Buy to let stamp duty surcharge and other related news

[d000hg]

BTL isn't dead for newbies. 3% as a one off payment doesn't mean you can't still make a profit. For instance, you might simply write off any profits in year one.

Or, rental prices might just go up a bit as a function of overall house price.

[ChimpMaster]

BTL isn't dead for newbies. 3% as a one off payment doesn't mean you can't still make a profit. For instance, you might simply write off any profits in year one.

Or, rental prices might just go up a bit as a function of overall house price.

Exactly, BTL will become what it used to be and should have always been - an investment rather than a business. An investment that one can grow over time to generate enough residual income to replace a salary or pension.

Prices will taper off and hopefully come down a little, back into good yield territory - perhaps a 3% SDLT surcharge will give back to real investors in terms of a nice 10% fall in prices

[BrilloPad]

Exactly, BTL will become what it used to be and should have always been - an investment rather than a business. An investment that one can grow over time to generate enough residual income to replace a salary or pension.

Prices will taper off and hopefully come down a little, back into good yield territory - perhaps a 3% SDLT surcharge will give back to real investors in terms of a nice 10% fall in prices

That is great until young people are priced out of the market. And its not an investment - its a Ponzi scheme.

[ChimpMaster]

That is great until young people are priced out of the market. And its not an investment - its a Ponzi scheme.

They are priced out if they want to buy a £500,000 flat in London while driving around in new cars and spending most of their earnings on socializing in trendy places, with no regard to the sacrifices one has to make to buy a place.

My first place was a 2 bed flat at £165k over a decade ago. I lived on sandwiches for 6 months and worked every single day for a year during that time, yes . In that area (S.E. UK) you can still get a 2 bed flat for £200k, or a 1 bed for £160k. Doesn't seem out of reach if you're a young couple each earning the average £25k.

I think you're having difficulty separating a Ponzi scheme from real investments. According to your logic every 'investment' is a Ponzi scheme - the stock market too perhaps. If you understand what I've been saying, I think it's good that the get-rich-scheme followers will be removed from the property market, because they don't 'invest'.

[DimPrawn]

I'd like to see CGT tapered for BTL.

So, for BTL properties, CGT starts at like 80%, and reduces to near zero on 20 or 30 year timescales.

BTL landlords that are in it for the long term, get the benefit, those that are get rich quick merchants get slaughtered.

[d000hg]

They are priced out if they want to buy a £500,000 flat in London while driving around in new cars and spending most of their earnings on socializing in trendy places, with no regard to the sacrifices one has to make to buy a place.

They're pretty much priced out if they want to buy a flat in London, period. The couple I know in their twenties moved to London and only managed to buy a small flat, on the outskirts somewhere, for £300k a year or two back, because they had some inheritance. Both were doing decent professional jobs and they don't own a car or indulge in profligate lifestyles.
If they hadn't had the inheritance I've no idea how long it would take to save up, with such a high monthly spend on rent.

Of course you don't have to go to London... maybe it should be reserved for the rich. Like in Hunger Games.

[ChimpMaster]

They're pretty much priced out if they want to buy a flat in London, period. The couple I know in their twenties moved to London and only managed to buy a small flat, on the outskirts somewhere, for £300k a year or two back, because they had some inheritance. Both were doing decent professional jobs and they don't own a car or indulge in profligate lifestyles.
If they hadn't had the inheritance I've no idea how long it would take to save up, with such a high monthly spend on rent.

Of course you don't have to go to London... maybe it should be reserved for the rich. Like in Hunger Games.

I'd love to live in London, or Manhattan, or [insert any major cosmopolitan city name], but sadly I too can't afford it. I worked in London for 7 years and commuted a 3 hour round trip every day - I chose to do that because I could afford a reasonable house outside of the City, even though the wife and I always wanted to live in the hustle and bustle of London - but we couldn't justify the expense.

[d000hg]

I think even living in London, their commute is probably 2 hours a day. Everywhere is 45min+ away in London. And "in London" hardly means Zone 1!

How long ago did you do this... things have rocketed?

I don't know why they wanted to do it... £300k for a tiny flat.

[ChimpMaster]

I think even living in London, their commute is probably 2 hours a day. Everywhere is 45min+ away in London. And "in London" hardly means Zone 1!

How long ago did you do this... things have rocketed?

I don't know why they wanted to do it... £300k for a tiny flat.

Started in City in 2005 I think and could have bought a flat in the Wharf at sub £300k at that time, or in Moorgate for £250k!! But alas, it wasn't meant to be.

£300k around my area would buy a reasonably nice 3 bed house. Commute into London is around an hour to 90 minutes, depending on exact location.

£300k in Slough would also buy a house and with the new Crossrail will get you bang into the City within 25 minutes.

[d000hg]

Are your travel costs reasonable? Or do they mean you need a high-paying job to make it worth bothering?

I do wonder how teachers et al manage - professionals on a non-trivial salary but hardly in the big bucks and without massive prospects of promotion unless you have management aspirations.