UK Landlord Forum / Life

What are our predictions then?

I reckon it'll be a hold.


V

I think they will hit 6%.  Mind you saying that there is talk of an election so maybe you are right and they will hold.
I think at some point this year 6% will be hit or maybe even higher.

Good news Badger 
Whens the call 7th Sept !

I think it will hold.

But, I think at some point this year it will def move to 6%

Hold for two months on the trot please let this be true MY GOD LET THIS BE THE TRUTH lol

Ok over dramatic i know
Runs to the corner of the room and hides under some old news paper 

Have you got a variable rate mortgage, badgey?

Quote from: Badger on September 03, 2007, 01:10:05 PM

Good news Badger 
Whens the call 7th Sept !

6th September, I think!

Quote from: propertyfag on September 03, 2007, 01:36:01 PM
Have you got a variable rate mortgage, badgey?

Yes mate on both, to be honest the places are my retirement fund, so even when i have to pay over the rent to be inline with the mortgage, its still smaller than a pension scheme !.

What about you, how willyou be effected


Badger

Well, one is on a fixed rate until next year, and my other is on a variable rate. But for the same reasons as you said, I don't mind paying a little extra if rates increase

Quote from: Badger on September 03, 2007, 02:14:32 PMto be honest the places are my retirement fund, so even when i have to pay over the rent to be inline with the mortgage, its still smaller than a pension scheme !.

That's a good way of looking at it.

It wouldn't be so bad if you actually paid the BoE rate; HSBC variable rate is currently 1.25% above it!

My mortgage is still fixed rate atm (think its something tasty like 5.5%, I forget ... there's nothing I can do about it right now anyway!) but it switches to variable rate next summer, and then becomes repayment (currently interest only with up to 20% overpayment allowed before fees kick in) the summer after.

Am limited in my options w.r.t remortgaging at the end of that, atm, because there's hardly any capital in it (FTB on a grad scheme 100% mortgage). The market doesn't look like it'll rise very much in the near future either, but I am making overpayments and putting some money aside where poss.

The true equation, mind, is that for comparison purposes with other investments you have to take into account the money that would've been spent on rent, so its still a reasonable investment right now.

Only problem with changing to repayment is that you will have to start paying tax (if you're a good person)

Remortgaging every few years is the way forward. Otherwise you're just throwing money down the drain due to laziness!

Quote from: propertyfag on September 04, 2007, 10:48:12 AM
Only problem with changing to repayment is that you will have to start paying tax (if you're a good person)

I'm confused. What tax do I need to start paying?

My current mortgage is as a private individual, but commercial mortgages (for the Ltd company) are also of interest

Ahh I just remembered, you're not letting.

If you let your property, and you have a repayment mortgage, you have to pay tax!

Sorry for the confussion! Hope you didn't start panicing

If I let my property and have a repayment mortgage, which bit do I need to pay the tax on?

You minus your rental income from the interest you're paying on your mortgage. And whatever is left over is what gets taxed. Or at least, what's meant to be taxed!

That doesn't apply if its a Ltd though does it, until you start taking money out the company account?

In fact, come to think of it ... aren't you always supposed to pay tax on *all* of your rent, unless you have a company set up? I thought that was the whole point; its classed as income as long as you're an individual, and individual's can't claim their costs back against their revenue and argue their actual income is lower.

Or I could be wrong, otherwise how would sole traders make any money at all?

Even if it wasn't repayment, and you were allowed to claim your mortgage interest as a cost against tax, surely you'd still have to pay tax on any surplus of rent above the mortgage payment, as that would still be income.

Morning V,

When you let properties, it's classed as a business, even if you're not a registered company.

Landlords have to pay tax on the net profit (CGT).

I'm not entirely sure about the LTD situation. But I assume if you're running a letting company, it works the same as any other company. You take a salary/wage, get taxed on that. And any profit you have left over at the end of year, is taxed as dividend.

Yeah, you are meant to pay tax on any profit, regardless of what type of mortgage it is. However, paying tax on repayment mortgages is a little less unavoidable than interest-only (from my experience).

If your taxable income from letting property is £15,000+ in a tax year you must declare it on the full Self Assessment tax return. If it's under £15,000 you may be able to complete a shorter four-page return. If it's under £2,500 your Tax Office may be able to collect any tax you owe through PAYE (Pay As You Earn) if you already pay tax this way.