Property Tax Plus

Here’s a list of the top 100 cities and towns in the UK with homes in negative equity, according to financial research company Fitch Rating.

Landlord confidence is declining in the buy-to-let business as nearly a third of Brits (28%) believe buy-to-let property investments will make a loss in the current climate, according to mortgage research company unbiased.co.uk.

A further quarter of landlords (23%) think those invested in the buy-to-let market are likely to just about break even.

Investors with buy-to-let properties are very much feeling the financial squeeze of the current economic climate, after basking in years of relatively easy money.

Not only is the housing market in some areas over supplied with rental properties, but the value of equity or profit in buy to let properties has fallen.

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HM Revenue and Customs will fine taxpayers who voluntarily disclose unpaid tax on accounts held offshore an extra 10% of the tax due regardless of the amount of funds disclosed.

The 10% penalty on the outstanding tax owed, plus interest, for the second amnesty will only apply to taxpayers who were not covered by the first amnesty in 2007. This targeted the five major retail banks – Barclays, HSBC, HBOS, Lloyds and RBS.

HMRC said that those who had previously had an opportunity to come forward will be subject to a higher penalty, but declined to confirm the level.

‘This is the last chance for people with offshore assets to get things sorted in an advantageous way,’ said a spokesman. “It’s the behaviour we’re interested in, not the amount of money.”

Sale and rent back deals will be regulated by the Financial Services Authority from July 1, according to new legislation laid before Parliament.

Property investors have come under scrutiny for sale and rent back deals recently by the Office of Fair Trading.

The OFT report identified a number of risks to homeowners entering into these arrangements and made three recommendations, including compulsory regulation, increasing consumer awareness and improving information about housing benefits.

The legislation laid today ( June 2, 2009) includes a two-stage approach to regulation, in order to ensure consumers are protected as quickly as possible in the current market environment. The FSA will put in place its full regulatory regime in the second quarter of 2010, following consultation and the publication of its final rules.

Chief Secretary to the Treasury, Yvette Cooper, said: “The Office of Fair Trading found last year that vulnerable homeowners were at risk from unscrupulous sale and rent back operators. It’s not right that people can be pushed out of their homes through dodgy deals.”

Sale and rent back (also known as sale and lease back) market offers homeowners the option of selling their properties at discounted rates in exchange for tenancy arrangements. Sale and rent back agreements effectively combine two transactions – firstly, individual homeowners sell their property at a discount, and secondly they are offered an agreement to remain in the home as a tenant.

The Government’s much-heralded Mortgage Rescue Scheme will take 34 years to hit its target of helping out 6,000 struggling mortgage payers at the current rate of success.

The £285 million scheme has so far successfully completed two deals since January.

According to Housing Minister Margaret Beckett, local councils are receiving 1,000 inquiries a month for help from  people struggling to repay their mortgages.

Two have successfully completed deals and another 70 have had repossessions frozen to see if they can be helped under the scheme.

Now look at the math – if all 72 people receive help under the scheme out of 5,000 applicants to the end of May, that’s a success rate of a measly 1.44%.

If the inquiries remain static – as they have for the past five months, that means the scheme needs 416,666 applicants to reach the target of 6,000 completed deals.

So, that’s 416 months or 34.6 years required to meet the target – so the good news will hit the world sometime in 2041.

“We expect many more households to be helped in the coming months,” she said. “Our objective is to ensure that repossession is always the last resort and this scheme is just one part of a comprehensive package of measures we’ve put in place to assist families at risk of losing their homes,” said Beckett.

Comment – The problem is statistics don’t actually tell you anything unless they are related to people.

The Government is spinning the Mortgage Rescue Scheme figures to make a failure look like a success, but when someone sits down and actually works the math, the results look about as genuine as an MP’s expenses claim.

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