Good article.

http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/11310826/Rent-controls-would-spell-disaster-for-thousands-of-buy-to-let-investors.html

I don’t understand how people come to the conclusion that Buy-to-let investors prevent first time buyers from purchasing property. Someone on a LinkedIn forum made this statement last week as well, so I had to politely correct them.

Buy to let investors do not look to buy 1 bed flats or small houses. They tend to look for Houses where they can rent to several people, esp Houses of Multiple Occupation (HMO).

In addition, for an investor, as the saying goes “you make your money when you buy”. In other words investors are looking for bargains by buying below the normal market value (“BMV”). If a first time buyer wants to buy a property all they have to do is outbid an investor. This isnt difficult – they just need to offer the normal market value.

As for the comments being made by, mainly socialist, politicians & people / agencies with an agenda about rent controls, this is utter nonsense. They do not understand supply & demand. There is a demand for private rental property, so investors supply it. If you cap their rent then when market forces change ie interest rates go up, then many investors will be LOSING money. What happens then? They sell. Who then provides the accommodation? Not the Government. They are broke.

Unfortunately, it is not understood even by many new landlords how little profit there is in Buy-to-Let property after tax, void periods, repairs & the cost of finding tenants. This is when interest repayments are at their lowest, so what will happen when interest rates rise, as they will do, will result in a MASSIVE sale of rented properties by Landlords who can no longer afford to pay their mortgages.

How does this help the Private Rented Sector? It is electioneering and greed. The (mistaken) politics of envy.

http://www.standard.co.uk/news/mayor/mayoral-hopeful-abbott-proposes-50-levy-on-rents-above-local-caps-9912718.html

Further evidence, although it’s not needed, of how little politicians understand about supply & demand and how markets work. Their ignorance is depressing.
Why do politicians listen to the idiots at Generation Rent? Landlords will go out of business. Landlords are taking big risks in buying property anyway, and their net profits are frequently NEGATIVE as esp in London they are relying on capital growth. So what will happen to the housing stock when landlords sell? Who will buy it? Who will provide housing for those who cannot afford it? If its not the Private Rented Sector then how do these idiots propose that housing is made available? Do they think that a bankrupt Governmment can magic them? Do they believe that they can steal enough properties?

Alternatively, Landlords put up rent to compensate for the additional tax. Who does that benefit? Not the voters that they are appealing to. When will socialists learn that interfering in markets distorts them, and that businesses need to make a profit to stay in business?

Most landlords only have 1 property. These are not rich people, just ordinary folk. Gordon (“the moron”) Brown destroyed the pensions industry. Nobody trusts banks. Interest rates give no return, and the stock market is very risky. Where do people invest their savings to get a return? They are gambling on property values increasing! Now as a result of this Gvmt incompetence, they are proposing to compound their mistakes by taxing people more.

This will end VERY badly.

This is great news! Not before time. Previously is was a bizarre and unfair tax.

At last the unfair block system has been removed and a system akin to income tax rates has been introduced. This means that the higher rate only applies to the price banding rather than the full value of the property.

Residential properties Purchase price of property Rate of SDLT…more http://lnkd.in/daGMf5D

This will free up the distortions in property prices & enable properties to be sold at market value, not a value distorted by avoidance of a major increase in SDLT costs.
A property being sold at £260,000 will now attract SDLT as follows;
The first £125000 = Nil
£125000-£500000 = £2500
£250000-£260000 = £500.
Total £3000.

Previously this would have been £7800

Well done Chancellor. Can’t remember the last time I complimented a Minister.

I still dont understand the London market. It worries me greatly that so many people are desperate to buy, and as it states in the article, viewings are done on a Friday but offers need to be in by Monday lunchtime to stand a chance of buying.

http://moneyweek.com/three-signs-of-a-london-house-price-bubble/

Its a big bubble in the making. The point is that when the bubble bursts, prices will fall, but will they fall much further than the prices of a couple of years ago?

Well I made the decision to sell a number of properties a couple of years ago. Patently in the short term I am losing out (although none of my properties were within the M25). I continue to believe that prices will fall considerably at some stage in the future as a result of economic mismanagement (QE) and interest rates rising to long-term averages ie approx 7-8%, and this will result in thousands of people who are over-leveraged (mainly “investors” and those desperate to “get on the housing ladder”) having to quickly sell. This allied to the yet to be resolved European political gamble (Euro) that will result in serious economic problems, then I am genuinely fearful that house prices will crash beyond next year.

In the meantime, my own strategy continues to be to buy properties with potential, refurbish them, and sell quickly. (Buy To Sell – BTS)

Article by the great Bill Bonner. Every economist needs to understand this, and because they don’t understand it, we shouldn’t believe what they recommend!

http://moneyweek.com/bill-bonner-crushed-economists-dreams/

Ignore economists!

This article is worth reading. The media are quoting figures about property values that are provided by Rightmove. They are using asking prices – they are irrelevant. Its selling prices that count.

Don’t journalists question statistics or do they just like sensationalising?

http://www.estateagenttoday.co.uk/news_features/Agents-war-of-words-over-Rightmoves-house-price-survey#!

Spot on Ms Beeny.

The scheme is irresponsible and economic lunacy.

We need more high profile people getting the message out so that buyers are more cautious.

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/10377012/Sarah-Beeny-Help-to-Buy-makes-taxpayers-act-like-parents.html

Its good to hear today that Moneysavingexpert Martin Lewis has been interviewed and quoted on the news as he is warning people about this scheme.

This should help get the message across to the public that interest rates WILL rise, and they need to ensure that they can pay their mortgage when that happens.

I am fearful that many naive buyers and new investors will not be able to afford the repayment. Frankly the scheme is designed to win votes and to bail out the banks by inflating house prices so the banks dont lose money on their property bad debts.

Home ownership isn’t a right and it isn’t essential. It comes with large financial risks & its irresponsible of the Gvmt to encourage people to buy properties.

Did the Gvmt learn NOTHING about the crash that was ultimately caused by debt? Patently not. They are still over-borrowing and encouraging people to take on more debt even though we are already the most indebted nation on earth per capita. It cannot end well.

If you are thinking of buying, by all means use the scheme, but be very careful of what you are buying and how you will pay back your mortgage. A 10 year fixed rate based on today’s rates looks like a good place to start to me for anyone who wants to own a property long-term.

More pressure on landlords and letting agents.

How realistic is this? How much history should an agent know about a property & who has lived or died there?

More evidence that “caveat emptor” is becoming irrelevant in our no-risks accepted, nanny-state.

http://www.lettingagenttoday.co.uk/news_features/Letting-agents-warned-to-take-disclosure-duties-seriously-or-risk-jail

More ill-thought out ideas from Gvmt.

Most mortgage lenders terms only accept tenants for 12 months. This is because it is very difficult to remove non-paying tenants and rogues. Long tenancy agreements can mean Landlords are faced with serious financial problems. Unsurprisingly lenders don’t want this risk.

There are seemingly no proposals to help Landlords speed up the current legal process so that for instance if a tenant were 2 months in arrears then they could evict a tenant.

The idea of long tenancies is a decent one, but Gvmt again is proving how little it understands about the Private Rented Sector.

If you were cynical you might think that the announcement was made because there are few votes from supporting landlords, but how many could be garnered from Labour’s heartlands ie lifelong tenants? Plus agencies like Shelter are far more effective at lobbying than the National Landlords Association.

Mr Pickles you need to understand more about the marketplace if you want to do what is RIGHT rather than what is politically expedient.

http://www.landlordtoday.co.uk/news_features/Landlords-in-a-pickle-as-tenants%E2%80%99-charter-breaches-mortgage-terms