Property Hawk the landlord's homepage since 2006
Free Tenancy Agreement FREE tenancy agreement
Free Landlord Software FREE landlord software
Home | Property Manager | Free ASTs | Landlord Forms | Mortgages | Insurance | Inventory | Magazine | Landlords Bible | Directory | Forum | Training | News / Blog |

Sunday, May 22, 2016

Should I Brexit from buy-to-let?

From time to time I like most landlords contemplate the unthinkable to jettison and sell up my buy-to-let properties and 'brexit my buy-to-lets!' Is this sensible? Is it a gut reaction or there is some credibility in taking my money and running and jetting off to a beach somewhere to live out a hassle free retirement.

"There are a number of reasons for landlords like me to seriously consider selling up":

1. Landlord legislation and taxation is getting more restrictive and expensive.  The latest tax grab by the Chancellor is going to hit higher rate tax payers hard and make many question whether its worth the hassle.
2. There is more competition.  More people are buying rental property in a desperate search to supplement their retirement income and generate a return from savings that currently earn nothing in a savings account.  More landlords and rental property means more competition and the likelihood of potential higher rental voids.
3. I'm bored!  Personally, I've being doing this rental property bit for over 25 years (that's over half my life).  It gets tedious and sometimes you just want a change.
4. Politicians are after landlords. The Tories see landlords as a cash cow to tax and raise money to plug the budget shortfall.  Labour have always hated landlords and are itching to slap on rent controls to appease the rental classes.
5. Are property prices about to plunge if we do Brexit so it could be a good time to sell up.

However, just like the Brexit debate there are equally compelling arguments for me to keep my rental properties:

1. They earn me money! Ok it sound basic but it's true.  Through the credit crunch the ensuing crisis my buy-to-let properties earned me good money an income that kept me going through thick and thin.  We all know that interest rates will rise sometime but looking at the example of the Japanese crash this could be a long way off.  Until they do I'm generating a very good income from my buy-to-lets.
2. If I did sell up what would I do with my money?  At the moment there are few compelling investment propositions with where to put your cash.  The stockmarket is looking rocky. I don't need the cash and having all that cash could just lead me into a life of fast cars, fast women and a massive drugs habit. Maybe I'm too old for this.
3. Like many landlords if I was to sell in one go I would be faced with the potential of a large capital gains bill.  This means that in reality to unwind my property holding in a tax efficient way this would probably have to be done over a number of years.
4. I quite like being a landlord.  Ok perhaps I shouldn't admit to this but I do quite like being a landlord.  Having my property assets as a fallback and a little rental cottage industry to look after maybe in my retirement.  It a business to run without being tied to it in the way other businesses are.

So should I brexit my buy-to-lets?  

Perhaps much like in the wider European debate the vision of freedom and a painless independent existence is a mirage. 

Life, property, people are problematic, complicated and interconnected. 

That's life you pays your money and takes your choice.

Landlord insurance - use our expert brokers


The_Maluka said...

Mr Osborne made the decision for me in the middle of last year. I intend to sell and retire to an Asian land of leisure, slow boats, sandy beaches and bikini clad girls.

Now is the time for landlords to invest in Bed and Breakfast for I will make nearly 100 people homeless in the process, innocent casualties of the government war on landlords.

Anonymous said...

A life on some tropical beach doesn't sound too bad... It's pretty clear that the govt doesn't want landlords of any kind, and I'm getting very tired of keeping this up.

My tenants are students (primarily international ones), and I guess the idea is that the 40k+ students in my city simply should live in the ~6k overpriced rooms provided by our two universities... I'm sure that's gonna go down well with the parents, who ultimately will have to foot the bill... Or maybe they should all get mortgages and purchase their student accommodations, since it's gonna be so affordable after the govt killed the B2L sector?

In fact, without private student lets, one of UK's most successful industries (selling higher education to foreigners) will soon be little more than a distant memory. Overseas students contributed well over £20 billion to the UK economy last year (about ten times more than the offshore oil and gas industry), and practically all overseas students live in student B2Ls...