Michael Fickling

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It is fundamentally wrong for any government to effectively grab anyones property against their wishes and pass it on to someone else.. Thats the basic point here. There are of course many other problems with this proposal.. like the fact that the government allowed/encouraged us to put domestic property into pension plans and indeed many of us actually invested in property effectively as our pension/income provision for later life. Effectively forcing such landlords to sell to tenants is to seize these peoples pension and prevent any further growth in same through either capital gain or rental profit. Also what about the many of us who have built up tax losses whilst doing so. The only way to benefit from such a loss was to eventually get into profit and have the profit of later years untaxed or at reduced tax due to carried forward losses .If such a landlord is forced to sell they take a further loss because they lose the benefit of being able to effectively use any accrued losses to offset taxation on later profits achieved on rents. There will be many other double loss scenarios too such as mortgage redemption penalties on what may be long term fixed rate mortgages etc etc. Whilst we raise all these things and no doubt more.. the central plank of our argument to oppose forced sales to tenants must be that it is just plain wrong to force anyone to part with their possessions to a third party at the whim of that third party. The continuing attacks and vilification of private landlords is really the big issue...from which this forced sale scenario is just one more crazy offshoot. Where does it all stem from ??............well..
.....Much of all this silly stuff comes from two or three incorrect perceptions and mydia promoted myths...as follows..
Myth A..... Property prices have dramatically increased in some exponential and strange way in the U>K as a whole.....they havent. National figures even with the big distortions of the south east show a long term average of about 2.5%.....thats fact not opinion..see the big building society figs and the gov. s own O.N.S..figs and charts..all three show very very similar figures about 2.5% average.per annum for the whole of U.K average since the so called GFC up to the present time.
MYTH ..B>> First time buyers cant afford to buy..in numbers massively greater than any long term pattern. Again complete nonsense as mortgages have never ever been cheaper..and first time buyers buy with a mortgage!...one might add to this that there are dozens of 95% mortgages available including for first time buyers. That hasnt always been the case in the past...
One might also add a point C..MYTH too..because the overall rental situation here with domestic property is NOT markedly different to other similar/comparable countries. Its is also perfectly normal for house prices to rise in such countries.. and indeed in most westernised countries this is accepted as normal and indeed helpful to the respective economy as the real estate with all ts connected finance ,trades,professions ,builders,solicitor,insurers..tradies etc etc is... taken ......as a whole effect to be just about the biggest employer in any democratic westernised type society. Kill or suppress house prices and investment therein by gov. interference and you are very likely going to have a negative effect on the whole economy and also on employment levels as a whole.
Its all quite crazy that after the GOVERNMENT sold off billions of severely discounted council home years ago...and did nothing effective to prepare for the NEXT generation of inevitable renters.....corbyns team now propose to effectively repeat and greatly compound the same mistake firstly at our expense..and later again at our expense as taxpayers when the next generation of renters have no where to rent. All taxpayers will end up paying for that one way or another to solve it. HIstory repeats because people dont bother to consider it !...and also because they act upon myths and misunderstandings rather than reality.
Whatever our personal circumstances as both landlords and decent people we should resist any such draconian government interference in our investments such as forced sale arrangements to tenants and fight for our liberty to control our assets as the rightful owners. To condone it or be seen to condone any part of it would be a big mistake .Its plain wrong in every respect.... Read More

We should take the hung parliament as a positive.... from the result.. May and her cronies have alienated a lot of traditional tory voters ( including hundreds of thousands of landlords )...they have had numerous u- turns and silly socialist populist type policies..eg...they promised no tax rises and actually invented a completely new one in a tax based on a cost ( Cl 24)..they tried to raise national ins. tax for self employed etc etc. and various other nonsense. Both May and towards his end..cameron.. made the major error of trying to focus more on gaining new supporters with socialist type policies. They failed in that and at the same time forced many of traditional tory voters to abandon them...We should encourage them to take due note and get back to supporting business..especially small enterprises including landlords. They needed a big slap for their arrogance and foolishness and theyve finally got one.
Maybe they will be now a little more inclined to listen to us and other investors and business people. May is no leader and her conceptual thinking around politics and the electorate has not been good since she moved to No10. .She has now made a number of major blunders with this election being the last and biggest. Hopefully the conservative party will perhaps now wake up and remember that they need to support business and investment with real policy not rhetoric and increased taxes and interference as they have been doing.. In the long term its a good result for us.... Read More

The problem with any one sided "list" such as the one the Mayor is creating is it will have the effect of painting a bad picture of landlords and cant show anything negative on any of the hundreds of thousands of tenants that miss paying rents...or any of the other problems they
can create..such as damage......stealing ...dirt and mess etc etc. which just about all of us have seen occur at some time or other.The media will only report from that list of course. In fact there are almost very certainly more rogue tenants than landlords..and probably certain stats. ( bonds ? ) that would support that...certainly stats on offending and social income type- groups or similar would raise the very strong probability that ratios of law breaking are higher by tenants than landlords. The mayor would of course hate that statement....he would see his
new landlords list as the truth..and justify it as such....but he wouldnt like to handle the real truth! .... Most landlords have never had legal action taken against them by a tenant...but very many of us have had to take legal actions against tenants...often several times...and with
eventual court findings generally in the favour of landlords...and we dont generally bother where amounts are relatively small.
Once again landlords are effectively discriminated against... with this mayors list.. without any balance whatsoever. Perhaps we should ask him if he would support such a problem based list..identifying rogues in any other single section of the community.??...without any opposite to give a balance view. Seems landlords are a minority so its ok to prevent one sided information against them..( mmhh where have we heard that before ! )...one..cant discriminate on gender, age, faith or race..marriage..sexuality.etc etc but landlords ..yep no problem. >>>>He cant ethically or morally speak out or resist discrimination against minority groups whilst creating a one sided list such as this...when he would not tolerate let alone create such an index in any of those spheres.<<<<<<< If anyone creates a list relating to any of those areas hes in a tough spot... got himself nicely hooked up..on his own moral maze. His own prejudice against landlords would appear to have clouded his judgement. Can someone ask him how hed feel about the creation of a rogue tenants list and for him to also explain/rationalise his probable contrary positions.... Read More

REPLY ON MYTH OF HOUSE PRICES SOARING ETC..UPDATE REPLY I RECEIVED.. FROM O>N>S
The office of National Stats. have replied to my comments as outlined in the lead article i put together above.
Not the easiest reply to understand or summarise I have to say...bottom line..I dont think from their reply... that their data truly reflects the "over time" effect of significant and typical improvement to properties as they are re sold over the years. There is certainly nothing in it that would appear to capture internal improvements and additions.
They do make a comment that "houses are not traded" often?? which basically misses the point completely that a house re sold some years down the track is very likely to have been improved... a markedly more likely scenario than denuded value. Eg ( note only by illustration) the average 1940s terrace home will be hugely improved in many ways from its original features. Indeed a simple upgrade such as double glazing would ..twenty years after first sold probably exceed the original purchase price. OR.. If you prefer something over a shorter period>> a 10k kitchen on a cheap four year old house ..will also maybe effectively double its apparent "growth" price if then re sold.
I remain convinced that house prices achieved are very significantly affected in terms of GROWTH calculations ..over time ..by improvements to properties..which are constantly being fed into the figures on hundreds of thousands of sales each year. ...and given the small fractions involved in true growth and the significant value added by improvements and upgrades the figures are not showing true organic growth.They significantly over exaggerate the apparent growth to the upside.They will continue to do so until a better method is used ( incorporating full allowance for improvements..by some sort of typical formula figure )...and this goes along way to explain how each subsequent generation seems to have house price growth significantly in front of other economic indicators. That cant be both real and sustained in the way it broadly appears to have been.... Read More

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The point was to get this lot to change the policy ie Cl 24.. Their policy.Not to swap them for a different party.......and to do so by amongst other things ..telling them that we would not vote for them...and that the clause is in conflict with their stated claims around both supporting business and investment and NOT raising income tax.... Read More

REPLY to Mike Barnes....Mike in just about all my posts I have taken care regarding London...and described London as an exception . In fact i have several times highlighted it as distorting the national figures.... all my references to house prices and their reporting where "biggest picture"...not London...or any other "hotspot"...large or small.
I believe the greater London population is about 10.5 Millions of people and we have fifty million elsewhere. My references to "soaring" and its absurdity as a descriptive were regarding the national picture. I stand on...the U.K overall.. does not have anything remotely approaching soaring house prices.We need to squash that myth.
It does us great harm because it has such a bearing on bad attitudes and beliefs towards us landlords as a group.
Going back to your own analysis of London if you think your 10% figure for that great city equates to "soaring"...fine..thats perhaps a little stretch of the word even there maybe..but then we do live in a world of rather inflated terminology...as I say my comments were as to the overall big picture where it really is completely O>T>T and i did specifically indicate London as different ..eg.see para third from bottom in my article above.... which initiated these threads. London may also possibly have some sharp falls..maybe also to the larger side?...so over time whilst showing some strong gains..and often THE strongest... it might also have ,perhaps, quite a bit of volatility. I would certainly see it as a somewhat different market to the great majority of the rest of the U.K. and I dont suppose many would argue with that. Its so different in fact that given factors around investment there and existing price levels there it should always be taken aside and presented on its own... alongside but not in national figures. That would help understandings all around and maybe lead to less likelihood of inappropriate policy..such as Clause 24... and inflated terminology in comment and responses from London centric MPs..London centric policy drafters and London centric media.
Actually I really like London and Londoners...just think there is really an effect on these three groups of being located in, and constantly experiencing, a property situation there which is so often so different from so much of the rest of the UK.... Read More

Ref Mike Barnes calculations....the figs youve actually come up with mike..very low single digit %s...per anum actually endorse my point that true house price growth is very low typically per anum.. I think you are right....it is a tiny amount in percentage terms.
I didnt say ALL the growth was by improvements to properties.....I said its has to distort the figures upwards and does so every year whether overall prices paid move positively or negatively...and that will continue and the hype and nonsense will continue as long as "improvements" to homes are not taken out when calculating price growth. Thats not the only probable distortion by the way. The key fact is that the leverage on organic growth by the millions of improved homes resold has to be mathematically significant when we are talking about tiny overall upward inflation across the country (as you yourself have identified in your own calculation.. it is tiny).This is important because it is largely that hype around property inflation that has led to silly government actions and the vilification of us as "greedy speculators" making fortunes from "soaring" house prices and to the detriment of others..Which is actually a myth...and for prices...."creeping on"...would be a more accurate. description.
Hence also it is necessary to have leverage by borrowing to make capital growth more significant ( if thats what one seeks )...and raise it into higher single digits....for most areas in most years.Hence also the foolishness of legislation tending to stop such investment...Clause 24 et al.
Thing is as long as the myth of ":soaring" house prices is continued we landlords are likely to suffer the consequences of this nonsense in terms of tax and other government interference and also in terms of public perception.
As far as I am aware no reduction formula around improved homes resold...has been applied by ONS or the big lenders...the sooner such a thing is done to correct the figures to something more useful and representing true growth the better. I have forwarded the apparent issue ive raised around improvements distorting the Figs. to the National Stats Office. Its not that hard to do IF there is an acceptance of the point and a willingness to factor this in and reduce the figs accordingly.. We do see an increasing realisation that the "national average" stuff is becoming increasingly irrelevant and some more sophisticated regionalisation of figs. Unfortunately the figs themselves seem to be still treated as "gospel" stuff...and go unquestioned by the media...and the population as a whole.
IF the O.N.S or the two notable building societies that do the charts and figs so often touted .. already somehow do make a reduction for improved homes... well it will be the first ive heard of it..and I will be interested to know to what extent and how its done . I will post here if and when they get back to me... and I guess until they do....and without anything too obvious on the ONS site. I tend to believe...they probably dont....we can only view the current growth figures with very considerable suspicion. Once an answer is achieved..I will post it....and if it is as expected we might want to canvas government on the issue. I doubt the former geography students working there ever considered such a notion .... Read More

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I agree Mark..Ive spent time in both Australia and New Zealand. Both countries also have a lot of small "mum and dad" property investors..especially Australia..where its somewhat of a national passion...and generally they just dont see real estate investment as a negative thing either personally or generally in the media. Also australia has had similar price rises (real) to those "alleged" here for many years and yet its not seen as some sort of big problem...oh and by the way interest rates in both those countries on mortgage products is quite a lot higher than the U.K. There does seem to be a wider appreciation that real estate and all its connected building and other trades professions and service providers.. is essential for a growth scenario in the wider economy. Both countries, I believe, also have much more generous possibilities to offset property losses against other income streams as well. Indeed id never heard of their concept of negative gearing on property prior to visiting.... Read More

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The governments responders might need to be reminded ..yet again that we pay capital gains tax..private home owning occupiers do not..therefore comparing the two is ridiculous....as they do..without taking that into account. Also on the nonsense theyve touted about buy to let not being a business...their faulty rationale should then also be applied to commercial buildings such as offices etc. plainly it isnt. I also think we need to keep hammering the point that this is a tax levied on a cost not on any form of income and is therefore. a complete reversal of all previous income tax and income accounting rationales. Whilst income tax legislation has been used to introduce and enforce it...it is actually not an income tax at all..( being based on a cost ).but something completely different..( actually a levy upon finance costs already incurred )....and as such represents a misuse and departure from all previous use of income tax law. Given that departure from normality and also deviance from reasonable revenue raising principles I still suspect there is a legal challenge route there ....somewhere.... Read More

Smaller sized rental units are an inevitable consequence of Clause 24..principally because those who remain in or enter the private rental sector and use finance.. as landlords.. will have to look at sub dividing existing properties and creating either bedsits or very small units to overcome the extreme tax on mortgage interest costs...AND of course the corporate rental businesses will want to invest in high return multiple occupancy city and city fringe apartments...with more units per building and less space per unit. Therefore the government far from helping to end the so called "generation rent"..will actually exasperate and accelerate the developing situation and and turn it into generation BEDSIT. One only has to look at high growth cities across the world to see this trend. We are already seeing the early stages here in the UK with new accommodation for working people similar to student bedsit type developments. And Its ultimate form..already existing in some places...is something like a sleep pod...even smaller than a bedsit...with communal bathrooms and kitchens.... Read More

In fact Cl 24 as an "income tax" will quite effectively actually REDUCE revenue whilst upsetting both private landlords and their tenants and families.It is aimed at driving out private leveraged landlords over several years.Market replacement will be by corporates paying MUCH less tax.Also a political mistake again attacking a core section of traditional conservative voters....and upsetting displaced tenants. All for no gain!... Read More

Well done for getting the admin fee back.I really wonder whether the charging of such fees ..admin etc .and" late" fees etc is legal anyway in some instances... Ive had acouple of run ins with building managers in a similar vein. Such as ...They demand six months in advance..then tried to charge me a similar fee to yours above for being "3 days late"..I refused to pay it...and pointed out their letter requiring payment arrived just one day before it was "due" and if i was three days late i was also five months and 27 days early! with the rest .They eventually dropped it. More recently an insurance company tried to charge me a 25 pound "admin" fee for updating my adress.( not the policy )..i told them i would cancel the policy before i would pay such a fee. They dropped it...it seems such fees and administartaive charges are a nice little earner if they can get away with it....If enough people resist they might be less inclined to stick us with these fees and charges. Good on ya for having a go.... Read More

REPLY TO MIKE BARNES
Mike youve misunderstood my point. I was saying that the whole scenario was originated by one original amount of money saved from salary or elsewhere..and invested...in a BTL property...thats why i used the word...." origin"..and went on to say that money could have been spent..in the "normal" way say on a holiday...and none of the further three..or four.. lots of taxation...stamp...rent tax.. capital gain...Clause 24 would have occurred. It seems to be forgotten by the gov. that all those tax payments arise because we choose to make one investment..and subsequently all these tax revenues arise. Far from having a tax advantage we pay several lots..all arising from one original investment.... Read More

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