Summer Budget 2015 – Landlords Reactions

Hi Ros

I emailed all the MPs below with your letter slightly amended, but you need to be one of their own constituents

Finance Committee
Clerk(s): Helen Wood
Members: 11
Chair started: 21 July 2015

Appointed by the House of Commons on:
Name Party
Rt Hon Nicholas Brown MP (Chair) Labour
Jake Berry MP Conservative
Mr Clive Betts MP Labour
Geoffrey Clifton-Brown MP Conservative
Mark Garnier MP Conservative
Neil Gray MP Scottish National Party
Rt Hon Sir Alan Haselhurst MP Conservative
Rt Hon Lindsay Hoyle MP Labour
Helen Jones MP Labour
Kwasi Kwarteng MP Conservative
Karen Lumley MP Conservative

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Reply to the comment left by "Barry White" at "07/09/2015 - 17:13":

If "over leveraged" LL are a threat as they apparenlty outbid and pay crazy sums for properties (they dont as they are constrained by lending criteria, ROI and tax bills now!...then how much of a threat is a cash buying LL who doent have to answer to a lender. As well as AST prohibiting sub letting so do most BTL mortgages.

If someone cant save a deposit & cant pass lender criteria then they wont be an OO for the forseeable future, regardless of what tax levy is imposed on LL (and Tenants).

http://moneyweek.com/property-investors-beware-people-want-house-prices-to-fall/

Reply to the comment left by "Barry White" at "07/09/2015 - 17:13":

You are obviously not a landlord if you think we get relief on our interest. We don’t, we deduct it from our income as a normal business expense like every other enterprise in the UK.

Many more properties are owned by their occupiers than by landlords. It is the current owner-occupiers who have the tax advantages.

I fail to see your point about rent a room relief. The tenant would only benefit from this if the sub-tenant paid more rent for a property-share than the tenant paid to the owner for the whole property. That would be an unusual case.

Your only previous post: http://www.property118.com/budget-2015-landlords-reactions/76164/comment-page-361/#comment-63767 at 09.59 foresaw a brave new world of purpose built estates being developed at low cost on large brownfield sites by big corporates with their own shops, bars and schools (!) which would drive rents down. Are you connected to one of these big corporates?

Reply to the comment left by "Appalled Landlord" at "07/09/2015 - 18:36":

Why haven't those big corporates already built these estates? They've had the tax incentives of REIT's for a while now.
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Reply to the comment left by "Mark Alexander" at "07/09/2015 - 18:49":

Because they cant be bothered with all the aggravation and increased legislation involved in managing residential tenancies, when they know they can earn more out of hands off commercial investments.

Just passed 26,000 signatures on the petition

Hi Ros, I'm well aware of the arguments thanks. I also find it strange that you think you know how I want landlords to be taxed, when I have expressed no such inclination;
I was simply pointing out that if treasury believe btl is crowding out ftb, then jumping up and down about tax benefits of existing owner occupiers is an irrelevance; Osborne is only concerned with ftbs who can't access the owner tax benefits.

Also regarding the crowding out arguments that have been refuted many times, you need to be sure that correlation is not being mistaken for causation. It is human nature to interpret something as causation if your livelihood depends on it. What i don't believe I have seen with any of these refutations is categorical proof that the data and conclusions *aren't* merely correlation; I have only seen the assertion of causality without much discussion of data quality and shortcomings, survivorship bias etc etc

Reply to the comment left by "Appalled Landlord" at "07/09/2015 - 18:36":

You're correct, I'm not a landlord and I haven't looked at the legislation in detail to see how finance costs are being carved out to precisely target non incorporated landlords. However, it appears to me that economically in this case, deductible expense and tax relief are tantamount to the same thing; "relief" is just the marketing but it's the economic outcome that will drive the desired behaviour. Now, if this policy has been championed by the highly successful "nudge unit" (there was an FT article not so long ago on it), then landlords could be in for an even tougher time reversing it

I agree that *current* owner occupiers have tax advantages, but as stated, I don't think Osborne is concerned with current owner occupiers, only ftbs, who by definition *dont* have these advantages.

My point about rent a room relief is that it's incorrect to say it's an owner occupier benefit; legally it applies to tenants too. Nothing more, nothing less. It is however conceivable that treasury make the same point in response which will weaken the point as you backtrack on that particular point. Better to be precise from the outset.

I'm not connected with property at all (apart from living in one). It just appears to me that these large developments are the natural outcome of budget announcements, changes to brown field planning and development etc.

Reply to the comment left by "Barry White" at "07/09/2015 - 18:56":

Oh go away Barry. We're busy here.

Thanks Kathy for contacting all those people - we've had a nice bit of proactive action today. I can also add the names to my spreadsheet.

I've also written a few letters to various newspapers in my continued quest to get more journalists on board. No joy yet, but I may get a prize for perseverance.

Also, regarding the letter from the RLA - I like the word 'alternatives!'
That is a massive deal if it means what I think it does. It would be good if we could find out a bit more from the RLA. Does it mean the Government is starting to see sense? As they are now talking about incentives for us to increase housing supply and all of a sudden they're interested again in conditions in the PRS - i.e. conditions for tenants. Tenants had gone completely off their radar, in favour of the owner-occupiers the Conservatives thought would reward them with their vote. I don't want to read too much into it, but it sounds promising.

I had thought I detected movement in their response to the petition saying landlords 'may' have an advantage when the Chancellor had stated it as a matter of fact. As I say, it would be really good if someone can find out more from the RLA. They absolutely never answer my emails (maybe because I'm not a member!)