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TODAY'S OTHER NEWS

Osborne has “jumped the gun” on BTL regulation, say lenders

Mortgage industry insiders have expressed concern about the Government’s plans to allow the Bank of England to intervene in the buy-to-let mortgage market.

Chancellor George Osborne said last week that the Bank of England was likely to receive powers it had asked for to regulate the mortgages which landlords use to buy properties.

Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA), said: “The Government stated its intention earlier this year to hold a post-election consultation to assess the evidence for granting powers of direction over buy to let lending to the Financial Policy Committee (FPC). It was therefore very disappointing to hear the chancellor apparently jump the gun at yesterday’s treasury select committee. It suggests a stage of evidence-led policy making has been removed, and that the consultation may be limited to what those powers will be when – rather than if – they are granted.

Individual lenders also spoke out about the announcement. Charles Haresnape, Aldermore Group managing director, said the lender welcomed any policy to improve the private rented sector but said it was important that any powers granted do not jeopardise the buy-to-let market.

“The private rented sector is a vital component of the UK housing market and policy levers must be used to support the sector in driving additional capacity,” he said, “It is important that the financial policy committee works closely with the sector and uses any powers sparingly and appropriately, and not unnecessarily remove any momentum from the private rented market.”

Steve Griffiths, head of sales and distribution at Kensington Mortgages said it will be interesting to see what powers the Bank of England is given when further details are announced later in the year.

“The rental sector is becoming increasingly important to the UK housing market and many people are staying in rented accommodation for much longer than we have seen historically,” he said, “The quality and variety of such accommodation has improved significantly following the growth of buy to let, and it is vital that these standards are maintained in the future. It would be short sighted to limit landlords’ ability to deliver quality rented accommodation when many people rely on this sector.”

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    ".... any powers granted do not jeopardise the buy-to-let market."

    ...Horse..... door.... bolted.... seems to come to mind after Clause 24 will kill stone dead the BTL market.

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    “The Government stated its intention earlier this year to hold a post-election consultation" but GO clearly doesn't believe in consultation. He's proved that already. What was it Richard Dyson said in the Telegraph??? "It is a tax from Alice in Wonderland, a truly bonkers tax, a tax you’d laugh at – if it were being applied in a Third World country by a lunatic dictator". Hmmm, well we're not third wold but some of that seems to be very close to the truth!

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    Osbourne clearly wants to kill off the private rented sector completely and hand it over to his corporate buddies (who I am sure do not fund the conservative party in any way and non of whom ever went to Eaton with him).
    He is completely out of touch with the middle classes, which is an amazing thing to have to say about a conservative chancellor.
    A even more draconian chancellor than G Brown ??

    Brit Sixteen Sixty Four

    Actually I think he is listening now finally, the middle class 1st time buyers are increasingly being priced out whilst landlords ever increasing buy up the dwindling supply.

    Its simple maths with generations of priced out voters eclipsing increasingly elderly landlords who will most probably die out in a generation or 2.

     
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    People like Brit Sixteen Sixty Four never cease to amaze me.

    So a reduction in BTL will aide first time buyers? How exactly?

    A reduction in BTL will lead to a reduction in available rental property. This in turn will lead to an increase in rents due to further contraction of supply. Which will lead to a reduction of disposable income for prospective first time buyers. Which will in turn mean that they will be pensioners by the time they have managed to save up for a deposit.

    Yep. That little policy will help first time buyers no end.

    Don't give up the day job, will you.

    Brit Sixteen Sixty Four

    More 1st time buyer properties being sold more regularly will bring prices down.

    A reduction in rental property but an increase in property for sale, the renters will simply buy the properties, so no need to put up rents.

     
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    m Goe - has an increase in supply of PSR over the past 5 years driven rents down?

    A reduction may not be desired but the current pace of expansion which is occurring is politically equally undesirable.

    Seen on another site the illustration that £12k income for a LL in rent allows a borrowing of £240k based on 125% /4% int borrower calculation.

    £12k income for an employee or other self employed business allows £42k borrowing based on 3.5 times.

    I am impacted by clause 24 but happy to understand their is a contract view as many are unable to buy a home. If this reduces pressure on house prices or removes the froth over the past few years then I will live with that.

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    As Brit sixteen sixty four points out, its simple maths. 500,000+ net immigrants a year driving up demand for houses, with less than 100,000 new homes being built each year. Couple this with the demographic of more people living alone as relationships are more short lived and you can see why there is such demand for housing.
    Rents and prices can only continue to go up while demand continues to outstrip supply in such a big way. That is why big corporate investors are set to triple their investment in the private rented sector in this year alone.
    BTL investors will be squeezed , but, sadly, the new agenda is not going to help anyone to get on to the housing ladder.

     
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    m Goe - has an increase in supply of PSR over the past 5 years driven rents down?

    A reduction may not be desired but the current pace of expansion which is occurring is politically equally undesirable.

    Seen on another site the illustration that £12k income for a LL in rent allows a borrowing of £240k based on 125% /4% int borrower calculation.

    £12k income for an employee or other self employed business allows £42k borrowing based on 3.5 times.

    I am impacted by clause 24 but happy to understand their is a contract view as many are unable to buy a home. If this reduces pressure on house prices or removes the froth over the past few years then I will live with that.

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    John Dorman - The UK is currently experiencing a serious housing crisis. This is - in large parts due to reduction/cessation in building of social housing coupled with pronounced population growth. In other words, if the government built social housing stock instead of selling it off cheaply and got control of the borders, there would be a bigger supply in available houses. And THAT would drive the price down without any need to regulate the market.

    But hey! Much easier to come down on the PRS than to ask the government to do its job. And to expect people to apply a bit of common sense instead of regurgitating the clap trap our friends at the BBC trod out? That's just way too much to hope for.

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    I think most of us are pretty pissed off about clause 24! So what are we going to do about it?
    ...Here's what - everyone please Google the 'Say No To George' petition and sign it!!!
    Do it NOW!! PLEASE!!
    We've got until 27 January 2016 to reach 100,000 online signatures in order to force a debate in parliament. As of today we've got just 39,000 signatures.
    While you're about it you might as well sign the petition expressing no confidence in Osborne as Chancellor. He's getting over-confident in all sorts of areas. Having gained his second term in office maybe he thinks he's invincible. He's getting carried away.
    I've already sent him a long email on BTL taxes and I got a lengthy reply..... from his correspondence secretary.... which means....he never bothered to read my email!
    So let's do the only sensible thing and try to get rid of his bill, and if possible get rid of Osborne aswell.

    Andy
    PS If they are genuinely trying to put us in the same category as owner-occupiers then they should abolish capital gains tax on BTL properties...

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    This is going to backfire on him. He seems to forget that the BTL landlords also pay stamp duty on everything they buy & have kept the market moving providing homes due to the lack of council homes available.Yet again going for the small investor /entrepreneur they say they want to encourage. Large companies will not be affected as usual. First time buyers will continue to not earn enough for a mortgage & he will close the majority of BTL landlords out which will mean much less stamp duty coming in as well. We have already seen what he has done to properties £1,5m + again killing the market and losing all of that stamp duty that a steady market brings in. I have always been a conservative supporter BUT I must admit I was much better under Labour. I AM SIGNING THE PETITION ANDREW MITCHELL and will encourage others to do the same

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    This, coupled with the recent ill conceived (politically motivated) 10% stamp duty change is already impacting the housing market in London quite significantly. There is far less property coming onto the market. This is making things much harder for first time buyers and people needing to move home

     
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    Hi Everyone

    My first time on your site, What we are seeing with the proposed Government meddling in the BTL market shows their complete lack of understanding of what's going on for normal people, or should I say THEY DON'T CARE.

    I suppose its difficult when you come from a privileged background and never had the issue of worrying about paying utility bills or feeding your family, My advice is sit back and let then hang themselves on yet another LAUGHABLE decision which will send massive ripples across the lending sector, the Housing sector, the tenants who will have no choice but to pick up the bill so draining yet more spending ability from the high street.
    George Osborne single handedly is about to lose more votes for the conservatives than he can even imagine. Votes from the top wage earners right down to the voters receiving benefits
    Of course the Government will scramble around trying to fix it but as most governments do they are always trying to fix problems instead of preventing them.

    Idiots springs to my mind.

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    Well said all contributors from public above. We really got a few very expensively educated class in govt. who have not got the slightest clue about the REAL market place. It is not very different in the civil service/public sector either. Their view appears to be whatever they decide is fair and sod the rest. We as Joe public must shut up and pay up. A name called Putin comes to mind. After all the legacy we have now is the joint efforts of Labour and Conservative over the last 40+ years. Why not put that so-called £35 or £50, (more likely to £75 billion, by the time it is completed) into some affordable house building and sell them at cost +5-10% profit. Oh NO we cannot do that, we will be taking away the rip-off that our friends make in this sector, wouldn't we?! And we must allow whatever money coming from abroad, without any checks (on its origin) to buy expensive apartments in the city,(AND other investments across UK,) lock 'em up and leave them. Why capital gains tax them at 80%. Just for info. I am a landlord with a dozen houses and a massive borrowing.

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    Sitta, you are quite right, this government does not have a clue, neither did the labour govt before and nor will the next govt. They are all career politicians with no experience of life , or business. How can they be expected to manage multibillion £ budgets?

    The sad fact is that these senior politicians serve the people that fund their political parties. Consider Tony Blair trying to convince us that super casinos and betting shops on every corner are a good thing. David Cameron "we don't need a sugar tax" when 10% of the NHS spending is obesity related.
    Policies are most definitely not designed for the exclusive benefit of voters.

     
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    The 35+50 billion was referring to the non essential HS2 only to be used mainly by MPs, civil servants and a few very well of and made-it-in-life (good luck to this lot) people.

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