(e.g. Previously, a flat generates £20,000 a year. The maintenance cost & management might be £5,000 and the debt £12,000.00 leaving £3,000. The £3,000 taxed at say 40% leaving the investor £1,800 per year. (Not an amazing investment but decent if you have more than one property and expect the sales market to rise over time).
Now, a flat generates £20,000 a year. The maintenance cost & management might be £5,000 leaving £15,000 a year. Taxed at 40% giving HMRC £6,000 and leaving the investor £9,000 and debt of £12,000. Ultimately, leaving the investor with -£3,000.00).
Thought the Government gained in the short term, faced with no real option Buy to let Investors have been selling their properties thus reducing the rental stock.
A reduced rental stock means less properties available and ever increasing demand. More demand for fewer things drives the price up in any market. Cause and effect.
Then the Government comes along, much like Dori from Finding Nemo and see that the market is sky high for rental properties. “How strange” they say, “What can we do about this?” they say. “I know”, says Dori “lets protect tenants from eviction. That way, we can slow price rises down and be popular with all the renters”.
So the Buy to Let investor, licking his wounds and putting £3000 of his own salary into the property to avoid foreclosure can’t remarket his property and shift his old tenant, who won’t pay more rent, as the Government further gums up the sector and blames that greedy landlord.
Don’t get me wrong, I’ve been on both ends of that equation. (Kicked out of a property because the owner felt that he might be able to get more rent than I was willing to pay). But surely the solution is to loosen planning laws, make the sector a desirable place to invest, reduce the bureaucracy and the barriers to entry and grow the sector. One might even say along traditional Conservative values rather than tax hikes and increasingly punitive legislation. Cause and effect, isn’t rocket science!
https://www.ellisandco.co.uk/news/londons-rental-stock-down-44-since-2021
https://www.bbc.co.uk/news/uk-politics-65612842
https://www.gov.uk/guidance/income-tax-when-you-rent-out-a-property-working-out-your-rental-income
]]>This is what I wrote:
Dear Sir/Madam,
I would like to lodge a formal objection to your plans to build a third runway at Heathrow.
I live in Chiswick and the noise levels with aircraft at or below 2000 agl will be far in excess of the 55 dB threshold. Why would you want to deafen millions of people and blight a large part of one of the worlds greatest cities?
In addition the pollution levels will be significantly increased exposing millions of people to a surge in cardio respiratory diseases. In response to this, the NPS have claimed that there will be ‘mitigating measures’ but they’ve been woefully vague and general in nature. Obviously, they’ve opted for marketing and presentation because you can’t mitigate for carbon particles falling from the sky. Increasing the burden on the NHS and reducing quality of life.
Locally, we’ve had a plethora of new blocks and developments in the area increasing the traffic to breaking point. Adding further Heathrow traffic will both increase pollution and decrease quality of life even further.
With the economic argument The Davies Commission report predicts the economic benefits of a third runway at Heathrow to be around £130bn, with costs of £17.6bn. However deducting the additional £20bn of possible surface access costs (per TfL estimates)reduces the net benefit to some £92.4bn, compared with a net £80bn benefit for expanding Gatwick. The difference between the two options of £12.4bn is much smaller than the difference of £32.0bn predicted by the Davies Commission, thus considerably reducing the validity of the economic case for a third runway at Heathrow.
Both the Davies Commission and the Government assume that the airport (ie the private sector) would pay for both the costs of building the new runway and the extra costs of surface access directly attributable to having a third runway. The latter, according to TfL could amount to up to£18bn compared with a Heathrow estimate of £5bn, of which Heathrow says it will contribute only £1.1bn. I question whether adequate surface access will be built, and am concerned about the possible effect on public transport and traffic congestion in west London.
Lastly, the government pledged that this would never happen. Which makes them dishonest and dishonourable.
]]>I’ve never understood the rationale for making students take out loans to study. We live in a service orientated country where manufacturing and agriculture has been in decline for many years (we haven’t fed ourselves for decades). As a mature, developed economy we’ve moved brilliantly towards providing services to the world (Financial & Creative), but student loans are a barrier to developing the expertise required to carry on doing so. Taking on a debt of £50,000 to get a degree is going to make many think twice about going for further education. And that’s happening!
A “service” country by definition requires an educated population to maintain a comparative advantage over anybody else. If we’re dumber – we’re not going to get the business. SO WHY MAKE THE NEXT GENERATION DUMBER???
The Government(s) seem to want to reduce their outgoings across the board, but a generation that will statistically make less money (and therefor pay less tax) is mind-numbingly short-sighted.
You’d imagine that it would be the Conservatives that would do away with free Universities but it was actually Tony Blair and Labour. (Who went to Oxford for free). And the charges have incrementally become increasingly punitive.
Now that the student debt is a fair chunk (£12 Billion), it’s the Conservatives who have sold that debt off to the bankers whilst patting themselves on the back for a stitch up well done.
These Bankers are the loan/debt Bankers that almost ruined this country in 2008 and their only mission (whatever the Government says) is to extract maximum returns from the students. It’s the thin end of the wedge, slight of hand politics, that is mildly revolting, and that leaves our poor students holding the bag!
Economics Manufacturing
Econowatch – UK can’t feed itself
Which Student Debt
UCAS Applications Down
Telegraph – Selling Student Debt
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Oh, and if we pat ourselves on the back one more time, I’m going to vomit!
]]>When they leave, they will defacto sell their UK property holdings and presumably some of their investments. When they do that, it will have a knock on effect on prices in the South East, making property somewhat more affordable. That would be great for Londoners who can’t afford to get on the property ladder but not so good for those who remember foreclosures through “negative equity!”.
In addition to that though, it will also mean that they no longer employ the help, buy the cars, the clothes, the houses, the furnishings or live the A lister lives or indeed pay tax at all. (I wonder what will happen to Chelsea FC?).
Just now we can’t even guarantee that our run of mill foreigners will stay.
London’s income’s not going to soar – how can it?
I wonder if HMRC will be better or worse off? And if it’s worse off (which is highly likely) – won’t that mean more taxes for us?
Source:
CITYAM
FT
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Source:
FT
The Guardian