Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "Ros ." at "28/11/2015 - 13:58":

It says on the Guardian website that any member of staff can be contacted by inserting their names into the below e-mail layout:

Firstname.lastname@theguardian.com

Thanks Gareth.

Reply to the comment left by "Ros ." at "28/11/2015 - 13:35":

Ros,

Open an "incognito" or "private" window in your browser and you get 20 more page views (closing this and re-opening get another 20 as well, ad infinitum).

Reply to the comment left by "Ros ." at "28/11/2015 - 14:06":

This is not dissimilar to the agency nurse industry, when I heard a representative of one agency basically saying he would not supply agency nurses to the NHS because of the vilification/exploitative comments being made by the Government.

Any sleepy Landlord pulling his head out of the sand and bringing stale rental levels upto date, or even improving a property to acheive market rent is not performing "retaliatory rent increases" , neither are they going to charge above market rents - if revised rents are accepted then they are "market rents".

Any Landlord taking the fairly astute position of servicing a slightly different and higher rent market sector ie. prof instead of social tenants, or HMO instead of single units is also not performing "retaliatory rent increases".

The goalposts have been moved , so unsurprisingly the direction of the ball we kick will have to move as well.

For serious players this is all actually good news, the amatuers will drop out, the supply will fall, the demand will continue to grow, rents WILL certainly rise. Prof LL will run far more efficient enterprises - several LL i know seriously believe they will be doubling their profits after restructuring, investing in and maxing their current portfolios.
There will be many opportunities to explore over the next few years.

Expect to see prop adverts with "stamp duty inc in price" !!!

Other than little localised pockets of possible temp price dips - there is no HPC on the horizon (subject to any further moves in goalposts!)

Reply to the comment left by "Trendo " at "28/11/2015 - 15:55":

Re: HPC - why would there be one ? ...apparently there is an army of FTB waiting in the wings to do battle with each other on the "level playing field" and buy up all the property they have been denied for so long - i wonder if they may outbid each other and drive the prices up rather than down ? ...up well past where any BTL LL will go due to their new tax/sdlt considerations affecting ROI !!

In the HMO world i see bargains to come as overleveraged LL offload (FTB wont be interested in these).

Student HMO props have ever increasing demand

Private family lets have growing demand

Private flats wether to families or sharers have growing demand

The estates full of HB tenants could get a bit messy as LL will struggle to offload and have LHA rent levels dropped - the demand is growing for these as well. Unfortunately these props cut off far too many options IMO they were never a good bet hence i havent got any.

But if HB is the only available market for a property then i would be looking at converting to HMO, getting planning for extended accom/granny flats/garage or tarting and offloading.

BTL is far from dead ! Of the 23.4 million homes (or households) in England and Wales on census day in March 2011, 15 million (64 per cent) were owner occupied and 8.3 million (36 per cent) were rented.

http://www.ons.gov.uk/ons/rel/census/2011-census/detailed-characteristics-on-housing-for-local-authorities-in-england-and-wales/short-story-on-detailed-characteristics.html

From reading various forums and group pages, it is abundantly clear that LL are taking action to consolidate their positions immediately - with thousands of asylum seekers and social tenants about to be or already been given notice - GO needs to come up with something fairly quickly to address what we all know is about to happen.

I'm about to send off a letter in reply to the Guardian article. Any suggestions for any changes?

Dear Patrick.

According to your article on buy-to-let, apparently, we landlords are now ‘threatening retaliatory rent rises.’ If, by that, you mean that we are going to charge as much as we possibly can to keep our housing provision intact in the face of persistent Governmental attacks on it, then we are doing just what any business would do. It strikes me as inflammatory to call this 'retaliatory,' evoking comparisons with so-called 'retaliatory eviction' (I have often been guilty of retaliatory eviction if this includes asking people to leave because they are not paying the rent and are trashing the house. Another expression one could use to describe it would be 'common sense', because how the hell am I supposed to pay my mortgage when the tenant does not pay the rent? Housing Associations and councils also evict, but no-one seems at all concerned about anything they do. It's always the 'private landlords'). Contrary to assumptions, we do not have a bottomless pit of savings to indefinitely pay to house people when we have no actual income. Are you suggesting we would be immoral to increase rents to try and stop our businesses from going bankrupt?

Have you any idea of the impact of Clause 24 is going to have on landlords with large portfolios and large amounts of mortgage interest to pay - a cost which will now be taxed as though money given out to a third party is still in our bank account? If interest rates rise by 3% at any point, I will have an actual income of £1, but a deemed income of £90,000. According to the new tax regime, my fictitious income will make me a higher rate taxpayer and I will be taxed around £10,000 on my £1 profit. If interest rates go a fraction higher than that, I will have an infinite tax rate, as I will be taxed on a loss. Do you think this is fair? If so, why does it only apply to private landlords with mortgages?

Of course at the same time that I am paying this tax (God knows from where as I will have no actual profit - I will have to maybe try and pay with Monopoly money) I will at the same time be obliged by the law to ensure all my houses are fabulously run, with licences, excellent conditions and so on - if not, I will be deemed to be a 'rogue' or 'scum.' I have just had a thank you text from a new tenant who reported a possible problem with a microwave early yesterday and I had a new one in place by yesterday afternoon. That won't be happening when I have no money.

Do you think all these attacks on landlords are going to be good for tenants and make for a well-run and harmonious private rented sector? Landlords are in a symbiotic relationship and most of us get on extremely well with our tenants. All this presentation of some awful fraught sector is fiction and has led to this ridiculous onslaught against landlords, perpetrated by the Tories, with Labour MPs cheering them on and trying to push it even further. It's pathetic and it's ugly. Scapegoating at its worst.

I am sure if you are still reading this, that you will not believe me when I say that many of us have kept our rents low for years because we are not money-grabbing and were happy to let things tick over. Obviously this is now going to stop. What would you do if your actual income was, say, £50,000 and you were told all your expenses would now be added onto your income and constitute your 'profit' on which you would be taxed? So maybe you employ an assistant, and their £20,000 salary would now be added, along with all your other expenses, so you might have a new, 'deemed' or 'fictitious' income of £100,000, on which you would pay tax at 40%? You'd think it was bonkers if it applied to you, wouldn't you? Well, maybe you can reach within and empathise just for one minute with us - the awful, evil landlords, and try and experience vicariously what that feels like? It feels like persecution; that's what it feels like.

For you to now coin the phrase 'retaliatory rent rises' is unbelievable. What options do you think we have? Many of our tenants would choose to pay more I think, in areas of high demand, as what choices will they have if private landlords with large portfolios go under as a result of the fictitious income regime?

I am aware that it is a near-impossible task to ever change anyone's mind on anything, but I think you need to think this thing through and not add your voice to this increasing hysteria against the landlords of this country. We provide housing - we're not out at night, strangling kittens.

Yours sincerely

Reply to the comment left by "Ros ." at "28/11/2015 - 17:19":

That... was... Amazing.

I think that combination of details regarding the upkeep of your properties and the relationship with your tenants, combined with the mathematics of your tax bill makes the mail really hit home.

You could say something along the lines of: I've been choosing all this time to keep my rents unchanged and encourage my tenants to stay for as long as possible. But now Clause 24 is removing that choice to the detriment of my tenants and myself.

Reply to the comment left by "Ros ." at "28/11/2015 - 17:19":

Excellent letter Ros. I love the strangling kittens ending : )

I have had an idea about getting legal advice - which we seem to be lacking here. As previously mentioned, two carers have just won a case against Iain Duncan Smith, Secretary of State for Work and Pensions, for discrimination: http://www.theguardian.com/society/2015/nov/26/iain-duncan-smith-unlawfully-dicriminated-against-the-disabled-rules-judge which shows that it is possible to mount a legal challenge against a Government department, if a measure introduced is deemed to be unfair / discriminatory and, therefore, maybe possible in our case.

How about a well worded email / letter to Cherie Booth QC asking her advice - initially, if it is worth exploring as an option. Reasons for asking Cherie?

1. She is probably not a fan of the Conservative Party
2. She has a sizeable property portfolio (which has mortgages, and although the business may be incorporated, it shouldn't prevent her from letting us know if a challenge is possible) http://www.dailymail.co.uk/news/article-2664211/Now-Blairs-nab-No10-1-2m-The-tenth-home-30m-property-empire-joined-3-6m-home-bought-son-Euan.html
3. She specialises in discrimination and human rights
http://cherieblair.org/qc/

Ros - delete your cookies and you can start all over again.

We need to balance out the extremely negative (and frankly illogical) opinions being posted underneath that article.