General Discussion: Property thread


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darko
darko avatar

994 posts since 4/10/12

14 Oct 2020 20:09
Razorlight123 wrote: Yeah, also first time buyer.

The place I want is ideal for me, as I've started my PhD and need somewhere close-ish to the university.

I really want to get something sorted before the 5% deposit scheme starts coming in. As it will only introduce more buyers to the market, inevitably increasing house prices.

Good luck, hope your offer gets accepted!

Should be a good few years yet until that 5% scheme gets put into place, probably 2+ from what I’ve read
Razorlight123
Razorlight123 avatar

4673 posts since 13/1/10

posted 15 Oct 2020 09:12, edited 15 Oct 2020 09:12
Hopefully you're able to secure the home you want my man, are you going to put in another offer?
swede
swede avatar

9064 posts since 21/3/09

15 Oct 2020 10:29
Razorlight123 wrote: I really want to get something sorted before the 5% deposit scheme starts coming in. As it will only introduce more buyers to the market, inevitably increasing house prices.

wouldn't worry about that. it is just hot air from boris at the moment, no way it will be implemented soon. if such a thing was introduced it would kill the help to buy equity loan scheme; in turn hurting all the homebuilders he is so chummy with
themistake
themistake avatar

10747 posts since 20/2/06

15 Oct 2020 22:24
swede wrote:
Razorlight123 wrote: I really want to get something sorted before the 5% deposit scheme starts coming in. As it will only introduce more buyers to the market, inevitably increasing house prices.

wouldn't worry about that. it is just hot air from boris at the moment, no way it will be implemented soon. if such a thing was introduced it would kill the help to buy equity loan scheme; in turn hurting all the homebuilders he is so chummy with

All these equity loans mature in the next 2/3 years. Who is gunna buy the flats? The gov are not going to let them all deteriorate in value, so wouldnt surprise me if the 5% scheme is introduced to help the gov get their money back on these equity loans.
Rirawin
Rirawin avatar

9405 posts since 17/7/05

15 Oct 2020 22:26
Rirawin wrote: Anyone own a second property/is a landlord? Aware there are restrictions with Buy to Let mortgages and a regular mortgage for a second home.

How do the mortgage lenders actually know that:

1) You're not letting family staying there rent free
2) You're letting it out as an Airbnb. Do they carry out checks on who pays the council tax or ASTs that have been signed?
3) Is a Holiday Let Mortgage better to consider if it's used 50/50 between family staying there and letting it out as an Airbnb?

Asking for a friend.

Further to the above. Anyone here setup a limited company to reduce income tax on a rental?
swede
swede avatar

9064 posts since 21/3/09

posted 16 Oct 2020 06:58, edited 16 Oct 2020 06:58
themistake wrote:
swede wrote:
Razorlight123 wrote: I really want to get something sorted before the 5% deposit scheme starts coming in. As it will only introduce more buyers to the market, inevitably increasing house prices.

wouldn't worry about that. it is just hot air from boris at the moment, no way it will be implemented soon. if such a thing was introduced it would kill the help to buy equity loan scheme; in turn hurting all the homebuilders he is so chummy with

All these equity loans mature in the next 2/3 years. Who is gunna buy the flats? The gov are not going to let them all deteriorate in value, so wouldnt surprise me if the 5% scheme is introduced to help the gov get their money back on these equity loans.

good point tbf - hadn't thought of that; still… it is won't be happening in the next couple of months. that is for sure
Kadafi39
Kadafi39 avatar

1775 posts since 30/10/09

16 Oct 2020 10:48
Rirawin wrote:
Rirawin wrote: Anyone own a second property/is a landlord? Aware there are restrictions with Buy to Let mortgages and a regular mortgage for a second home.

How do the mortgage lenders actually know that:

1) You're not letting family staying there rent free
2) You're letting it out as an Airbnb. Do they carry out checks on who pays the council tax or ASTs that have been signed?
3) Is a Holiday Let Mortgage better to consider if it's used 50/50 between family staying there and letting it out as an Airbnb?

Asking for a friend.

Further to the above. Anyone here setup a limited company to reduce income tax on a rental?

Yes, just buy the property in the company name and you will pay corporation tax instead, think its currently 19%, so a big saving if you are nearing the 40% bracket for personal tax.
darko
darko avatar

994 posts since 4/10/12

16 Oct 2020 13:53
Razorlight123 wrote: Hopefully you're able to secure the home you want my man, are you going to put in another offer?

thanks but the property has sold now Sad

it was up at a guide of 260, we put in an offer of 250 (htb cap) and said we could stump up a little extra if needed but no dice, back to searching!
ginner
ginner avatar

293 posts since 15/4/14

16 Oct 2020 14:08
Kadafi39 wrote:
Rirawin wrote:
Rirawin wrote: Anyone own a second property/is a landlord? Aware there are restrictions with Buy to Let mortgages and a regular mortgage for a second home.

How do the mortgage lenders actually know that:

1) You're not letting family staying there rent free
2) You're letting it out as an Airbnb. Do they carry out checks on who pays the council tax or ASTs that have been signed?
3) Is a Holiday Let Mortgage better to consider if it's used 50/50 between family staying there and letting it out as an Airbnb?

Asking for a friend.

Further to the above. Anyone here setup a limited company to reduce income tax on a rental?

Yes, just buy the property in the company name and you will pay corporation tax instead, think its currently 19%, so a big saving if you are nearing the 40% bracket for personal tax.

Worth noting that you will have to pay tax on any cash taken out of the company as dividends too, so if you are higher rate payer you will pay 19% corp tax then also pay up to 32.5% tax on your dividend; so you will be taxed higher than if you just took 40%. You can write off mortgage interest in a company structure as a cost (to keep corp tax down) but you can't in a personal capacity to the same extent you used to be able to.

You need to run the numbers as it depends if you want to live off the income the properties generate or just roll it up in company for further purchases. You can also play the numbers if you have a partner or trusted family who you can give the dividends to at lower rates.

Get some tax advice, its cheap in the context of things.
Rirawin
Rirawin avatar

9405 posts since 17/7/05

posted 16 Oct 2020 16:06, edited 16 Oct 2020 16:06
Thanks Kadafi and Ginner Ubercool Will need to reconsider that idea.
Ulster_Blue
Ulster_Blue avatar

5386 posts since 16/7/06

16 Oct 2020 17:24
If you only have one buy to let I think it’s pointless.
Razorlight123
Razorlight123 avatar

4673 posts since 13/1/10

16 Oct 2020 17:39
Abit of a blanket statement there man, surely it's dependent on the numbers…
eazypz
eazypz avatar

3223 posts since 16/4/10

16 Oct 2020 18:23
Ulster_Blue wrote: If you only have one buy to let I think it’s pointless.

Have to start somewhere.

Imagine it would be a pain to transfer from personal to a business without incurring some sort of taxes.
jacko198
jacko198 avatar

422 posts since 23/10/09

16 Oct 2020 19:34
themistake wrote:
swede wrote:
Razorlight123 wrote: I really want to get something sorted before the 5% deposit scheme starts coming in. As it will only introduce more buyers to the market, inevitably increasing house prices.

wouldn't worry about that. it is just hot air from boris at the moment, no way it will be implemented soon. if such a thing was introduced it would kill the help to buy equity loan scheme; in turn hurting all the homebuilders he is so chummy with

All these equity loans mature in the next 2/3 years. Who is gunna buy the flats? The gov are not going to let them all deteriorate in value, so wouldnt surprise me if the 5% scheme is introduced to help the gov get their money back on these equity loans.

Im in a similar situation at the mo, start paying interest on the Gov's 20% loan next year so just going to sell up before then and give them their 20% back. Only problem being that I'm not sure anyone wants to spend £250k on a flat without using help to buy. But by using help to buy you can only buy a new property so we will struggle to sell I reckon.

If they did the 5% mortgage that would be sweet for us! But can see why they wouldn't!
joeyjojo
joeyjojo avatar

4344 posts since 24/8/06

17 Oct 2020 10:43
Rirawin wrote: Thanks Kadafi and Ginner Ubercool Will need to reconsider that idea.

Also remember if you own the property, then transfer to a company you have to pay stamp duty
Kadafi39
Kadafi39 avatar

1775 posts since 30/10/09

17 Oct 2020 12:29
eazypz wrote:
Ulster_Blue wrote: If you only have one buy to let I think it’s pointless.

Have to start somewhere.

Imagine it would be a pain to transfer from personal to a business without incurring some sort of taxes.

Yeah you have to pay SDLT on the transfer and also pay a solicitor to do the transfer at Land registry so well worth going that route from the first purchase if the numbers make sense.

Good point by Gunner though hadn't thought of implications of drawing dividends as so far I have left all the rental income in the company account to fund the next purchase.
swede
swede avatar

9064 posts since 21/3/09

17 Oct 2020 14:54
jacko198 wrote:
themistake wrote:
swede wrote:
Razorlight123 wrote: I really want to get something sorted before the 5% deposit scheme starts coming in. As it will only introduce more buyers to the market, inevitably increasing house prices.

wouldn't worry about that. it is just hot air from boris at the moment, no way it will be implemented soon. if such a thing was introduced it would kill the help to buy equity loan scheme; in turn hurting all the homebuilders he is so chummy with

All these equity loans mature in the next 2/3 years. Who is gunna buy the flats? The gov are not going to let them all deteriorate in value, so wouldnt surprise me if the 5% scheme is introduced to help the gov get their money back on these equity loans.

Im in a similar situation at the mo, start paying interest on the Gov's 20% loan next year so just going to sell up before then and give them their 20% back. Only problem being that I'm not sure anyone wants to spend £250k on a flat without using help to buy. But by using help to buy you can only buy a new property so we will struggle to sell I reckon.

If they did the 5% mortgage that would be sweet for us! But can see why they wouldn't!

did you not consider that when buying Puzzled
Razorlight123
Razorlight123 avatar

4673 posts since 13/1/10

posted 17 Oct 2020 15:15, edited 17 Oct 2020 15:15
'Get on the property ladder' innit Smiling

I'm sure they'll be buyers in the market anyway! Have faith.
jacko198
jacko198 avatar

422 posts since 23/10/09

17 Oct 2020 16:50
I guess at the time we just thought of course it would sell! I guess thats what anyone using the help to buy is thinking. It is a decent flat dont get me wrong. And the floor space was bigger than most new build 2 beds.
Our neighbours just rented theirs out for £1500 odd a month so ill go down that route if I have to but theres ALOT more to think of then with buying a second house etc!
Toasted
Toasted avatar

1672 posts since 15/10/09

18 Oct 2020 02:58
Rirawin wrote: How do the mortgage lenders actually know that:

1) You're not letting family staying there rent free
2) You're letting it out as an Airbnb. Do they carry out checks on who pays the council tax or ASTs that have been signed?
3) Is a Holiday Let Mortgage better to consider if it's used 50/50 between family staying there and letting it out as an Airbnb?

Asking for a friend.

Estate agents are snitches. It happened to me.