Buy to let stamp duty surcharge and other related news

[SueEllen]

Yes, really.

It's quite common for an otherwise fast moving market to have pockets of properties of a certain type that don't sell, particularly when the market is saturated. That certainly applies to a large fraction of these "luxury" developments, because they are being sold as appreciating assets, rather than places to live. Flats, in general, only appeal to a particular segment of the local market, and these flats, in particular. Young families typically don't want to live in flats and they certainly don't want to pay the sky-high annual service charges.

Agreed.

There were stories in cities outside London, that developers couldn't get rid of their "luxury apartments" after the 2007 crash as even housing associations wouldn't buy them. The flats were completely unsuitable for the type of tenants/shared owners the housing associations target.

I've actually lodged in new build flats and new housing association flats. The main differences are that housing association flats actually have some storage for things like vacuum cleaners, one of the bathrooms has a bath and kitchens are big enough to cook a proper meal in. There as while new build flats have a better spec to items like tiles, kitchen appliances and other fittings they are simply not aimed at people living in them long term.

[DimPrawn]

There as while new build flats have a better spec to items like tiles, kitchen appliances and other fittings they are simply not aimed at people living in them long term.

Put some immigrants in them, four to a bedroom. Problem solved.

[Martin@AS Financial]

Landlords secure £50k for legal challenge over B2L tax changes:

Full Story here:

Landlords secure £50k for legal challenge over B2L tax changes | Mortgage Strategy

[ChimpMaster]

Landlords secure £50k for legal challenge over B2L tax changes:

Full Story here:

Landlords secure £50k for legal challenge over B2L tax changes | Mortgage Strategy

Good to see a challenge to Clause 24, which has to be one of the most unreasonable and ill thought out government policies in recent years.

I guess I shouldn't be surprised that Osborne took advice from a 22 year old graduate's report rather than look to history to see exactly what will happen with this tax-grab - a similar policy in Northern Ireland in 1998 resulted in a 50% rent increase over 3 years.

From :
UK rents set to sky-rocket because of Osborne’s tax grab | Property118.com
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It is clear that the Chancellor did not base the idea on the lessons of history, specifically the recent history of Ireland where, in the 1990s, as in the UK now, there was a perception that prospective landlords were crowding out first-time-buyers and driving up property prices. As a result in 1998 the Irish Government sought to discourage new investment in private rented accommodation and did this by removing the deductibility of mortgage interest for tax purposes.

Following the measure, rents rose by at least 24% in 1998. This represented the biggest annual increase in rents ever experienced in Ireland. The Housing Policy Review 1990-2002 reported that 1999/2000 and 2000/2001 saw particularly high growth in private residential sector rents, which increased by 10.5 per cent and 14.6 per cent respectively during these years.

The Ronan Lyons report showed that the average monthly rent in Ireland in the third quarter of 1998 was 600 euros. The average had been climbing at a steady rate for 20 years, but it then accelerated, twice. It reached almost 900 euros in the third quarter of 2001, just before the deductibility of interest was restored, effective from January 2002; there had been an increase of almost 50% in three years.

What is more, these higher rents meant that many who were renting while waiting to buy their first homes could no longer afford to save deposits, leading to the conclusion that Government intervention designed to ease the pressure on first-time buyers quite ironically ‘made it more, rather than less, difficult, for the first-time buyers it wanted to help.

It was stated in the same report: ‘Too much emphasis was placed on alleviating the plight of the first-time buyer, yet to do so at the expense of the private rented sector on which the basis of sustaining economic development is built, is at best negligent, at worst almost criminal. Even then, measures aimed at ameliorating the problem for first-time buyers have proven to be inflationary, which in fact quite ironically worsened their plight.’

As a consequence, the deductibility of interest was quickly restored from 1st of January 2002, but not before the damage was done. In addition to tenants and private landlords suffering, the policy also had an extremely negative effect on construction levels, which fell drastically over the same period.

So when George Osborne announced this astonishing attack on landlords in July, we can only assume that neither he nor his advisers were aware that this same economic experiment had failed abysmally just across the water only a few years earlier.

A question remaining unanswered is therefore whether Clause 24 was a planned policy which the Conservatives kept secret from the electorate in order to trick landlords into voting for them OR was it dreamt up in a matter of weeks directly after the election.

George Osborne was either deceitful or capricious. What is very clear, however, is that it is extremely ill-thought-out, or as the Director of the Institute of Fiscal Studies, Paul Johnson, said: ‘plain wrong.’
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[jamesbrown]

Market glut as buy-to-let landlords quit | The Times

[DimPrawn]

If Osborne (spit) really cared about anyone other than bankers, wealthy land owners and house builders, they would reform the tenancy agreements so that tenants rights are first, and greedy, make a quick buck leveraged property speculators have none.

First change would be all tenancy agreements are for as long as the tenant wishes (as long as they pay the rent), rents cannot rise above inflation, landlords cannot sell properties with sitting tenants, and tenants have the right to decorate and change the property as they see fit.

And landlords who fail to pay any mortgage are committing fraud and go to jail.

[AtW]

If Osborne (spit) really cared about anyone other than bankers, wealthy land owners and house builders

He does not care about either - bankers pretty fooked off with his balance sheet charges that were going up and up, and now he will help finally crash house market with BTL changes - that won't go down well with house builders AND land owners.

[AtW]

Landlords secure £50k for legal challenge over B2L tax changes: Full Story here: Landlords secure £50k for legal challenge over B2L tax changes | Mortgage Strategy

£50k will be enough for a few weeks of QC work...

[DimPrawn]

£50k will be enough for a few weeks of QC work...

For Mrs Bliar, a few days.

[AtW]

On what grounds they want to sue the Govt anyway?

They got zero chance of policy reversal, especially now that Osborne had to reverse his tax credits policy - he needs even more money now, not less.