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MPs, second homes, capital gains tax and Property Watch by Lawrenson of LettingFocus.com

In my last post I said that one of the real reasons why a landlord register and landlord licensing is on the agenda is that the powers in Westminster think that lots of landlords are not paying their taxes and so a register would give HMRC more info on this.
Of course, the rogue landlords – the ones who fail to repair their properties and treat tenants like dirt - will not be inclined to register and most definitely won’t if it involves making them liable to pay tax, thus registering the whole exercise potentially pointless and making the register just another bit of bureaucracy for good landlords, but hey, that’s another story covered last week.
But how funny it was, then, to to see some legislators caught with their noses in the trough on second homes – as if their generous final salary scheme was not enough.
A lot of this is to do with the definition of what constitutes a principle private residence or PPR (whch are capital gains tax exempt) and the dubious practice of flipping from one house to another to claim PPR on both.
Lots of landlords have already sailed pretty close to the wind on this and I dare say a few MPs will have got the UK’s top selling Property Investment Book to read the very detailed tax chapter which explains in detail how capital gains taxes can be ameliorated by living in a let property for a time.
Now that some of them have rather taken the mickey (to put it mildly) by overusing exemptions like this we may expect to see the whole area of PPR and Private Letting Relief being looked at again.
This could end up badly for landlords.
Nothing that’s free ever lasts too long and I see landlord friendly letting site GumTree seems to have now altered their system so it’s not so easy any more to refresh ads and still appear near the top of the next days listings.
Also, they seem to have got pretty tight about what constitutes a professional landlord – making pretty well everyone pay for ads as can be seen by the fact theat there are now very few private ads that are now posted at the site.
They even banned a guy I know who has just two let properties! Hardly makes him a pro does it? (He actually complained and they re-instated his ads.)
But on the old internet there is always someone else ready to come along and offer a freebie.
At the site LetUrself.co.uk they have set up a website for landlords who don’t need a high street letting agent and who are happy to do a fair bit of the legwork themselves. A bit like Gumtree in the old days then!
They offer all the same services of a traditional letting agency so you can get your let property on the big portals and if you register before the end of May, then for every property that you upload, you will receive 28 days free advertising on the website.
Sounds good.
Did you see Property Watch?
Not a bad show apart from the fact that someone had told the usually great presenters to gurn a la Gordon B on Youtube. Didn’t bother me but it annoyed The Boss in our house.
I actually contacted the show’s researcher and had a perfectly successful landlord lined up for them.
He has 60 houses in the north Manchester area. He’s a great down to earth chap who has done very well in buy to let and who has great relations with his tenants too.
Unfortunately, the show clearly wanted someone who made a muck up in buy to let and so despite speaking to my man 8 times they put someone on the show that had made a complete hash of being a landlord.
Typical anti landlord media in other words, but if scare stories like the one they featured keeps out a landlord who doesn’t want to find out how to do things properly by frightening them off, then that may be good for tenants who can also suffer if their landlord doesn’t know the ropes.
Oh, two years ago arch property bear, Merryn who featured on the programme every night and is usually an excellent analyst, said to invest in Japan. I did, and the two investment trusts I put money in are both 40% down.
So the message is make your own mind up.
And if you think these shows could do with some new faces and maybe have the author of the UK’s top selling property book on, do let them know won’t you.
I have a few mortgages with a certain big buy to let mortgage lender.
I pay an interest only mortgage so could not figure out why the final balance on my mortgage statement was higher than the opening balance 365 days earlier.
The geniuses at their call centre tried in vain – “Its daily balances….it’s when the interest is applied that is different from the pay date… blah blah” but could not give me a sensible answer and in the end gave up and sent me a credit for the difference.
I suggest you check your mortgage account statement and if you find the same thing has happened to you, you give them a ring and get your money back.
I’ve phoned the PR department of this lender for their view on this but they clearly can’t be bothered to get back to me so expect to see this in the press soon and the lender named.
On a related point, see also my article on claiming back unfair mortgage exit fees
For new mortgages, I see that mortgage lenders have cut mortgage interest rates, “application fees” and deposit requirements for standard residential mortgages.
But over on buy to let mortgages, the rates, fees and deposit requirements are staying stubbornly high.
It’s still impossible to get a buy to let mortgage unless you have 25% of the equity to put in and can also stomach application fees of 3% on your mortgage loan on top.
So, the would-be new landlord is still frozen out.
With a lack of players in the market the lenders who are still involved are getting away with this nonsense.
Surely, the downside risks for the mortgage lenders cannot justify these daft rates, high deposit requirement and exclusions.
Hopefully, a more dynamic lender will be along soon and shake it up.
Come on in, Santander – who seem a lot more savvy than most of our bankers!
If you need help navigating landlord mortgages, try the broker, Mortgagesforbusiness.co.uk. Click on Great Rates on Buy to Let Mortgages and quote LettingFocus for their special offer of £250 brokerage on buy to let mortgages which they have set up especially for us.
I’m David Lawrenson of LettingFocus.com - the property investing experts. Read Property Articles.
I’m the author of “Successful Property Letting” which for the last 3 years has been the UK’s top selling property book - buy Property Investment Book.
The new edition is for accidental and experienced landlords and is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing and capital gains taxes.
I’m an expert property writer and property speaker - and I run the well known landlords blog that you are reading now.
I contribute to newspapers and a host of property websites, write a number of columns in the press and I provide general advice on property letting and consulting to anyone looking to buy property for themselves or to let out. I can help private individuals with any aspect of buying property or buy to let.
What’s unique about lettingfocus.com is that we offer independent unbiased advice on renting out and investing in property because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from these sources.
On the contrary, we are often asked to evaluate other property investments.
Find out about some great deals we have arranged at our Landlords Links page.
Copyright: David Lawrenson 2009. This blog is updated roughly once a week.
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