Summer Budget 2015 – Landlords Reactions

The message is getting through yesterday in the Lords debate on the Finance Bill, Lord Flight said:

“I have some criticisms of this Bill. To me, there is too much stealth tax in it, and I feel that Gordon Brown would have been rather proud of it. Indeed, it rather smacks of quite a lot of the type of thing that he used to get up to. Hidden within it, the middle classes, whom I still stand up for, are having their tax bills increased by something approaching £20 billion, but in a way that the Government hope they will not realise………………….”

“Even on buy to let there is a misunderstanding. Before pensions, people used to buy one or two houses, if they could, and let them out. That was their source of income in old age. Those were the people who owned and financed a lot of the Victorian terraces all over south Wales, as well as London. The generation now in their 40s has often gone down the route of buying houses to let rather than using pension schemes—for rather good reasons, because as an asset, houses have performed better. The only tax incentive for that has been the ability to off-set interest. I am not sure how wise these measures will be. Without buy to let, lots of people would have had nowhere to live in the past few years. I certainly do not agree with retrospective taxation. We can change the tax laws for new purchases, but it is unwise to change tax arrangements retrospectively. I can just see what will happen: a time will come when inflation and interest rates rise, and the housing market goes down. Then there will be problems.”

Reply to the comment left by "Barry Fitzpatrick" at "11/11/2015 - 12:39":

Very positive that for new purchases that would take away the stress we are allowing through

Reply to the comment left by "Barry Fitzpatrick" at "11/11/2015 - 12:39":

Howard Flight Politician
Howard Emerson Flight, Baron Flight is a Conservative politician in the United Kingdom and a member of the House of Lords who was Member of Parliament for Arundel and South Downs from 1997 to 2005. Wikiped

Reply to the comment left by "Barry Fitzpatrick" at "11/11/2015 - 12:39":

I have just drafted an angry response to Lord Davies of Oldham's comments which were the usual claptrap.

Could others send some nice emails to Lord Flight for being a lone voice speaking up for us? (I haven't read the debate but presume he was the only one)

I just heard on the Sky Press Preview that the marvellous Stephen McPartland, MP for the marginal (I think they said) seat of Stevenage snubbed David Gauke during a visit to the constituency today. They said it was because of the tax credits issue, but we know that Stephen McPartland also understands the idiocy of C24.

I have just sent this to Lord Flight ... ref Clause 24 of Finance Bill

Dear Lord Flight

I, along with several of my colleagues in the Private Rental sector (PRS) were encouraged when you spoke in the house recently to raise concerns about this clause, at the second reading of the bill.

As you have probably realised this Clause seeks to tax landlords on their rental turnover, as opposed to their true profit, as is normal with most taxation. As a result, many low-income landlords will artificially be pushed into higher rate tax bands, even to the point of losing CSA payments, tax credits, and the personal allowance, while their true income (profit) has not actually increased at all, as their mortgage interest still needs to be paid. Wealthiest landlords with no borrowing, or those operating within a Ltd structure will be unaffected, which is grossly unfair.

In some cases the new tax will result in landlords paying at rates of over 100% tax on their true profit, resulting in bankruptcies, massed sales of rental properties, mass eviction of tenants and increased homelessness, which then leads to an even greater burden on an already over-stretched local housing system.

I would respectfully urge you to continue to raise questions and try to reverse this Clause, as it will be ruinous for the PRS, affecting tenants even more so than landlords. If the measure were to be applied to new lending or new purchases only, from 2020 onwards for example, this would achieve the government’s avowed aim of helping first-time-buyers, but would not retrospectively tax the sector into oblivion which is what is currently going to happen.

Reply to the comment left by "Ian Simpson" at "12/11/2015 - 05:59":

Hi could you get me lord flights contact details please

Question

In your area is it first time buyers that buy the flats.?

In my area FTB are going for 2 and 3 bed houses at around 185-200,000. They are competing with 2nd homebuyers moving up

Speaking with an estate agent she said they cannot shift the flats FTB dont want them.

When I asked why , her reply was that as they are older they want a place which they can settle in and grow into.This was due to moving costs.
But I wonder if its due to the government schemes allowing them to borrow more.

THOUGHTS PLEASE

Reply to the comment left by "KATHY MILLER" at "12/11/2015 - 09:07":

Question

In your area is it first time buyers that buy the flats.?

In my area FTB are going for 2 and 3 bed houses at around 185-200,000. They are competing with 2nd homebuyers moving up

Speaking with an estate agent she said they cannot shift the flats FTB dont want them.

When I asked why , her reply was that as they are older they want a place which they can settle in and grow into.This was due to moving costs.
But I wonder if its due to the government schemes allowing them to borrow more.

THOUGHTS PLEASE

If this is true in other parts and investors stop buying what happens to the flats?

Reply to the comment left by "KATHY MILLER" at "12/11/2015 - 09:07":

I think you're quite right Kathy. My daughter, aged 32 with partner , a 4 year old and another baby due in January, has just bought her first home (in the Thames Valley).

It's a 3 bed, costing £500,000!!!. They could only do it with help to buy. However, she has said in the past that she has lost out on properties because cash buyers have outbid her...they could have been BTLers, but not necessarily. They have been trying to buy for about 5 years, but never looked at a flat.

As you say, this is probably because they are older, have a family, and want a longer term home.

The other end of the spectrum though, is in Bournemouth , which has a huge number of flats. They are being rented by young European families. They are used to taking buggies and shopping in and out of lifts....they like flats...they don't want gardens.