Go Back  British Expats > Living & Moving Abroad > Australia
Reload this Page >

Nationwide adding 1.5% to residential mortgage rate for let properties

Nationwide adding 1.5% to residential mortgage rate for let properties

Old May 24th 2010, 5:15 am
  #1  
BE Enthusiast
Thread Starter
 
Joined: Jan 2005
Location: with the Carnaby cockatoos
Posts: 526
rockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud of
Default Nationwide adding 1.5% to residential mortgage rate for let properties

Just been on the Nationwide building society website to obtain the 'permission to let' form and noticed that they are introducing an additional 1.5% fee on mortgages where the property has been let for 3 or more years, effective 1st Dec 2010.
See attached link for details http://www.nationwide.co.uk/mortgage...on/letting.htm

Will now consider trying to sell it rather than continue to rent it out and pay another 60GBP/month from December.
rockpeblar is offline  
Old May 24th 2010, 5:29 am
  #2  
Proudly Deplorable
 
Amazulu's Avatar
 
Joined: May 2003
Location: Alloha snack bar
Posts: 24,246
Amazulu has a reputation beyond reputeAmazulu has a reputation beyond reputeAmazulu has a reputation beyond reputeAmazulu has a reputation beyond reputeAmazulu has a reputation beyond reputeAmazulu has a reputation beyond reputeAmazulu has a reputation beyond reputeAmazulu has a reputation beyond reputeAmazulu has a reputation beyond reputeAmazulu has a reputation beyond reputeAmazulu has a reputation beyond repute
Default Re: Nationwide adding 1.5% to residential mortgage rate for let properties

Originally Posted by rockpeblar
Just been on the Nationwide building society website to obtain the 'permission to let' form and noticed that they are introducing an additional 1.5% fee on mortgages where the property has been let for 3 or more years, effective 1st Dec 2010.
See attached link for details http://www.nationwide.co.uk/mortgage...on/letting.htm

Will now consider trying to sell it rather than continue to rent it out and pay another 60GBP/month from December.
Just goes to show that wherever you are the banks will try and f**k you over.
Amazulu is offline  
Old May 24th 2010, 6:18 am
  #3  
BE Enthusiast
 
Joined: Nov 2009
Location: Dullsville
Posts: 672
pomtastic has a reputation beyond reputepomtastic has a reputation beyond reputepomtastic has a reputation beyond reputepomtastic has a reputation beyond reputepomtastic has a reputation beyond reputepomtastic has a reputation beyond reputepomtastic has a reputation beyond reputepomtastic has a reputation beyond reputepomtastic has a reputation beyond reputepomtastic has a reputation beyond reputepomtastic has a reputation beyond repute
Default Re: Nationwide adding 1.5% to residential mortgage rate for let properties

Consider carefully what you are doing as there rumours of CGT being increased to 40-50% in UK on buy to let properties. The UK Govt is trying to claw back as much as possible from the financial crisis, make sure no stone is unturned as you don't want to be up for loads of tax if you do eventually sell it or if a ton of properties flood the market and you are left with a property that is unrentable becuase of increased competition.

http://www.independent.co.uk/money/m...e-1980387.html


A capital gains tax rise could spark an exodus of landlords. Chiara Cavaglieri and Julian Knight report


Sunday, 23 May 2010

Sale taxed: Second home owners and landlords are fearful that capital gains tax may rise to as high as 50 per cent

The plan to raise capital gains tax (CGT) from 18 to 40 or even 50 per cent sends a red alert to Britain's buy-to-let investors. Profits made on the sale of property that is not used as a main home are subject to CGT, and with the emergency Budget a month away, there are some who suggest a fire sale of buy-to let property could be under way.

"The suggestion that capital gains tax could be as high as 50 per cent next April could hinder many buy-to-let investors who are looking to leave the market, as well as those looking to make their move into it and who plan to sell in the short term. This problem is likely to be compounded later this year as interest rates begin to creep up," says Dominic Toller, managing director of PropertyEarth.net.

A surge in property sale instructions could cause UK house prices to fall, offering more opportunities to other homebuyers and new investors who can take advantage of existing landlords with several properties on their books looking for a quick sale. These investors face a hefty increase in their tax bill once the increase kicks in, and they may well decide to sell and be taxed for any gain at the current CGT level. This decision will be based largely on how they think the property market will fare as a whole.
pomtastic is offline  
Old May 24th 2010, 7:02 am
  #4  
Forum Regular
 
Joined: Apr 2009
Posts: 59
GoldCoastOrBust is just really niceGoldCoastOrBust is just really niceGoldCoastOrBust is just really niceGoldCoastOrBust is just really niceGoldCoastOrBust is just really niceGoldCoastOrBust is just really niceGoldCoastOrBust is just really niceGoldCoastOrBust is just really nice
Default Re: Nationwide adding 1.5% to residential mortgage rate for let properties

Originally Posted by rockpeblar
Just been on the Nationwide building society website to obtain the 'permission to let' form and noticed that they are introducing an additional 1.5% fee on mortgages where the property has been let for 3 or more years, effective 1st Dec 2010.
See attached link for details http://www.nationwide.co.uk/mortgage...on/letting.htm

Will now consider trying to sell it rather than continue to rent it out and pay another 60GBP/month from December.
Exactly why I had to wait for a sale, the economics of switching to BTL were horrenously expensive, I was looking at fees in excess of 10K which I doubted I would get back...
GoldCoastOrBust is offline  
Old May 24th 2010, 7:29 am
  #5  
Pie Eater
 
coolshadows's Avatar
 
Joined: Sep 2007
Location: South Australia
Posts: 770
coolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud of
Default Re: Nationwide adding 1.5% to residential mortgage rate for let properties

Originally Posted by pomtastic
Consider carefully what you are doing as there rumours of CGT being increased to 40-50% in UK on buy to let properties. The UK Govt is trying to claw back as much as possible from the financial crisis, make sure no stone is unturned as you don't want to be up for loads of tax if you do eventually sell it or if a ton of properties flood the market and you are left with a property that is unrentable becuase of increased competition.

http://www.independent.co.uk/money/m...e-1980387.html
As far as I know PR visa holders are not subject to UK Capital Gains Tax, only income tax on rental income (though there is a dual tax agreement, so you don't pay twice).

Q9. I am leaving the UK shortly, am I liable to capital gains tax in the year I leave the UK?

A. Yes, but if you cease to be resident or ordinarily resident in the UK, you may, by concession (extra statutory concession D2), not be liable to capital gains tax on gains arising to you from disposals made after the date of your departure. However, you can only qualify for this concession if you were neither resident nor ordinarily resident in the UK for the whole of at least 4 of the 7 tax years immediately preceding the tax year in which you leave the UK
source: HM Revenue website

Last edited by coolshadows; May 24th 2010 at 7:36 am.
coolshadows is offline  
Old May 24th 2010, 9:57 am
  #6  
Lost in BE Cyberspace
 
Bermudashorts's Avatar
 
Joined: Feb 2009
Location: UK
Posts: 14,284
Bermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond repute
Default Re: Nationwide adding 1.5% to residential mortgage rate for let properties

I think that an extra 1.5% is not bad to be honest, my mortgage rate is less than 1% at the moment and would probably have to move to a rate of about 5% if I let it out. I would bite my bank's hand off if they offered a rate only 1.5% higher.

Anyway to this tax thing. Firstly UK CGT is not paid by people that have not been resident in the UK for five years. If that does not apply to the OP, then if the property was their main residence at some point in the past then Inland Revenue will first of all treat the final three years of ownership as if they had still lived there anyway. Then, if it has been rented out for more than three yars there is 40k of "letting relief" that would be allocated against any capital gain, which itself would be pro rated over the entire period of own occupation versus letting out. Then there is an annual capital gains allowance and x 2 if the property is in joint names

I know that is not explained in great detail but I am in a rush . But in a nutshell what I am trying to say is that one would have to make a ginormous profit on a house that was previously a main residence before UK CGT would kicks in.

I think there is a lot of scaremongering in the media about this 40 / 50% CGT thing to be honest. My understanding is that CGT is expected to be charged at the taxpayers *marginal* rate of tax which yes for some people would be 40 or 50% and this is exactly as it was 18 years ago at least (when I started training as an accountant) up until about 18 months ago when it was reduced to 18%.
Bermudashorts is offline  
Old Jan 12th 2011, 11:06 am
  #7  
BE Enthusiast
 
chris120's Avatar
 
Joined: Jan 2007
Location: UK ex Rome
Posts: 690
chris120 is just really nicechris120 is just really nicechris120 is just really nicechris120 is just really nicechris120 is just really nicechris120 is just really nicechris120 is just really nicechris120 is just really nice
Default Re: Nationwide adding 1.5% to residential mortgage rate for let properties

Any updates on this? I have a variable rate NW mortgage on a UK property. Has anyone managed to avoid paying this extra 1.5%.
What stops NW raising it to 10% next year?
chris120 is offline  
Old Jan 12th 2011, 11:31 am
  #8  
BE Enthusiast
Thread Starter
 
Joined: Jan 2005
Location: with the Carnaby cockatoos
Posts: 526
rockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud of
Default Re: Nationwide adding 1.5% to residential mortgage rate for let properties

Originally Posted by chris120
Any updates on this? I have a variable rate NW mortgage on a UK property. Has anyone managed to avoid paying this extra 1.5%.
What stops NW raising it to 10% next year?
I still have the house in the UK and have just checked my mortgage statement online and it appears that I haven't been charged the extra 1.5% yet. Will see what happens when they take the monthly payment later this month.
rockpeblar is offline  
Old Jan 12th 2011, 12:17 pm
  #9  
BE Enthusiast
 
chris120's Avatar
 
Joined: Jan 2007
Location: UK ex Rome
Posts: 690
chris120 is just really nicechris120 is just really nicechris120 is just really nicechris120 is just really nicechris120 is just really nicechris120 is just really nicechris120 is just really nicechris120 is just really nice
Default Re: Nationwide adding 1.5% to residential mortgage rate for let properties

i received an "application for permission to let" document, it contained the requirements for a temporary let, i have not yet returned it although my letting contract conforms to the requirements. have you seen or returned this document?
chris120 is offline  
Old Jan 12th 2011, 1:11 pm
  #10  
BE Enthusiast
Thread Starter
 
Joined: Jan 2005
Location: with the Carnaby cockatoos
Posts: 526
rockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud ofrockpeblar has much to be proud of
Default Re: Nationwide adding 1.5% to residential mortgage rate for let properties

Originally Posted by chris120
i received an "application for permission to let" document, it contained the requirements for a temporary let, i have not yet returned it although my letting contract conforms to the requirements. have you seen or returned this document?
Yes and had their reply confirming I can let the property for another 3 years. Will wait to see what happens this month.
rockpeblar is offline  

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service -

Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.