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  • Buy-to-Let

    It's been a long 3 years ...

    As a professional investor I have always excepted change in Regulation and Taxation nothing stays the same

    We are now entering the second phase of S24 Taxation

    I look back at the past three years with lots of thoughts and opinions

    So where has the past three years left me

    well number one I haven't purchased a property since Osborne Law came

    This is quite a hard thing for me to do since 2000 I was busy buying property month in month out so coming off the drug has not been easy

    The direction of my Business has changed I no longer wish to purchase leveraged BTL and I have moved on to Build to Rent with out leverage ? again my mind-set

    I have been investing into my ISA with my Wife and I am looking far more now a Tax efficient structures then ever before

    Pension Planning has came into my Life again paying with Self Employed Earnings and my Directors Pension

    I have now gone down the Ltd Co route doing the Landlord shuffle  I am now well into selling more property into my company its costing me around 4k a time to do this but the rewards when S24 do fully hit home will be helpful

    I fully relies I can not defeat S24 but I can reduce its impact by around 50%

    Looking back I have seen a major change in my Business personality

    Because of Taxation BTL I fully realise that buying more BTL is not worth the effort

    I have ran the figs over and over again and its just not worth putting one penny of new money into BTL

    I find it quite Ironic I became a Landlord to provide for my later years and now I find that my BTL is paying into my pension

    What will the future bring is Well that's the 100 million pound question

    But I do think diversification of Investments is a wise move

    I have been proved wrong having 100% confidence in BTL

    Not because its a bad investment its because its become very tax unfriendly investment

    so here is to the next phase of S24 Higher Tax Bills and more  Regulation


    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.

    I largely came off the property drug in 2012 - Enough is enough I said one day to myself

    I have relapsed 3 times since then to buy  - 2 of which were just to negate the effects of S24 though

    The rent on them will pay the sec 24 tax this year and some  -

    I havent gone the company route . I fought fire with fire and bought some more to pay the bill

    Each one nets about 7K pa plus capital growth at say 3% pa means a gain of 10K pa

    For me I was proved right to have 100% confidence in BTL 2 decades ago

    It took me from me being Joe average to the top 1%

    Sec24 wont dent that - all its done is rearrange that

    Its probably done the same for you  DL , just rearranged your wealth

    We now diversify which is exiting . New challenges - You do build to rent . I`m doing other stuff

    New investors have rearranged as well - They buy in a company now and lower their % of  leverage maybe

    But they are still very eager to invest in BTL because they see what I saw 2 decades ago

    They are eager and chomping at the bit .

    They want their share of the new BTL cake with different ingredients and why not . I see it every day

    Master chef would be boring if everyone baked the same dish .

    They realise they will have to fight a bit harder for their share of the cake but they are up for the fight

    Looking back it was easy in relative terms for me . Still hard work but well worth it to get the blossom at the end

    Another one completes next week for an investor I know .

    Takes him from 6 to 7 now and hes not stopping there

    The fundamentals are still there for the new breed of BTL investor  .

    They see it through a different lens .


    Jonathan Clarke. http://www.buytoletmk.com


    Agree. fight fire with fire.

    if all goes to plan I should hit breakeven in 2018/19. meaning that my portfolio re-arranging and adding new sources of property-related income should equal my extra S.24 tax. Tenants are squealing!

    In 2019/20 I plan to do a small development! Exciting....


    JC, just a quick one;  big Thanks for this post! Its awesome. Yep, screw the S24 and do exactly the opposite as the masses.

    Did not think about this (now very obvious) solution, got me excited already, Thanks



    For clarity, are the two additional properties purchased with cash or mortgages and if the latter can you advise the ltv?


    So in effect increasing income whilst reducing leverage as a percentage across your portfolio.


    Yes that`s right  . I cannot bring myself to pay down mortgages though to reduce leverage further

    Those mortgages were tough to obtain  I really dont want to give them up so easily

    Inflation , capital growth and rent increases will over time erode their hold over me

    Time is a great healer in property .  You can go from 75% LTV to 50% just by doing nothing

    Doing nothing is in fact a positive option to reduce LTV

    If the money is In my bank I`m in control and it gives me flexibility to buy if I want to

    How maddening it would be to miss out on the deal of the decade just because I bottled and paid off some debt

    My punt is I can  match S24 and mitigate its effects  by purchasing more assets

    Its a  - 50 round ( year) fight with the gov as I see it

     I won the first 18 rounds by a mile so I cant really complain. I outpointed them by 1000 points

    The rules were totally in my favour

    The gov saw this and changed the rules mid fight . Naughty - but they are the boss at the end of the day

    The gov will win the next 2 - 4 rounds maybe while i consolidate .

    Respect to them even if they did hit me below the belt . The JR  referee didn't see it that way though

    Then rounds 22 - 50 will be mine again all being well


    Jonathan Clarke. http://www.buytoletmk.com

    Would you do the same strategy if you had to refinance for the deposit, but would but the new properties in LTD Co? might need more than 2 properties to cover the S24 though.


    Possibly yes , but yes as you say you may need more than 2 as the cash flow on each would be naturally reduced

    Just buy what you need to break even on S24 .

    Maybe 1 a year over the next 4 years it takes effect  will cover  it

    And yes probably depending on your circs buy in a Ltd company if mortgaged to protect it against S24

    When I had a job if my bills went up I worked a bit more overtime to pay them

    2 hrs 4hrs  8hrs  etc . You do what you need to do to stay ahead of the curve

    Rental income is equivalent of my job wage . My tax bill has just gone up

    If I buy 2 more I just get paid more rental overtime to pay my bill


    Jonathan Clarke. http://www.buytoletmk.com