Reply to: 100% BTL Mortgage

[ChimpMaster]

Any evidence (i.e. a link) to the statement above? Everything I've seen (and I've seen a lot of reports regarding Ireland and their S24 equivalent) shows that it was not the case..

There are plenty of reports out there for which empirical research has been carried out, for example: Ireland's scrapping of buy-to-let tax is 'warning to Britain' and of course the dozens of other reports.

But you have a remarkable amount of time to troll posts so perhaps you can spend some time to provide links to show "that it was not the case".

[eek]

Because all of them are Tories.

During 1998-2001 Ireland implemented its own version of Section 24 - though a less severe version that did not hit existing mortgages, only new ones, so the change was not retrospective in nature. And still, the outcome was that rents across Ireland rose by ~50% in just three years - the scheme then had to be scrapped.

And not that I'm one to quote the Daily Wail often but there are rumblings of the Tories looking to incentivise longer term tenancies: Will the Budget repeal landlords tax on longer tenancies? | Daily Mail Online

Any evidence (i.e. a link) to the statement above? Everything I've seen (and I've seen a lot of reports regarding Ireland and their S24 equivalent) shows that it was not the case..

[eek]

Surely rents would go up? The only landlords would be the mega-rich, there would be a lower supply not matching demand. I doubt they'd have any desire to reduce the rents they charge. They'd probably put them up.

Many businesses borrow money to buy assets (stock, machinery, buildings) so why should being a landlord be the reserve of the super rich who don't need to borrow?

So houses miraculously burn down when a landlord sells up. The rental market for housing is remarkable consistent when it comes to people buying a house to live. The demand for rental houses decreases by 1, the supply of rental houses may or may not decrease by 1.

Also businesses can no longer automatically deduct all loan interest from their taxable income - it is changing so that only some allowances remain...

[ChimpMaster]

Surely rents would go up? The only landlords would be the mega-rich, there would be a lower supply not matching demand. I doubt they'd have any desire to reduce the rents they charge. They'd probably put them up.

Many businesses borrow money to buy assets (stock, machinery, buildings) so why should being a landlord be the reserve of the super rich who don't need to borrow?

Because all of them are Tories.

During 1998-2001 Ireland implemented its own version of Section 24 - though a less severe version that did not hit existing mortgages, only new ones, so the change was not retrospective in nature. And still, the outcome was that rents across Ireland rose by ~50% in just three years - the scheme then had to be scrapped.

And not that I'm one to quote the Daily Wail often but there are rumblings of the Tories looking to incentivise longer term tenancies: Will the Budget repeal landlords tax on longer tenancies? | Daily Mail Online

[chopper]

Hasn't this boat sailed loonng way back?

Personally I feel BTL mortgages should not exist. On the other hand they do help get rental properties on the market. However, this market is now totally dependent on the monthly mortgage payment owed and hence the rent itself is a distorted amount.

A real clean up is required and rents should come down massively to reasonable levels and not levels determined by how much mortgage leverage the 'landlord' has gotten his nose into.

Surely rents would go up? The only landlords would be the mega-rich, there would be a lower supply not matching demand. I doubt they'd have any desire to reduce the rents they charge. They'd probably put them up.

Many businesses borrow money to buy assets (stock, machinery, buildings) so why should being a landlord be the reserve of the super rich who don't need to borrow?

[fullyautomatix]

Hasn't this boat sailed loonng way back?

Personally I feel BTL mortgages should not exist. On the other hand they do help get rental properties on the market. However, this market is now totally dependent on the monthly mortgage payment owed and hence the rent itself is a distorted amount.

A real clean up is required and rents should come down massively to reasonable levels and not levels determined by how much mortgage leverage the 'landlord' has gotten his nose into.

[eek]

So punitive taxation is OK so long as it doesn't affect you. Or maybe you would be happy paying retrospective tax on all those years that you were a bum-on-seat contractor? After all, the government needs that money more than ever now.

But seriously, the point is that there are positive ways to influence the economy, to promote growth rather than penalize success. It's just that governments choose to slay the goose rather than invest in all and reap the rewards.

Anyway..................I trust that OP's question on mortgages has been answered.

And its possible that tax could be introduced as a positive way to slowly influence what is currently perceived by many to be a bubble in asset pricing..... As with everything personal interests can triumph over other considerations....

[ChimpMaster]

If you are a bum on seat contractor then yes I do believe things should be fair (hint I'm no longer a bum on a seat contractor)... And given the structural deficit Gordon Brown left the economy in you can see why the decision was made to equalise the issue by S24 rather than introducing Miras...

So punitive taxation is OK so long as it doesn't affect you. Or maybe you would be happy paying retrospective tax on all those years that you were a bum-on-seat contractor? After all, the government needs that money more than ever now.

But seriously, the point is that there are positive ways to influence the economy, to promote growth rather than penalize success. It's just that governments choose to slay the goose rather than invest in all and reap the rewards.

Anyway..................I trust that OP's question on mortgages has been answered.

[eek]

And no doubt you agree that all contractors should be forced under PAYE for 100% of their earnings. After all, it's not fair that the market is unfairly biased against employees, right?

That's not the way the world works though is it? You take on risk, so you should reap the reward.

But we digress. My point - abundantly clear in my previous post - was that there are positive ways to influence the market and the economy, but successive UK governments instead choose to influence by legislation that penalizes rather than promotes.

If you are a bum on seat contractor then yes I do believe things should be fair (hint I'm no longer a bum on a seat contractor)... And given the structural deficit Gordon Brown left the economy in you can see why the decision was made to equalise the issue by S24 rather than introducing Miras...

[MarillionFan]

Do they still exist?

Have a property with a mortgage LTV at about 70%, it’s let out at the moment and now things have settled with a new tenant I’d like to remortgage. NatWest who all my other accounts are with are happy to give me a BTL Mortgage up to about 75% no qualms.

However what ideally I’d like to do is take out as near a 100% Mortgage and use the balance to buy another property, the equity in the BTL is about the 10% I’d need as a deposit for the place I want to buy, does anyone out there still do 100% Mortgage for BTL?

Oh FFS. Look, I'll buy the bloody house. They only cost 3k up North anyway.

[ChimpMaster]

So you agree that the market has been unfairly biased against owner occupiers for 20 years but don't accept that things need to change....

Also MIRAS was restricted to the first £30,000 of a loan, was essentially killed off in 1988 (causing the crash in 1989-91) and worked remarkably similarly to the way S24 works...

And no doubt you agree that all contractors should be forced under PAYE for 100% of their earnings. After all, it's not fair that the market is unfairly biased against employees, right?

That's not the way the world works though is it? You take on risk, so you should reap the reward.

But we digress. My point - abundantly clear in my previous post - was that there are positive ways to influence the market and the economy, but successive UK governments instead choose to influence by legislation that penalizes rather than promotes.

[eek]

Tell that to any other business. Let's make it truly 'fair'. You've got to see through the bullsh1t HMRC spout before you really see what's going on.

It was better before Gordon removed MIRAS under a Labour government in 2000. Prior to that, everyone had interest cost relief and so the all homeowners were on a level pegging, and in a better position than today.

But - rather than re-introduce a MIRAS type solution, the Cons decided to tax everyone sh1ltoads more. Giving all homeowners interest relief would have created so much more positive economic output and eventually more taxation revenue.

And instead of a win/win for the people of this country, the government simply thought "how can we extract as much tax revenue from everyone". They're slaying the goose.

And everyone's a loser.

So you agree that the market has been unfairly biased against owner occupiers for 20 years but don't accept that things need to change....

Also MIRAS was restricted to the first £30,000 of a loan, was essentially killed off in 1988 (causing the crash in 1989-91) and worked remarkably similarly to the way S24 works...

[ChimpMaster]

I wouldn't call it punitive taxation - then again I don't believe that interest should be tax deductible at all as it distorts the market....

Tell that to any other business. Let's make it truly 'fair'. You've got to see through the bullsh1t HMRC spout before you really see what's going on.

It was better before Gordon removed MIRAS under a Labour government in 2000. Prior to that, everyone had interest cost relief and so the all homeowners were on a level pegging, and in a better position than today.

But - rather than re-introduce a MIRAS type solution, the Cons decided to tax everyone sh1ltoads more. Giving all homeowners interest relief would have created so much more positive economic output and eventually more taxation revenue.

And instead of a win/win for the people of this country, the government simply thought "how can we extract as much tax revenue from everyone". They're slaying the goose.

And everyone's a loser.

[eek]

As part of the punitive taxation regime of S24, gross rental income is now added to your overall income before loan interest is taken off. This means that you will be taxed on gross profit, less only non-loan costs.

This is the real kicker most people are missing. So many people will be pushed into the higher rate tax bracket due to this - so this is what you need to be aware of.

As a contractor it hits us double because it reduces the amount you can earn from your IT company before suffering higher rate dividend tax.

Going back to your original request, you won't get a 100% loan (unless you get private funding) but you can get up to 85% from specialist lenders like Kent Reliance. As you might imagine, these do come at a cost.

I wouldn't call it punitive taxation - then again I don't believe that interest should be tax deductible at all as it distorts the market....

[ChimpMaster]

Yes, personal not company, I only have one other house and no plans to get more, quick reading up as long as my combined income doesn't hit over £45k per annum I should be ok from any major impact from S24.

As part of the punitive taxation regime of S24, gross rental income is now added to your overall income before loan interest is taken off. This means that you will be taxed on gross profit, less only non-loan costs.

This is the real kicker most people are missing. So many people will be pushed into the higher rate tax bracket due to this - so this is what you need to be aware of.

As a contractor it hits us double because it reduces the amount you can earn from your IT company before suffering higher rate dividend tax.

Going back to your original request, you won't get a 100% loan (unless you get private funding) but you can get up to 85% from specialist lenders like Kent Reliance. As you might imagine, these do come at a cost.