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  • Tax

    Tory Govt does not support entrepreneurism!



    I always thought that the Conservative Party was the Party that supported ambition and wealth

    Today I had a good meeting with a very Good Estate Agent who is very well thought of in my area of the NE

    It's run buy a young man who has his head screwed on and it's professional and slick

    The meeting today was for me to sound off and see what his thoughts are about the BTL Industry in the UK today

    We chatted about all areas of property investment

    At the end of the meeting he said I really want you to buy property from me - But once he realised the situation S24 and General tax has taken me he agreed it was not worth the effort

    The reaction and his view came as a bit of a shock

    In a nutshell, I agreed to just sit on my hands and do nothing further for expansion - Manage what I have and make the most of it

    We discussed the use of pensions and he agreed that all further cash would be better spent putting it into My and My wife's pension

    The result is I am now at a standstill

    It comes to something when a Govt takes away ambition

    I have been in this game long enough to realise when enough is enough

    I think there is room for new entrants into BTL but I also think there is a ceiling to how large a Landlord can get

    I have never minded paying my fair share of tax, but running a Company and seeing the way a company and its Directors are Taxed  with Dividend Taxes Salary Taxes, its just not worth the effort or the risk for a Higher Rate Tax Payer

    We are all in this Game for profit But, I am sorry Mr Hammond, I am not prepared to pay over 50% Tax to get my hands on a profit

    This game is well and truly stuffed from the point of expansion

    And its all because of Cameron and Osborne clipping my wings

    I don't mind change but I do mind when politicians stop ambition

    WELL That's Got That of my Chest. Rant Over!!

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    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.

    Which begs the question as to whether the shrinkage of BTL (130,000 fewer units recently) will mean higher home ownership and/or more empty property in locations with few jobs - or just remaining stock held by fewer landlords.

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    I agree wholeheartedly.  I have spent more than 30 years building businesses to house people, but now it is simply not worth further expansion through hard work and risk taking.  For the last year I have been managing my existing tenants and enjoying having lots of time to myself to do as I please.  This government has made it not worthwhile to bring run down property back into decent housing anymore.  The people who suffer are those that I would have provided housing for, but now I will not.

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    Remains to be seen whether youngish FTBs will revert to doing what many of their parents did ie buying rundown properties and refurbing as they can afford it - then moving up ladder maybe by doing a rinse&repeat exercise a few times until they build up substantial equity.

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    The problem is that most homeowners do not want (or are unable) to spend a lot of their free time renovating a home, and if you employ anyone to do the work for you it soon gets very expensive.

    The FTBs (& home owners) I know consider repainting a room to be a major DIY task - anything more is beyond them. I also know people working full time who have made a concious descision to pay to have work done, as they want to spend their free time with their family.

    I believe the only 2 options when a refurb can make economic sense is if it is bought very cheaply or if the owner is able and willing to do the work themselves. As a result very few FTBs are in a position to buy a run down property and sucessfully refurbish it.

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    Agreed - I was focusing on FTBs who are versatile and capable of DIY - with the foresight to see that they get the home they want for a considerable discount versus a similar home that is as shiny as the proverbial pin - and thus latter appeals to more buyers who bid up the price.

    I was also thinking of those aspiring FTBs whose finances are marginal as they have no BOMAD help to boost deposit.

    As for being capable of doing DIY jobs - we have the marvellous U-Tube resource for almost any task imaginable for those needing a tutorial.

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    I was chatting to a long term renter the other day who is opting to become a first time buyer. In the past few years the property has had a new roof, replacement double glazing and an upgraded boiler. A new kitchen is about to be fitted. The purchase will be heavily discounted, by 60% I believe. The mortgage will be covered by the rental of the partner's property, which has been similarly renovated and discounted. The children have already left the nest and started their property investment journey. Not all FTBs struggle with renovations and there is still some government support for entrepreneurial property investors.

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    Why is there a 60% discount Gary - is this a Council RTB sale?

    I am aware that RTB sales still run at around 12000 pa.

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    Yes, 2 long term council tenants who have decided to buy and pool their resources.

    I don't agree with RTB but I fully understand the tenants taking advantage of what is available to them. They seem switched on and will probably have the mortgages cleared within 10 years.

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    In current low interest environment one can borrow £100k over 25 yrs for around £100 weekly repayment - so agreed it os easy to envisage overpaying and being mortgage free in a decade.

    That said almost no RTB sale anywhere near SE gets a 60% discount due to the circa £78k discount cap outside London - ie gross value would need to be no more than say £200k.

    In Home Counties real discount is probably no more than 30% - and in central London can be 10% or less (with half that "clawed back" in SDLT).

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    Correction max RTB discount outside London is now £80900.

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