Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "Harold Levine" at "19/09/2015 - 12:47":

I'd be happy with longer tenancies if I could evict more easily for non-payment. Also if those who got HB/LHA or whatever it is this week and didn't pay their rent were prosecuted in criminal courts and the Council then paid out the lost rent to landlords (instead of encouraging non-payment as they do now) or they could give the rent directly to landlords again.

It has to be a two-way street.

If it was Rent to Buy, I'd expect a much higher rent to cover some repairs and return on investment (they'd probably do better to introduce a special savings account for tenants wishing to buy - oh, wait, they have, so why do landlords need to get involved?)

Reply to the comment left by "Kathy Evans" at "19/09/2015 - 13:06":

Yes, Kathy, I've never had any problem with the idea of longer tenancies either - as long as they can be brought to a close for non-payment of rent, abusive behaviour etc. The only time I have ever given notice is when tenants have not stuck to the tenancy agreements - usually by not paying, as I tend to put up with most other things. With this exception, it has always been tenants who have given the notice. It's another myth perpetuated by Shelter as far as my portfolio goes - the idea we are constantly issuing notices. Claptrap. Also, with all of my long-term tenants they have either had no rent increase over many years or in a few cases a £10 a month increase a few years into the tenancy when I thought I ought to be doing that and nothing since. If there was a rent cap which stated that rent increases had to be in line with inflation for instance, I'd be better off if I implemented that!

I wonder how much Corbyn has 'profiteered' from his house - i.e. what did he pay for it? The papers have reported it's now worth £600,000. (and all the other millions of owner-occupiers who have equally 'profiteered')

And yet it is considered morally superior to live in a house of this value yourself, rather than enable a stack of other people to live in houses, using the same amount of equity. I'm having trouble keeping up with why he is morally superior to me, when my home is worth less than half of his and I've still got a considerable mortgage on mine.

Reply to the comment left by "Lisa Stux" at "18/09/2015 - 23:13":

Lisa I think new borrowing has a better chance of being supported by Government than new purchases.

NLA has suggested new borrowing in its 16 page report.

Reply to the comment left by "BTL INVESTOR SCOTLAND" at "19/09/2015 - 14:50":

Hi BTL,
This would force me into selling as mortgage deals came out and others would be unable to remortgage and be stuck on expensive deals. I think the ones to benefit would be the mortgage lenders. If, on the other hand, landlords did then remortgage, they'd be stuck with the tax change liability and be paying the massive amounts of tax to the Government. Faced with this, many landlords would still be forced into selling not at a time of their own choosing.

Reply to the comment left by "Harold Levine" at "19/09/2015 - 12:47":

And where do you think the "government deposits" will come from? Taxing landlords? With the amount required to implement the legislation, there wouldn't be enough to fund this so expect YOUR tax bill to rise.

I don't need the government to care about my history, but it ought to care about landlords as their businesses strengthened the economy in two recessions and provided housing when council stock dried up. Councils were at a point of buying back (using tax payers' money further) stock they had sold with discounts in the first place! Landlords got off their backsides to get their businesses started, whilst millions in the country continued watching Jeremy Kyle.

If the government is not satisfied with my business or the fact that I got off my behind to get it going so as to be able to offer my PROFITS to be taxed, then I'll make myself a basic rate tax payer and see how much they can tax me then. It'll be nice to give up the day job anyway; who wants to work like a dog sometimes fourteen hours a day and Sundays, and still have tenants and maintenance to worry about as well? No day job, no huge amounts of tax for the government, downsize my own home so I don't have to clean for lodgers and buy loo rolls in bulk special offer packs so it looks like I have runs every few weeks. Then, if my business doesn't work out, I'll have to declare bankruptcy, so I may as well stay home and watch Jeremy Kyle - see what the attraction is to keep so many people enthralled at home - and I'll probably rent from a corporation, but that's ok because the government will foot the bill, oops, I mean the tax payer, before they give me a deposit to buy it - yippee!

I’ve received an email from another organisation, Upad, mentioning the proposed change, but not suggesting that there is anything that can be done to stop it. They have provided a Budget Mortgage Relief Calculator. This just multiplies the finance costs by 20% for those who currently pay tax at 40%, and 25% for those who pay 45%, so I have sent the following reply:

Hi

Your calculator may lull some landlords who currently only pay tax at 20% into a false sense of security. In 2020, when finance costs are disallowed, their deemed rental profit will be the real profit plus the finance costs. They will be taxed on this deemed profit, which may push them from the basic rate into the higher rate. That will make them subject to this new levy. Some will end up paying more in tax than their real profit. Others may pay tax when there is a real loss.

Alex Caravello has developed a spreadsheet that will work out an individual's tax with both today's rules and with the new rules, so that people can see exactly what the proposed change in taxation means for them. He has generously allowed it to be used by various interested groups. It can be downloaded from http://www.property118.com/budget-2015-landlords-reactions/76164/comment-page-430/#comments

Property118 is campaigning to fight the introduction of the proposed change, in tandem with other landlords who have set up a website looking at the proposal from the point of view of everybody concerned: http://saynotogeorge.co.uk/

Another landlord has set up a petition which over 29,000 have signed: https://petition.parliament.uk/petitions/104880

It is good that you have drawn the attention of your subscribers to the proposed tax change this week. It would be better if you could give them the chance to join the fight against this iniquitous levy.

Kind regards

Nice one Appalled.
Let's hope they now send out a corrected email. You'll know because if they do, obviously you should receive it.

I'm just re-posting the link you posted for the NLA survey. Just for info, I'd say people should allow maybe 20 minutes for it. I did as you said and prepared what I was going to write in the final box, towards the end when it asks about the message you'd like to give .... it lists various bodies including government. I chose to put in the information that Kathy Miller, brilliantly and incredibly usefully, found for us. Others may want to also put this in or something off the saynotogeorge site for example. There are lots of angles that we can focus on.

So here is the link again for people:

http://www.landlords.org.uk/news-campaigns/news/help-us-fight-the-treasury

'Recently, the Treasury was asked in a Freedom of Information request, how many properties (and therefore households) would be affected by the 'tax relief restriction.' The answer, astonishingly, was that they do not know (although they have suggested 1 in 5 landlords will be affected, which is a different matter). In order to help the Treasury understand the impact of its own measure I quote the following:

'The Office of the Deputy Prime Minister’s (ODPM) Private Landlords Survey, which appears in their English House Condition Survey, is the most comprehensive study of the private rental market. The survey is published every four years and the last three editions illustrate the changing structure of private rented sector ownership. The ODPM survey does suggest that there has been significant growth in the number of small scale landlords owning up to four properties. However, further analysis of this data reveals that the private rented sector is still dominated by professional landlords with large portfolios of property.

Analysis undertaken in 2010 by the Department for Communities and Local Government (DCLG) found that although 95% of landlords own fewer than five properties, this accounts for just 61% of all privately rented dwellings. At the other end of the scale, the 3% of landlords who own more than five properties account for almost a quarter (22%) of privately rented dwellings.'

One can therefore make an estimate that anything between 50 and 80% of all mortgaged rented properties in the UK will be affected - whether by increased rents (to pay for massive landlords tax bills as we are taxed on turnover and not profit), evictions in order to sell the properties (as our rental businesses become unviable) and/or repossessions, as our businesses are taxed out of existence.'

Reply to the comment left by "Ros ." at "19/09/2015 - 15:31":

I agree Ros, if it's on new borrowing rather than new purchases, it will only slightly delay the inevitable.......especially when interest rates go up.

• About a fifth (19%) of all dwellings were let to tenants in receipt of
Housing Benefit or Local Housing Allowance. Companies were slightly
more likely (23%) than other landlord types to be letting to this group.
New landlords (14%) were less likely to rent to this group than longerterm
landlords (Annex Table 5.5).
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/7249/2010380.pdf