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  • Tax

    I shoud not have remortgaged in the past

    The dark room is quite nice really

    I am just sitting this out and enjoying the rest to be honest

    Spending some cash on the nicer things in life

    No point flogging myself for the Govt to trip me up in the future

    best of luck

    DL

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    Learn Change and Adapt ?????

    PRA is designed to stop Landlords over Borrowing

    There must be dangers in otherwise the Govt would have never thought up the Plan

    Landlords with High Cash flow can use the rules to there own advantage

    Just save the deposits and all will work out well

    Cash is still king just don't borrow it beyond the limits of PRA

    a good deposit of 25% or 30% within a company and it works well


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    Learn Change and Adapt ?????

    The BoE explained the dangers it saw in a 2014 paper.  They were dangers to the financial system if a crash or interest rate rise caused over optimistic, over extended highly leveraged large BTL investors to be unable to pay their mortgages.

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    AS a rule of thumb


    Monthly rent x 12  divided by 5.5% divided by 145%

    800pcm rent could achieve a Mortgage of £120,376

    This alone will stop over lending in the future

    The strange thing is PRA rules if they had been around in 2007 would not have stopped me borrowing

    as my yields are high


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    Learn Change and Adapt ?????


    LTV is certainly a factor when looking at S24, but not the only one.  Two identical mortgage situations will produce dramatically different results where one loan is on a single let that just washes its face but the other is on a very high yielding HMO.

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    Yield is King your totally right

    It gives a Landlord the Opportunity to either Pay down the Debt

    or use the funds to buy more property with a good deposit

    My old Mortgages are not ready to be repaid for another 10 years  so I had time to sort this out

    The important thing I think is not to have a plan

    I could have spent the extra cash when interest rates dropped but I did not take the option

    Hindsight is a great thing but in the long run things will work out fine

    I just would not take that road again when you see a debt higher than the Value of a property its not a great thing

    so I have learned my lesson No More Remortageing in the future even if PRA allowed it

    Property Prices can fall as well as rise and its important to remember that

    But If the yield is good the problem can be defeated




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    Learn Change and Adapt ?????

    On the plus side, for those who have remortgaged to the hilt to fund expansion in the past, S24 should not be such a shock, as interest on any borrowing beyond the original purchase price was never subject to tax-relief.




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    Oh yes it was providing the funds were used for investing and not on an expensive  foreign holiday

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