. If you believe things are on the way down why don't you sell up and move into another type of investment?
Well I am optimistic for my own business
I am now a Build To rent Landlord
and I will be fine
I am not optimistic with the General BTL sector
I have met a great number of Landlords who are going to feel real pain in coming years
I net work quite a bit and its all very negative indeed
I stated my Planning two years ago to save myself a lot of Tax
I do have faith in the Principles of BTL and if a Landlord change learn and adapt there is a future
Do you not sense the negativity that's coming to the sector now
Its building and will become stronger
For me I can pull up the Ladder But for others there is no ladder
It has not been easy but I can survive and flourish in Build To Rent
But I will not be buying the every day BTL stuff I have been buying over the past 30 years
I think you'll find that many LL would love to sell up.
Unfortunately they can't as to do so would cause bankruptcy
Many LL who have leveraged property over the years have CGT liabilities that could not be paid.
They have little choice than to stay in the game.
But there are many issues that will militate against such LL remaining.
It will be far harder for them to do so.
Many LL can see all the problems; there is just not a lot we can do about it.
This will always occur when you move goalposts retrospectively.
These LL are dead men walking.
A lot of them just don't know it yet!!
S24 in particular is designed to eradicate the leveraged sole trader LL
Corporate mortgaged sole traders are untouched yet have exactly the same effects on the PRS as the mortgaged sole trader LL.
If it is correct as has been alleged by the stupid Govt that leveraged LL are preventing FTB from buying then why are corporate LL not included !!!???
According to Govt it is the fact that a LL is a LL that prevents FTB from buying.
If you accept that premise then ALL mortgaged LL should be hit with S24 type taxes.
So to level the playing field I would ensure that ALL mortgaged LL have the same tax burdens
It is unfair that corporate LL avoid S24 tax burdens.
So let all mortgage debt interest on any BTL or LTB mortgage be considered as fictitious income to be taxed so that ALL mortgaged LL face the same tax burdens
Why should corporate LL avoid competition because S24 tax removes much of that competition?
I know what your saying about coparate Landlords and it avoids S24
But the sting in the tail is how you extract profits
and Even if a Director Landlord doesn't take an income and just builds capital there is not CGT allowance
also I think the Govt has just stopped indexation on corporate sales
so when a Director sells he will pay cop tax on the profits
and then most likely take the profits via a dividend and more tax is payable
Ltd Co avoids S24 but a boat load of other taxes are payable on income or a sale
so its not all bells and whistles in company paul
No I do get the corporate issues and it would be hard to ensure that corporate LL suffered the same detriment as S24 LL.
But worthy of investigation.
All mortgaged LL no matter what their business status should suffer equal detriment however that is arrived at.
It is not beyond the wit of man or the Treasury to devise such tax policies that all mortgaged LL suffer the same tax on fictitious income
It is the day to day effects of S24 that should somehow be visited on corporate LL as well
I totally its unfair
But there is a sting in the tail in ltd co
But as you know Ltd Co are not going through the turmoil personal Landlords are
The Govt want Ltd Co to build to rent and on the back of that institutions will also invest as some point in time
The Retrospective element of S24 is wrong
I think most of us would have gone along and said ok fair enough and moved on
If the law said going forward if you want to invest in property it has to b via a company