BTL - Is the party over?

You know when you've had one too many at the party and your significant other says it's time to go home? It can be difficult to take her advice, especially when there still seems to be lots of people ringing the doorbell to come in. For the BTL investor, is it time to take that last drink?

The doom-mongers out there can give you statistics that BTL lending is down, it's harder to get mortgages as lenders have tightened criteria, tax relief is fading away and of course there is the 3% tax to consider. Some say that it is a slow motion train crash waiting to happen. Low wage inflation, so rents cant be pushed much higher. Low capital growth because people have hit their limits on stricter mortgage rules - who do you sell your property to? Mortgage rates are going northwards and at the same time your ability to deduct mortgage payments against taxis being removed. It looks like a tough market out there.

But on the other hand if you are smart and wrap the property in a limited company wrapper to avoid the tax changes then there is still a huge rental demand out there. We are becoming a nation of renters as we continue to refuse to save, live with champagne tastes and Tenants lager money and abuse the credit system.

My view is that there will be a raft of property that comes onto the market during the tax change period where investors take their profit. Now some of them will re-invest in limited companies and continue to play the game but for many they will be grabbing the taxi with the wife and speeding of to drink vast quantities of water before going to bed. There will also be those who arrived at the party late after the pubs closed. Coming to the party well equipped with their shiny new limited company means that are in the prime position to make it work.

So is the party over - it depends when you arrived!