Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "Manchester Landlord" at "07/10/2015 - 08:24":

I think Housing Associations are regulated by the HCA - you may wish to read this -

https://www.gov.uk/government/organisations/homes-and-communities-agency/about

Reply to the comment left by "Mark Brown" at "07/10/2015 - 08:27":

Yes agree

Reply to the comment left by "Trendo " at "07/10/2015 - 03:02":

B & B would not have an AST and you can provide breakfast cereal and bread. The tenant would be short term normally.

I would provide serviced apartments.

Reply to the comment left by "KATHY MILLER" at "07/10/2015 - 10:01":

Many good questions Kathy.
My take (based on various bits of data, some of which I believe is out of date but near the mark):-
- The Gov sees us as a Cottage Industry evidenced by...
- 92% of the individual LL sector being part time
- 81% own one property or less
- 95% of new LL's only own 1 property
- 22% used to live in the property eg accidental LL's
- 10% see their BTL as a future home for a relative
- 76% see this as their savings/pension & therefore begs the question why they should get an unfair advantage over other forms of savings towards retirement when even tax relief on pensions contributions are restricted
- 26% expect to leave the sector in the next 5 years & 52% owning 66% of the PRS stock expect to leave the sector in the next 10 years (these figures are likely to increase once they get their head round clause 24)
- 30% of individual LL's have been LL's for 11yrs or more but own...
- mostly older properties built pre 1970 of which....
- 39% do not meet the H&S Rating System or Repair & Maintenance Criteria
- 63% of individual LL's have little or no experience & only....
- 6% are members of relevant professional bodies
There's more data but the above coupled with UKplc's needs:-
- to increase housing supply through Build to Rent which in itself will work better than imposing rent controls especially as the Gov does not wish to drive away institutional investment
- to provide tenants the flexibility of tenure from Assured Shorthold Tenancies to Assured Tenancies of 5 years or more, with a greater certainty over rent increases
- to raise standards/security/certainty for tenants through the PRS Housing Guarantee initiative
- to continue to raise standards of tenanted property by imposing minimum standards on the private LL sector & that Build to Rent accommodation must be built to a high standard/spec
- the above will create employment opportunities not less over the next 15 years or so
In summary, based on the needs of the Nation for more housing & Gov coffers that need balancing, I actually do understand why this is happening & see sense in it all ie Clause 24 will encourage anywhere up to 81% of the LL community to sell up their one property over the next 2-5 years & encourage others to sell X% of their portfolio in order to reduce their level of borrowing & those left will be full time LL's & those that have property as a secondary income but who are already managing their tenancies fairly & maintaining their properties to a good standard, at which point the tax inequity imposed by Clause 24 "may be" revised if we are then no longer seen as a cottage industry.
My only concern is for those LL's who are caught in the trap of not being able to downsize their portfolio over the next few years without incurring high CGT liabilities which will likely prove greater than the net equity sale proceeds due to high gearing & will defeat the object of the exercise as there will be no net proceeds left to reduce the mortgage balances owed on the balance of their portfolio. Worse still is if they sell the lot or do nothing, they could go bankrupt. This needs to be addressed.

Reply to the comment left by "Laura Delow" at "07/10/2015 - 13:20":

Laura I 89% love all of that but the last line "This need to be addressed" has 100% put a smile on my face.........No S*** Sherlock! Thats why were are here!

Haha!!!! Apologies but at least I made you smile! I know it seems I am stating the obvious but what I mean is; I do not disagree with Clause 24. Like you (I think) I just disagree with the fact there seems to be no regard for some LL's caught in this so called trap of paying more tax than profit made and/or if they sell, having to pay CGT + sale costs then are greater than their net equity proceeds. Therefore, if GO sees we're not fighting the Clause as such but instead we're fighting how better to phase this in for these LL's then may be he might listen.

Reply to the comment left by "Laura Delow" at "07/10/2015 - 13:20":

Hi Laura

2 weeks after the summer budget Osborne said he wanted to encourage small landlords:

http://www.dailymail.co.uk/news/article-3170154/Bank-crack-risky-buy-let-mortgages-warns-Osborne-Ministers-hand-powers-limit-lending-landlords.html

“Mr Osborne told the [Treasury select] committee the Bank was supposed to ‘identify bubbles and risks in the financial system’, and had recently named the buy-to-let sector as one of them. But he said he did not want to stop small-time landlords from investing in property, saying: ‘There are many people who have saved hard throughout their lives to buy a little property and rent it out. Those are people we absolutely want to support and help. But I think there are concerns we have to address.’

It seems Michael Gove is an advocate for landlords.

He has just been on 5Live at the Tory conference and he said that buy to let landlords need to be able to make sufficient profit in order to encourage investment in the sector.

I don't think he is even aware of what clause 24 means.

He is most certainly a candidate for PM next election - could be worth educating?

Reply to the comment left by "Manchester Landlord" at "07/10/2015 - 13:53":

Well spotted ML. I shall write to him now. This is the email address, everyone, obviously put it for his attention:
general.queries@justice.gsi.gov.uk

Reply to the comment left by "Appalled Landlord" at "07/10/2015 - 13:47":

I saw this article too. The key bit for me was ....."But I think there are concerns we have to address".