What is a recession? Are you encouraging us all to move back to the UK because houses will be cheap? Are you saying that the Easternised world will be unaffected by this phenomenon?

In what way is this different from all the Brits buying rental properties in Florida, Spain, Cyprus, Kosovo etc?

In any event, there is very little money to be made from renting out property in the UK these days. And a lot of BTL investors will get their fingers burned given the current events.

Depends on what you call little money. I have a property that earns 40k a year in the UK.

I think BTL just doesn't add up for people looking to get into the market now (unless they can buy cash, that is). Rental yields just don't match the mortgage you'd be paying on a property these days.

40k a year? Does the address end in "Palace"?

Typical BTL rental yield is around 6-7% in the UK at the moment - this means your property is worth around 625K.

If you have a mortgage then a sizeable chunk of the 40K is spent on the mortgage interest (most in fact) with the rest being taken up with insurance and letting agents and wear & tear.

If you do not have a mortgage then you could be getting around 6% interest from a bank by leaving the money on deposit.

Either way there is little revenue money to be made from BTL at the moment - just the dream of ever increasing property prices to give you a capital appreciation.

Sorry dunroving but I just can't agree with that statement. I have plenty of friends who have rental properties, most came from middle class backgrounds, some from working class - they saw an opportunity, took the risk and went for it (with some eye watering mortgages). They continue to have to work to manage the properties or give away most of the profit to agents to do it for them. Most saw it as a way of generating a pension fund rather than generating extra income. They were lucky with their timing.

All of them work and so any profit from letting is taxed at their marginal rate - 40% for all of them. Plus they pay VAT on their letting agents fees etc etc.

I do belive that the UK needs to build more property to improve the supply side of the equation, I also believe that there should be a higher rate tax band on all income over a certain amount (say 45% on over 100K), but directly penalising productive, entrepenurial people who are taking steps to assure their retirement is not the right message to send. One of my friends earns around 40K, but has two BTLs generating around 10K profit per year - why should he be taxed at a higher rate than someone earning 1M pa?

got it in one!

Well, that's a whole different question, and I'd be very happy for millionaires to pay their fair share instead of hiring expensive CPAs to find convenient tax loopholes.

I hear what you are saying, and it would be drastic to levy burdensome taxes on your friends in one fell swoop. But the graduated introduction of appropriate tax laws woulkd give them time to sell their properties if they can no longer make money from them. As you said, they had lucky timing, so if they sold up now they certainly wouldn't lose out. I guess it's a question of what is fairer - for your friends to continue to make money from their good timing, or for working class people to be able to own a house.

Agree with you also that building more affordable housing is part of the solution.

No but it is in prime location.

No Mortgage and brought the property at a depreciated price, having the tenants apparently made it much cheaper. In fact I got it for half price. No letting agents, so none of their fees. But it it is in a good location where demand is high and supply is low and in a good area. It is also a good site for development and since the area is being developed, I could later sell it to a developer or develop it myself as there is room for a few houses.

When I'm in the UK, part of it will be my primary residence, so if I did sell it, I wouldn't pay capital gains on it. So I'm on a win win with it. But I brought it for my pension fund and as I work for my own company any money will be re-invested anyway, and it will be higher than what I would have got if I had put the original sum in the bank in a deposit account.

Sorry Jersey girl the message was meant for the OP!

oooppss

Hello again. As you may have heard the Fed has cut rates by 50 basis points. This is absolutely disastrous for value of the dollar. Any Americans on this board should expect rampant inflation. If you do not believe me, do a little research. This is terrible news for US economy.

The sky is falling! The sky is falling!

Forgive me. Have i logged onto the Wall Street Journal by mistake?