[Finance] Buy to Let Mortgages

LlcoolJ · Mar 9, 2018

Uncle C said:
Sadly we are not talking about people who bought quite a few years ago, but deluded idiots today who still think its viable.

Still plenty of options in the "not ridiculously priced" property market up North. Also not difficult for first time buyers to get on the ladder. Nice houses in nice areas too. The south east is a different country completely property wise.

I agree that the idea of jumping on the BTL bandwagon is akin to scrabbling for a lifeboat on the Titanic though. For most.

osgood · Mar 9, 2018

Renegade1 said:
How?

You know what,there are plenty of my generation also who do not own homes.I'm from an older generation.You want to know why?Because when I was 18 and buying my first house as an investement with my parents,others around my age were spending their money on cars,clothes and entertainment.Many of these have never owned a home or instead own a small flat when they could have owned a large house.As for the younger generation,not quite sure how landlords are freezing them out.There's me thinking it was down to a growing population,houses not being built,plus natural market forces.What do I know.

Well , Obviously im not saying that its JUST you that is the problem , merely that yourself ,and thousands of other like-minded folk arnt exactly helping todays younger generation , (by removing yet another property from what would have been available the younger generation of FTBs )
while the majority of our generation had the choice you mention , (cars clothing etc) OR purchase a large house , that choice is impossible for the majority of this present generation

Uncle Spielberg · Mar 9, 2018

osgood said:
Well , Obviously im not saying that its JUST you that is the problem , merely that yourself ,and thousands of other like-minded folk arnt exactly helping todays younger generation , (by removing yet another property from what would have been available the younger generation of FTBs )
while the majority of our generation had the choice you mention , (cars clothing etc) OR purchase a large house , that choice is impossible for the majority of this present generation

The reality of this though is if lenders actually allow first time buyers in. All the rules against buy to lets with a purpose of allowing ftb's onto the market has not so far worked

Weststander · Mar 9, 2018

LlcoolJ said:
Still plenty of options in the "not ridiculously priced" property market up North. Also not difficult for first time buyers to get on the ladder. Nice houses in nice areas too. The south east is a different country completely property wise.

I agree that the idea of jumping on the BTL bandwagon is akin to scrabbling for a lifeboat on the Titanic though. For most.

When’s the southern England property crash coming? BTL owners are in it for the long term, so should generally gain well on their investment.

LlcoolJ · Mar 10, 2018

Weststander said:
When’s the southern England property crash coming? BTL owners are in it for the long term, so should generally gain well on their investment.

I'm not saying it's going to crash. I was just pointing out a couple of facts. With the draconic measures that the government have started and that they're clearly committed to continue with, the BTL market for really expensive properties (i.e. anything in the South East of England) is altered.

Ironically, it won't change a thing for the property market or for people trying to get on the ladder. Particularly for those who are renting.

The tax measures only screw the middle income, second house to rent out type landlord. The big boys are already incorporated. So more properties will end up in the hands of larger companies rather than individuals, with more money behind them, more sway, more power to increase rents etc.

It's a typical Tory tax policy which actually shafts the type of people who vote for them. The 1% laugh and take the cash/property. Saying that they're attempting to help the housing market become more fair by actually making it less so. Subterfuge.

It's brilliant if you think about it. But also horrible.

DJ NOBO · Mar 10, 2018

Triggaaar said:
Viable? Rents have increased since then, property prices have doubled, how is it not viable? I bought a btl in 2006, and the rent could be 3 times the current mortgage.

if you have a mortgage on a btl you will make less money becuse of the tax changes. Losing th3 wear and tear allowance is bad news too.
I could see my return getting smaller and smaller which is the main driver to me selling up.
This is not a boo hoo me post, I’m just stating a financial fact.

the rent Ive got over the years has varied . In November , my tenant handed in his notice , leaving early December. This meant I had to slash the rent for six months to avoid a void over Christmas and into new year.

As a small scale btletter, what I’ve found is , it’s bloody great on the months when the money rolls in. But at other times letting can be a pain in the arse, and an expensive one. I have a management company but I’ve found they only offer limited help when things go wrong. Happy to take their 10% though.

Not that I’m complaining, as I’m making a few bob on the sale and made a bit of money year to year (eventually ). Probably the same for you trigaaar, but would you fancy buying now for btl? That’s what the op is thinking of doing. It’s worth him doing his homework before jumping in.
Oh, interest rates will probably go up too.

Blimey , this is a long way from should James Tilley get a new deal

mikeyjh · Mar 10, 2018

Dale Jasper said:
if you have a mortgage on a btl you will make less money becuse of the tax changes.
That is why they were introduced - to squeeze out buy to letters.
I could see my return getting smaller and smaller which is the main driver to me selling up.
This is not a boo hoo me post, I’m just stating a financial fact.

the rent Ive got over the years has varied . Last October, my tenant handed in his notice , leaving early December. This meant I had to slash the rent for six months to avoid a void over Christmas and into new year.

As a small scale btletter, what I’ve found is , it’s bloody great on the months when the money rolls in. But at other times letting a second property can be a pain in the arse, and an expensive one at that. Probably hasn’t helped that I moved away from Brighton so harder to manage. I have a management company but I’ve found they only offer limited help when things go wrong.

Not that I’m complaining, as I’m making a few bob on the sale and made a bit of money year to year . Probably the same for you trigaaar, but would you fancy buying now for btl? That’s what the op is thinking of doing, .

Blimey , this is a long way from should James Tilley get a new deal

A sensible, and honest post - I think some people get in to BTL as a way to have, effectively, someone else pay for an asset for them and expect the money just to roll in every month. Being mortgaged up to the eyeballs and expecting the rent to cover all you costs, all the time is a risky business as there WILL be times where the boiler has gone, the roof needs repairing, the house needs a refurb, oh and when the rent doesn't get paid. I've got a place where, in 2016, the rent wasn't paid for 6 months so with legal fees and repairs etc, it probably cost £10k, such is life as a landlord, these things can and do happen.

My advice would be to focus less on how you're going to finance this, more on how you're going to afford it - I think you have an obligation to provide a decent place to live and to attend to issues on a timely basis. Maintain the place as you would if you have to live in it yourself.

DJ NOBO · Mar 10, 2018

Triggaaar said:
I don't disbelieve you - have stats been released showing they're getting out, or is that just what's stated in the media or what?

I’ve read a lot of media chat, but there are stats too. It would make sense - for small scale landlords (who don’t tax dodge) btl just got sh*tter.
the mass btletters will be fine as they are mostly in companies with diffferent tax rules, and don’t rely on mortgage tax relief as their properties are paid off.
Almost as if the Tories are saying they want to do the right thing by poor people but actually protecting the super rich, while shafting the middle classes. Who’d have thought it.

DJ NOBO · Mar 10, 2018

Three biggest misconceptions about btl.

You will make shed loads of money - sorry, if you’re planning on getting into it now, you’re too late. If your intention is that some sap funds your retirement, the government has ensured that won’t happen.

It’s easy money - over the course of time it’s not. Stuff goes wrong, tenants play up. Expect calls at work, bills etc. You’ll make s bit of money but even with a management company, it’s not hand off.

All btl landlords are all money grabbing and evil - this is media-driven bullsh*t. Many are normal people who didn’t fancy selling during the recession and have ended up having an extra property.

Final top tip - let out a property you’ve already lived in. Unless you want to pay 28% capital gains tax on most of your profit. Tax relief on properties previously occupied by owners is generous . I wonder if that will be tightened soon though....

Uncle Spielberg · Mar 10, 2018

Dale Jasper said:
Three biggest misconceptions about btl.

You will make shed loads of money - sorry, if you’re planning on getting into it now, you’re too late. If your intention is that some sap funds your retirement, the government has ensured that won’t happen.

It’s easy money - over the course of time it’s not. Stuff goes wrong, tenants play up. Expect calls at work, bills etc. You’ll make s bit of money but even with a management company, it’s not hand off.

All btl landlords are all money grabbing and evil - this is media-driven bullsh*t. Many are normal people who didn’t fancy selling during the recession and have ended up having an extra property.

Final top tip - let out a property you’ve already lived in. Unless you want to pay 28% capital gains tax on most of your profit. Tax relief on properties previously occupied by owners is generous . I wonder if that will be tightened soon though....

Accidental landlords, there are many

Triggaaar · Mar 10, 2018

Uncle C said:
Sadly we are not talking about people who bought quite a few years ago

He was.

but deluded idiots today who still think its viable.

That's what you said when people were thinking about it quite a few years ago.

Triggaaar · Mar 10, 2018

Dale Jasper said:
if you have a mortgage on a btl you will make less money becuse of the tax changes. Losing th3 wear and tear allowance is bad news too.

Oh I see, I misunderstood what you meant.

Probably the same for you trigaaar, but would you fancy buying now for btl?

I don't have a btl any more, so I'm not fully on the ball with the rules. I'm not in a position to buy either, so I don't know how I'd go about it if I was.

Weststander · Mar 10, 2018

Dale Jasper said:
Three biggest misconceptions about btl.

You will make shed loads of money - sorry, if you’re planning on getting into it now, you’re too late. If your intention is that some sap funds your retirement, the government has ensured that won’t happen.

It’s easy money - over the course of time it’s not. Stuff goes wrong, tenants play up. Expect calls at work, bills etc. You’ll make s bit of money but even with a management company, it’s not hand off.

All btl landlords are all money grabbing and evil - this is media-driven bullsh*t. Many are normal people who didn’t fancy selling during the recession and have ended up having an extra property.

Final top tip - let out a property you’ve already lived in. Unless you want to pay 28% capital gains tax on most of your profit. Tax relief on properties previously occupied by owners is generous . I wonder if that will be tightened soon though....

A selling landlord gets to keep 72% or more of the capital gain, that’s fantastic.

The other 28% or less goes in tax to help the public purse.

That all sounds reasonable.

DJ NOBO · Mar 10, 2018

Weststander said:
A selling landlord gets to keep 72% or more of the capital gain, that’s fantastic.

The other 28% or less goes in tax to help the public purse.

That all sounds reasonable.

It’s totally unreasonable .
Btl landlords have earned that profit the hard way and should get to keep it all

Uncle C · Mar 10, 2018

LlcoolJ said:
Still plenty of options in the "not ridiculously priced" property market up North.

They are only "not ridiculously priced" if you are a Southerner.

LlcoolJ · Mar 10, 2018

Uncle C said:
They are only "not ridiculously priced" if you are a Southerner.

They're really not. I know plenty of young couples who have had no problem buying a decent first property up here in a nice area. It's a different world.

dazzer6666 · Mar 10, 2018

LlcoolJ said:
They're really not. I know plenty of young couples who have had no problem buying a decent first property up here in a nice area. It's a different world.

Had a scout around when my eldest moved to Galashiels to start work. Decided not to buy yet as she’s not sure she’s going to stay there, but perfectly nice one bedroom flats available for less than £50k, with a good range of 2 bed places in the £60-75k range. She’s currently renting a nice 1 bed flat in a decent area with a garden for about £300/mth. She’s not keen on moving back to the South East....her salary would be just about the same.

Weststander · Mar 10, 2018

Dale Jasper said:
It’s totally unreasonable .
Btl landlords have earned that profit the hard way and should get to keep it all

The gains stem ultimately largely from increases in land values, so aren't earned.

DJ NOBO · Mar 10, 2018

Weststander said:
The gains stem ultimately largely from increases in land values, so aren't earned.

Ha ha. Was Only kidding . Any money earned from property is down to luck . There is little or no hard work involved .

Weststander · Mar 10, 2018

Dale Jasper said:
Ha ha. Was Only kidding . Any money earned from property is down to luck . There is little or no hard work involved .

Luck and risk taking. I know a group of Sussex businessmen who sold out for £1m plus each. Risk & hassle averse, most put their funds into building society accounts. But a couple of them bought BTL's and a few short years later these have risen in value by 2 or 3 times, as well as giving a decent net rental income post-tax year after year. They're now sitting on BTL flats and houses worth £m's.

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[Finance] Buy to Let Mortgages

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