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I partly agree with you. Certainly interest rates have been too low for savers, but you are wrong about addet prices.. Aroubd here house price did not recover to 2007 level until 2016. In other places they still have not recovered. The local variations show that bational policies have not been the driving factors. Around here it is the revelopment of Manchester city centre which started over 15 years ago and the improved infrastructure, particularly the ttram system . For my one sothern property ir has been cross rail 2 that pushed it up and the cobversion of offices to flats that has pushed it back .
Mortgage rates are low, but the acceptable LTV have dropped. I.e. biigger deposits have been needed. Partly the cause was that the banks were getting money from the government so didn't need to lend as much. Just as the LTVs started to creep up again new rules came in restrict them, though after the period you mentioned, as is the extra tax.
Whilst there was no gravy train around here from 2010 to 2016 it appears as if one might just be setting off. - 8% net yields plus 6% capital growth last year. That makes a change. You can still buy 2 bed properties for under £70k here.
A far more effective device to control BTL much like was done with resi mortgages would be to ban IO mortgages in excess of 50% LTV.
Such a requirement would very effectively collapse most new BTL lending.
S24 etc wouldn't be needed.
But of course having such a reduced LTV requirement would collapse SDLT receipts.
Much like credit card lenders massively reduced credit limits I see no problems in reducing mortgage credit limits for new lending on new properties.
Intoducing a 50% LTV would prevent many new rental properties being bought.
Or it might restrict such properties being bought to one rather than say 2.
I know if I had been subject to a 50% LTV requirement I would have simply purchased 2 properties rather than the 4 I eventually did.
Same pot of money invested; just 2 properties rather than 4.
I would not have considered such a LTV restriction as in anyway incorrect.
They would be the regulations and one invests accordingly.
I believe there is much scope for Govt to reduce overall LTV by incentivisation
So perhaps no CGT on a property if you reduce LTV to 50%.
That would achieve a Govt objective as many LL would sell so as to achieve eventual CGT free sales.
But for now I certainly believe that for all new BTL property purchases that the PRA should impose a 50% LTV maximum.
This would cause an almost shutting down of new purchases which would decimate the newly leveraged BTL PRS but it would most effectively fast track what Govt is trying to do.
That is to stop the PRS increasing.
Of course that means mass homelessness but Govt isn't bothered by this.
For incumbent LL I would thoroughly welcome a massive contraction in the PRS as it would mean I can jack up my rents even more for what would be a very scarce resource.
So I would heartily welcome a massive reduction in mortgage credit available to LL.
Of course it would mean many unemployed for all those involved in the PRS and would particularly hit the profits of BTL lenders big time.
Perhaps that would be no bad thing as they could then divert from LL to coming up with relevant offers for homebuyers.
You know like offering 45 year mortgages fixed at 3% like they do in tbe USA.
There needs to be less emphasis on having funding available for LL and more for homebuyers.
I would far prefer there to be a far smaller PRS in exchange for a larger homeowner sector even if that results in mass homelessness.
I simply don't care how many homeless there and neither does the Govt.
They seem hell bent on creating more homeless as they continue their attacks on the PRS forcing many LL to sell up.
All LL have ever done is respond to demand.
It wasn't the fault of LL that rental demand was created.
LL just responded to it.
I do care about homelessness, frankly, decent people should.
Rent in Brighton and Hove is rising faster than in any other city in England and Wales.
Between 2017 and 2018, the cost of renting in the city has increased by 8.2 per cent, a figure topped only by Dundee, where it has grown by 8.5 per cent.Full/source articleThe Argus puts this down to BTL tax changes!
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**