An end to property?

[fpinela]

You can't do it easily - bank would have to agree, and in any case interest rate will be much higher, plus stamp duty to pay, inheritance tax implications, capital gains etc - after that selling house will be even harder because it would be Ltd that owns it, plus don't be surprised if Ltd that own housing stock will face higher corp tax in the future... to build new affordable housing

It is indeed expensive, but I can't see many options for those landlords who have high ltv's. If the new rule goes ahead, someone with a 75% ltv will start losing money in a property (in general, it is obvious case to case). And as far as I can understand, it is very common to be stretched to these levels of debt with lenders.

As I said, it can be an interesting time to become a buyer.

[AtW]

It is indeed expensive

It's not just expensive - even at current low rates the yields from rent won't cover those extra costs, and interest rates WILL go up.

[fpinela]

It's not just expensive - even at current low rates the yields from rent won't cover those extra costs, and interest rates WILL go up.

Nowadays, BTL mortgage is probably around 3-3.5% interest rate. Through a limited co lenders are selling money at 4-5%.

And these products will adjust to the market. If landlords will go through this route, the lenders will have to create products to satisfy the market.

[AtW]

Nowadays, BTL mortgage is probably around 3-3.5% interest rate. Through a limited co lenders are selling money at 4-5%.

And what will those rates be when BoE rate is 3%?

BTL is Buy To Let, not Borrow To Let. It only worked in the latter case whilst the money were basically free.

[fpinela]

Agree. And that's why landlords with high leverage, getting properties and mortgages valued based on the profit made renting to tenants will struggle. And to be honest, I don't think that it is particularly unfair.

However, if the BoE rises the tax, and that will obviously happen its just a question of time, it also means that it becomes more difficult for the common house buyer to get a residential mortgage and more people renting. Anyway, I don't think that BoE will ever rise taxes to 2008-2009 levels again.

[PurpleGorilla]

An end to property?

Agree. And that's why landlords with high leverage, getting properties and mortgages valued based on the profit made renting to tenants will struggle. And to be honest, I don't think that it is particularly unfair.

However, if the BoE rises the tax, and that will obviously happen its just a question of time, it also means that it becomes more difficult for the common house buyer to get a residential mortgage and more people renting. Anyway, I don't think that BoE will ever rise taxes to 2008-2009 levels again.

BoE can't raise rates because we are in a deflationary spiral. Rock and hard places.

low interest rates and loose lending caused the housing bubble.

[BrilloPad]

It's not just expensive - even at current low rates the yields from rent won't cover those extra costs, and interest rates WILL go up.

Of course they will go up! I note that you don't put a limit on when though.

I reckon it will be 5 years plus...

[PurpleGorilla]

An end to property?

Of course they will go up! I note that you don't put a limit on when though.

I reckon it will be 5 years plus...

The bubble can pop without an interest rate rise folks ;-)

[BrilloPad]

The bubble can pop without an interest rate rise folks ;-)

Absolutely! But without property rises and immigrated the illusion of prosperity in this country will be shown. Like the emporers new clothes. The bubble cannot be allowed to end....

[PurpleGorilla]

Absolutely! But without property rises and immigrated the illusion of prosperity in this country will be shown. Like the emporers new clothes. The bubble cannot be allowed to end....

Viva la revolution!