Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "Kathy Evans" at "18/09/2015 - 15:26":

I just don't understand why they are so reluctant to get involved.
Of course all mortgaged LL are going to try and reduce costs if these proposals are implemented.
Probably my biggest cost is letting agent fees.
Need I say more?

http://survey.euro.confirmit.com/wix/8/p1846083658.aspx?dm_i=11G,3OF0B,U9MOT,D89K9,1

NLA SURVEY FOR LANDLORDS

Reply to the comment left by "KATHY MILLER" at "18/09/2015 - 16:16":

Hi Kathy

The NLA has sent an email inviting people to complete a different survey, specifically about the proposed change, entitled: “Help us fight the Treasury”: http://www.landlords.org.uk/news-campaigns/news/help-us-fight-the-treasury

It is open to non-members as well, so the more the merrier.

Towards the end it asks what message you would like to pass on to the government and the media, among others. It would be a good idea if participants prepared their answers to this before starting the survey. There is a lot of space for comments, as I was able to post the following:

“The proposal will have a retrospective effect, which is intrinsically unfair. It will only apply to properties held in the owners’ names rather than through a company. Why should those who started companies to avoid the higher rate of income tax be exempt from this levy?

It will be a tax on turnover, not a tax on income. Every other country in the G7 allows the finance costs of landlords to be deducted from revenue before tax is calculated. Every other enterprise in the UK will continue to deduct all of its costs.

It will become payable if the interest, when added back to your rental profit and all other income, takes you into the higher rate band. Currently this happens at £43,000.

The levy will be payable even if you have no rental profit at all due to interest and other costs equalling or exceeding rent received, if the total of interest plus all other income puts you in the higher rate band. So you would have to pay it out of savings.

This proposal has unsettled the BTL sector and so could cause another house price fall just as the economy is starting to recover and people are starting to climb out of negative equity.

In the same week that the government announced that it intended to make planning approval automatic for building on brownfield sites, the Chancellor has alienated investors. The government wants to make it easier for developers to build the houses and flats the country desperately needs. George Osborne has deterred BTL investors, who used to kick-start developments by buying off-plan. Thus developers will not be able to sell as many units, and therefore build as many, as they otherwise would, including the affordable housing that they are also forced to build as the price of planning permission.
The English Housing Survey:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/453668/Bulletin_12Aug2015_FINAL.pdf
credits the private rented sector for much of the increase in the number of dwellings between 1996 and 2013. It says “much”, but should have said “the overwhelming majority”. 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 (19% of the stock) over this period."
Thus 2.5 million out of the 3 million increase was thanks to the PRS. That is 83%.
This will slow down now, as anyone who buys in his own name now is volunteering for the levy.

The interest incurred on loans taken out to buy assets that are employed in a business is fully tax deductible from income in every other type of enterprise. Why should the provision of accommodation be treated differently? I could understand a levy being applied to an activity that he wants to deter, like the provision of tobacco or alcohol whose consumption puts a burden on the NHS. I don’t know why he would want to deter the provision of rental accommodation, already in short supply, which facilitates the mobility of labour both within the country and from outside it, to the benefit of the economy as a whole.

Conservative MP’s regurgitate the disinformation propagated by Mr Gauke of the Treasury: “By restricting finance cost relief available to the basic rate of income tax (20%) all finance costs incurred by individual landlords will be treated the same by the tax system.”
This is the opposite of the truth. Finance costs incurred by individual landlords will be treated DIFFERENTLY by the tax system. Some landlords will be unaffected, some will pay a levy on their finance costs of up to 20% and possibly lose the personal allowance, and others will pay a levy of up to 25%.
Gauke is a minister so he knows what he wrote is not true. He is blackwhiting us: https://en.wikipedia.org/wiki/List_of_Newspeak_words”

If I have missed anything, please add it when you comment.

David Peacock of Property Secrets has finally referred to the proposal in his email today, albeit obliquely:
“If you want to invest in property via buy-to-let, you will need to secure finance, research your area and discover what you need to know to become a landlord, particularly new tax rules.”
The article which this leads to was taken from What Mortgage, and gives more information about the change.
Unfortunately, neither David Peacock nor the article suggest fighting the proposal, or even mention the petition.

And last night Mark Homer of Progressive Property gave a webinar about how to get around the change. PP sent a couple of emails about it this week and another today. So the awareness of those landlords who subscribe to PS or PP should have been raised this week.

Reply to the comment left by "Roger Rabbit" at "18/09/2015 - 11:35":

Mr Rabbit, I am certain from your comments that, you are HPC enthusiast...I'm sure everyone has been enjoying your comments but I have now also joined the club.

Reply to the comment left by "Saeef Khan" at "18/09/2015 - 18:21":

You've said that multiple times and I have ignored you multiple times.

My view is a HPC is not at all likely with half a million a year population growth coupled with the lowest new build rates in fifty years.

I don't think the recent tax changes will cause prices to fall. Although some landlords will sell and some prospective landlords will not buy there remains a very large group of cash purchase landlords who buy ~120,000 net homes to rent out per year.

There are changes that can be made to shrink the rental sector and there are some risks to investing in housing but there are risks in investing in anything.

Reply to the comment left by "Simon Lever" at "18/09/2015 - 11:03":

Hi Simon

Never underestimate lethargy.

The campaign has been promoted on all the big UK landlord and Facebook groups. Most have between 5,000 and 15,000 members. I've never seen more than 100 comments on the posts. The most common comment is "signed" and that's about it. The vast majority of landlords don't believe this will happen so they aren't getting fired up about it. I still have members of my own family who take that view. They believe it is all too ridiculous ever to be allowed to go ahead. You can imagine the brow beatings they get from me but it's like flogging a dead horse sometimes.

The campaign has also been promoted on twitter - see >>> http://www.property118.com/tax-levy-campaign-tweets/

Even The Telegraph article only got 18 re-tweets!

I gave up updating that page on the basis the time wasn't worthy of the effort 🙁
.

Reply to the comment left by "Appalled Landlord" at "18/09/2015 - 17:15":

Hi

I think its the same one, I too put my views at the end.

It would be great if everyone here completed it.

I see they say 1 in 10 landlords are in a Ltd company so 9 are not!
Where are these 9?

Reply to the comment left by "Roger Rabbit" at "18/09/2015 - 18:45":

Mr Rabbit, Are you landlord? What does consumer landlord mean?

What does self assessment mean? When online self assessment is due?

If HMRC finds, mistake in your tax return, how long can they go back to check your records?

What does buy to let mortgage statement look like? What costs can you offset against your rental income?

Becoming a landlord, is it like walk in a park?

What legal responsibilities do you have by becoming a landlord?

Answer it...I'm sure you'll check it on google, but if you are landlord in real it should not take more than 5 minutes.

Reply to the comment left by "Saeef Khan" at "18/09/2015 - 19:38":

khan what do i get for answering your questioners?

If its so important to you that I prove myself make a £100 donation to a big name charity like the red cross or save the children and I can send you a screen shot of my tds account.