Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "BTL INVESTOR SCOTLAND" at "11/09/2015 - 19:12":

Hi BTL I S

The English Housing Survey on a government website:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/453668/Bulletin_12Aug2015_FINAL.pdf

credits the private rented sector for the overwhelming majority of the increase in the number of dwellings between 1996 and 2013, at the foot of page 1. It reads:

"From 1996 to 2013, the total number of dwellings in England increased steadily from 20.3 million in 1996 to 23.3 million in 2013. Much of this was due to the notable growth in private rented housing which more than doubled in size from 2.0 million to 4.5 million over this period."

Thus 2.5 million out of the 3 million increase was thanks to the PRS. That is 83%.

Much of this comprised new flats built on brownfield sites in places like Liverpool and Manchester, and probably most cities in the UK, financed by landlords buying in their own names. The proposed tax change will deter such people from continuing to do so. It has probably already had this effect.

The best reply for the SAL and RLA to HM Treasury’s request for “proposals that help support the UK government’s objective to increase housing supply” would be to emphasise the above statistics, and suggest that the Treasury quietly drop the naïve socialist measure that was stolen from a very green party’s manifesto.

Reply to the comment left by "Ros ." at "11/09/2015 - 15:21":

Thank you Ros.

I went and met the MP. It was amazing the MP had no clue on any of it. I got the " you are making this all up" eyes and head nodding routine - you know the look you get when people think you can't be understanding the proposal correctly

No idea on the impact or consequences, scale or decimation of my business and was reading from a letter from the Minister with policy responsibility - telling me that I still get full relief of "this and that" but did not comprehend that there would be be no money left for "this and that" after I have paid the tax due.

The MP did say that we, as landlords, are crap at lobbying and if we had any chance of success or influence then we need to get batter at lobbying, have a Facebook page and be more vocal / get more press / make more people aware. She is right because she did not know about it in reality and she should know by now if we were any good at making a noise.

I need to meet up with people and start making a difference and getting tangible plans and actions going how do we make that happen?

Reply to the comment left by "BTL INVESTOR SCOTLAND" at "11/09/2015 - 19:12":

Hi BTL.
I have emailed them and said I would like to take part. Not sure if they'll let me as I'm in Wales, but it's worth a try. The more of us who can get the right message across the better.

Hi Appalled.
I'm not sure they see this statistic the way we see it. They probably interpret it as 3 million houses/flats were built and landlords robbed 2.5 million from under the noses of first time buyers... I wonder if there's any way of showing that it was landlords who commissioned the builds (or the vast majority), paid the deposits before they were built and so on. Graham Chilvers in the Telegraph article was a good example of how it worked, when he created 13 homes out of an old hotel.

Reply to the comment left by "BTL INVESTOR SCOTLAND" at "11/09/2015 - 19:26":

This will be tantalisinligly interesting, when they get to realise that, this could potentially backfire on them.

Reply to the comment left by "Ros ." at "11/09/2015 - 21:43":

Developers particularly smaller developers rely on pre-sales to enable a project, they don't go to the bank and ask for millions of pounds to get a development out of the ground and they don't keep those kind of funds sitting in the bank. Developers look for the lowest cost finance possible. So without pre-sales to the likes of buy to let businesses and ready to go owner occupiers handing over their deposits, the development simply won't happen.
Once the development is underway then there is something physical to see more of the general public are aware of the schemes. By that time the cream of the lower cost dwellings have already been sold.
Perhaps the government should be educating first time buyers into contacting developers to ask about upcoming developments and the opportunities for pre-sales. However its likely that many will still fall short of having ready finance due to the strict lending rules. At least then owner occupiers can stop pinning the lack of supply of new builds on landlords.
And the argument of more affordable homes being built, on developments I have worked on, affordable means homes specifically built to much stricter space standards (more generous) for sale at a reduced profit to housing associations, private landlords don't get a look in. Just about every council across the country has a requirement for affordable housing in developments over a certain size, this coupled with Section 106 or CIL has stifled more than one smaller scale development over the years by taking away the profit. So unless they are developed and sold at inflated prices then the developer makes insufficient money to want to take the risk and we get into the situation of not having enough homes.

Reply to the comment left by "Mark Brown" at "11/09/2015 - 20:54":

Hi Mark.
Yes, we have been trying our best to get the message out there - I write to newspapers several times a week, targetting particular journalists and we at Property118 got Richard Dyson to start the Telegraph campaign, we were also massively behind the petition and were the ones who gave and continue to give it the greatest push. The RLA were slow to come on board with the petition (I spent weeks trying to persuade them to start one, we then decided we would get on with it, and Ruhal got in there just before we did). We've all been doing our best, but we are not lobbyists, like the national organisations - we've been learning as we go along.
I still think writing to MPs repeatedly and to the newspapers are two of the most important tactics. Also to any other groups anyone can think of. We've also sent in submissions to the Public Committee on the Finance Bill. Basically, if anyone has a good idea they should implement it. One of the great things on this site is that we are free spirits and no-one is 'in charge' so to speak. We report back here what we've done and reports we've found that we can use in letters etc. Your MP may think we're crap at lobbying, but we have to do all this in the face of a tide of anti-landlord prejudice whipped up by the likes of Shelter and now also GO has fanned the flames.
I wasn't sure what the final outcome was with your MP - and is she Labour, Conservative or from another party? As you were rushed into going to see her, you might want to send a letter to thank her for seeing you and then give her more information. I think the Telegraph article - 'the death of buy-to-let' and the 'saynotogeorge' websites are very clear. But there are a lot of articles on here too - such as 'A Level Playing Field between Homeowners and Landlords.'

Hi Darren. Thanks for the info.

Getting those rent increases in early - and shouting about it in the papers of course - is Fergus Wilson

http://www.theguardian.com/money/2015/sep/12/fergus-wilson-rent-rise-property-kent-maidstone#comment-59287146

if the market will stand it, he is right to increase rents of course

I wonder if has sufficient pricing power (based on the size and concentration of his portfolio) to make it stick?

Do other landlords have the same influence over the areas in which they operate - is it an option to many?

And, he earns a point from me in the master of understatement competition with his musings on Chinese investors: " Chinese investors are not in the abundance of previous months, for obvious reasons.@

Reply to the comment left by "Jon Pipllman" at "12/09/2015 - 09:15":

Hmmm ...point of order.. In any business arrangement, if the cost of raw materials, manufacturing costs, delivery of service costs or wages is increased then this will clearly get reflected in the final price to the consumer.

All LL who are up to date with this situation need to be looking very closely at maxing out properties as well as simple rent increases. I am increasing mine as i sign / resign each new tenant.

I also agree that foreign tenants tend to be prepared to pay more, i have quite a few foreign students ...should i be congratulated on bringing more money into the economy from outside the uk or battered into submission so a big company can build a huge resi block, call me cynical ...but if they operate as starbucks and amazon do, then most of that money will leave the UK largely untaxed.

Fine plan George !

At the other end of the scale i also have several houses let to the government through a third party agent for asylum seekers. These are let at well below market rates - unfortunately George you force my hand , these are no longer viable so you will have to make alternative arrangements for >20 more people.

So is it Fergus, or George who is increasing rents ?

David Budworth published his article today in the Times - I read it in my coffee shop and don't know how to put a link to it here - if anyone can, that would be helpful.
It covered some of the issues and may raise awareness a bit more among Times readers. It was a bit dry though - and didn't have the powerful wording of Richard Dyson's articles. It all helps though.

Also in the news today:
The challenger banks who met with the Treasury this week have warned 'this is not over' and vowed to fight on against the 'change to a tax on profits.' We face the far more outrageous tax on turnover and the NLA rolls over... (but we don't)

Also:
'Activity in the construction sector slumped in July.' I wonder if we can prove this to be related to the tax grab (if it is)?

Also in the Times:
'Housing association chiefs have had big pay rises in the past 12 months and one now earns almost £500,000 a year.'

That's 10 times what I get from my property portfolio -pre-tax (and I'm getting the most I ever have done, temporarily while interest rates are low). And I am shoved into George Osborne's category of 'the wealthiest landlords,' because I pay a lot of mortgage interest.

As the Times article points out, these massive salaries - others get £300,000 plus and the chief execs of the biggest 100 housing associations were paid an average of £182,780 in 2014-2015 - are 'funded by the taxpayer and tenants.' There must be many other senior members of staff in these organisations whose salaries vastly outstrip those of landlords.

Where's the furore about that? Housing associations' work is broadly similar to the work of the portfolio landlord who operate in certain areas and they're not in the pages of the newspapers all the time for the 'atrocious standards' and 'the mould' etc. It's as though housing association homes are marvellous and don't have any maintenance issues and if they do they are resolved instantly.... And the staff are not in it for the money (the salary) whilst landlords are profiteers.

Mind, with GO's 'Right to Buy,' for 1.3 million tenants, maybe they'll all be out of a job soon, since they're scarcely building anything. Apparently GO told them off about this yesterday.