Mortgage Rate Rises

unwashed potato! said:
What a joke that tax free allowance is.

5 years ago tax free allowance is the same as it is today, and it's the same for those who live up north in a village as it is for those who live down south.

Imo the allowance should be put up significantly, let those with spare rooms, rent them out. More rooms for rent mean more competition, and keeps rent prices down.

This also means more income for those with mortgages. We currently have 2 people renting rooms in our house, have for 5 years since we took the mortgage, however we often kick one of them out for 6 months of the year as it's just not worth losing loads of it to tax, so better to have less disturbance during the winter months when we are home more.

It is however stupid, we get good decent tenant that we tell to go, who ends up finding a more expensive room, just because of the out dated tax allowance amount.

Imo it should be at least 9k per year

I don't see any negatives of doing this.
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The tax rate could be high, and based on your overall tax, from what I understand. The needs balance out the loss of privacy and the tax rate, hence why I understand.
 
flea.rider said:
for a good tenant you could charge them less and keep a roof over there head .. ?? there still helping you pay your mortgage
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Sure, but during winter months in particular, they are taking up our space. Losing a load to tax just makes the benefit of them less.

E.g of that £500 rent, let's say we lose £50 to energy usage etc, we lose £100 to tax, and we lose part of our house. So it ends you being £350 maximum per month we are getting, or £175 each to have someone extra around during cold winter months when everyone is home more.

plus that tax we pay, isn't paid monthly but a lump sum we have to get together come payment time.

You're right we'd still earn more, but just not enough.

My point being that how many years has the allowance been exactly the same? 7 years? 10 years? It's more than 5 at least. I don't see the downsides to this being increased.

There will be plenty people that know they could rent out a room in their house, perhaps with ensuite for £800 per month, however, as its offer the allowance, they need to now do self assessment each year, save a bit for tax, etc etc.
 
taB said:
Relief is currently £7500 which is £625 a month tax free. Seems fine. Renting out 2 rooms in your house and expecting tax exemption for the lot seems a bit entitled; it's income after all.
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And it's the same relief for many many years. Why hasn't it gone up? That relief is dropping each year due to inflation. This can be agreed that 10 years ago £7.5k relief was better than that same £7.5k today?

Us renting 2 rooms is distracting as in reality, £625 is low price per month for rooms around here, and we rent ours out for much less. We could increase rent but we currently haven't, however was looking just last night with one of the tenants, and like for like the minimum is £650 plus energy bills, but more like £750 per month.
 
unwashed potato! said:
Sure, but during winter months in particular, they are taking up our space. Losing a load to tax just makes the benefit of them less.

E.g of that £500 rent, let's say we lose £50 to energy usage etc, we lose £100 to tax, and we lose part of our house. So it ends you being £350 maximum per month we are getting, or £175 each to have someone extra around during cold winter months when everyone is home more.

plus that tax we pay, isn't paid monthly but a lump sum we have to get together come payment time.

You're right we'd still earn more, but just not enough.

My point being that how many years has the allowance been exactly the same? 7 years? 10 years? It's more than 5 at least. I don't see the downsides to this being increased.

There will be plenty people that know they could rent out a room in their house, perhaps with ensuite for £800 per month, however, as its offer the allowance, they need to now do self assessment each year, save a bit for tax, etc etc.
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take it you dont give them a lease agreement ? so use abuse and kick them out .. wow ... glad i don't know you ..
 
Doobedoo said:
I pay 600 a month for my mortgage, why someone would want to live your way and pay 750 a month for a room is beyond me.
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That £600 is what you pay in the first years of having a mortgage, or now after paying off for 10/15 years?

Freedom to move is one reason people pay to rent. We have an Asian girl that is here in the town for 2 years. I don't see her buying a house for that time.

Not being able to meet mortgage affordablility checks is another reason people pay that to rent. He's got a kid with an ex so can't move far. Impossible to save enough etc.
 
flea.rider said:
take it you dont give them a lease agreement ? so use abuse and kick them out .. wow ... glad i don't know you ..
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I rent out rooms, as everyone is saying people now have to do to survive the mortgage crisis. I already have been doing that for 5 years. I welcome people into my house, and charge them less than market value. You're getting confused with renting a whole house, comparing to renting a room in a house with a landlord. People don't expect to be in that room for years, let alone 12 months. They know what to expect, they don't want a lease for a year but a monthly thing so that when they find their long term place they can freely move to it, without having to give 3 months notice etc.

I had an aussie guy stay, was with us 5 months. Worked for him, worked for us. Plenty examples like that over the years. Some French girl, December to April. Lost her job, moved back home 2 weeks later. Imagine her paying twice the amount per month to rent with an agency, be stuck in a 12 month contract etc.

But yeah I'm glad I don't know you either.

I have to have their mess in my kitchen, their stuff in the dishwasher for days, their clothes drying in my lounge, their stinky fridge, their mess in the bathrooms. Living with others isn't easy, living with 2 others is harder.

All I'm saying is that 7.5k relief should be increasing, as its not done for a long time now. We can agree that the relief is worth less now than it used to be.

On top, at a time when rent is flying up, there just isn't enough competition, especially low cost but still decent completion, increasing the benefit for landlords to rent rooms in their house makes sense to me. At some point, whenever the 7.5k relief was set (does anyone know when this was set?) the powers that be decided 7.5k was correct at the current market rate. Why is it not going up?
 
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Jelly4mybelly said:
I do think the idea of raising VAT on goods and services has merit. But perhaps increases depending on the item cost.

Anything individual items under £5 stay as they are then perhaps something like

2.5% extra on £5-50
5% extra on £51-500
7.5% extra on £501-£5,000
10% extra on £5,001+

I cannot imagine it will be too onerous to get this implemented on websites or checkouts.

I suggest that some exemptions would be necessary, but the BOE using this one lever to beat everybody including those who cannot afford to indulge in luxury spending seems wrong.
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This would just create lots of cumbersome 'exploits'. Like instead of paying a window cleaner £55 you pay him £4.99 per window or something. Instead of a Burger and chips for £8.99 it is £4.99 for the burger and £4 for the chips, etc.

It would also be nightmare to implement in some software. Would cost the economy millions.
 
HangTime said:
This would just create lots of cumbersome 'exploits'. Like instead of paying a window cleaner £55 you pay him £4.99 per window or something. Instead of a Burger and chips for £8.99 it is £4.99 for the burger and £4 for the chips, etc.

It would also be nightmare to implement in some software. Would cost the economy millions.
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Perhaps a better idea would be, if your turnover is more than a million, then you charge 25 percent.

VAT is already a killer for small businesses that are not competing against the big boys, but competing against the non vat registered businesses. Increasing vat for them, I can only see resulting in more cash jobs, or more jobs being won by the non vat businesses, so less money for the government.
 
Mrwong said:
Did I say they were my parents :cry:, btw everything was above board, nothing illegal when it comes to HMRC.
I did say there was more to the story.
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If you rented out your property, on a non-buy-to-let mortgage, you would have been in breach of your mortgage agreement.
 
UK problem?
"In May, increases to flight fares, second-hand car prices, live music events and video games all drove prices higher.
One analyst said it was possible the release of Nintendo's new Zelda had helped boost the sale of computer games."

This was from an article on the BBC, it's our fault for buying Zelda - we can expect Diablo 4 next month and FFXVI after that!
 
Doobedoo said:
I pay 600 a month for my mortgage, why someone would want to live your way and pay 750 a month for a room is beyond me.
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Because people who aren't on higher incomes who can't afford deposits and can't get a mortgage to start with have little choice, renters are almost always those on lower incomes who end up paying a larger chunk of their income on it
 
Blackjack Davy said:
Because people who aren't on higher incomes who can't afford deposits and can't get a mortgage to start with have little choice, renters are almost always those on lower incomes who end up paying a larger chunk of their income on it
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It’s crazy numbers though. 750pm on a room. Yikes.
 
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