Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "Chris Cooper" at "05/12/2015 - 17:40":

I think what would be great is if one or two tenants could be brought into the segment to add an extra human dimension, as the figures alone might make the viewers glaze over and retort with the usual ill-informed "oh boo-hoo, the poor little landlord needs to pay their taxes" type mockery.

So if say, people could see the home of Mr & Mrs Smith who've been renting from Mr & Mrs Jones for so many years, and look to have a friendly bond with their landlords, it might focus public minds on the issue a little more, as well as combat the myth of tenants and landlords being ever at odds with one another, while in direct competition for money and living space. Then the report can present figures from this Mr & Mrs Smith angle: they are currently paying £x in rent, but as a result of Clause 24 they will eventually be paying £y in rent. Then after that the segment could focus more on the landlord's perspective (your financial position, the possibility of sales and evictions etc) and the viewers will be able to relate that back in their minds to the tenants they saw happily living in the property before, becoming concerned for them in consequence.

Reply to the comment left by "Ros ." at "05/12/2015 - 16:43":

Ros I think a 'problem' we have here is that we have a lot of individuals from very different and diverse backgrounds looking in on this website. If you want to convey a message keep it honest throughout. I fit the criteria that Charmaine is looking for.

Reply to the comment left by "S.E. Landlord" at "05/12/2015 - 10:17":

S.E. LL,

Regardless of whether anyone (other than HMT and the anti non-incorporated and encumbered LL brigade) thinks C24 is a good thing or not… it will clearly adversely affect a certain proportion of LLs, some very badly. Human nature being what it is sadly, a certain proportion of LLs *WILL* also exploit that situation, whether you or I or anyone else likes it or not.

Logically, most of those who might exploit the situation are likely to be incorporated or cash rich experienced LLs. Particularly those who are both incorporated AND who have excess funds at their disposal. Those who are not already incorporated will find it easier to now to so and exploit if they are wealth(-y,-ier,-iest).

Anyway, lets not fight or derail this thread - we could agree to disagree on this particular point?

On another point, I completely agree with your other comment regarding S21 on the thread today. 🙂

Reply to the comment left by "Tracey Hoad" at "05/12/2015 - 18:22":

Hi Tracy ,

I ve just seen your post .

Can you give Mark Alexander the ok for us to swap e mails and mobile numbers ?

Cheers

Charmaine

Reply to the comment left by "Gareth Wilson" at "04/12/2015 - 16:11":

Hi Gareth

I have sent the Megan Shaw example to youandyours@bbc.co.uk attached to the email below:

"Hi

I understand you are preparing a programme on the tax increases for landlords.

Clause 24 of the Finance Bill will impose a levy on the mortgage interest (and other finance costs) of landlords who bought property in their own names. It will not affect landlords who bought and borrowed through companies.

Finance costs for the former will be disallowed by HMRC in the calculation of rental profits. The effect will be to add them back to the real profit, thus increasing the taxable income.

So, on an unchanged real income, the income tax will increase. This change was announced in the budget of 8 July, a few weeks after David Cameron’s promise to the electorate on 29 April that his party would not increase income tax in this parliament.

However, the change was announced in a way that only a tax accountant would understand. Thousands of landlords are still unaware of what the government has in store for them. I hope your programme can make more of them aware.

Clause 24 will even move some landlords from the basic rate of tax into the higher rate. HMRC have stated that this will happen to 70,000 landlords. However, the National Landlords Association puts the figure at 130,000.

I have attached a spreadsheet showing how this will happen to a person who has a salary and a modest rental profit. After looking after the property for a year he or she would pay all of the profit to the state, plus a 70% penalty.

Before this tax change was announced Mark Carney expressed concern that loss-making landlords might exacerbate a house price crash. Clause 24 will of itself turn some landlords into loss makers.

This example has been verified by Megan Shaw Product Owner – Property Income & REITs, HMRC, Room 3/64, 100 Parliament Street, London, SW1A 2BQ 03000 585628. She wrote “If that means you become a higher rate taxpayer (or you were anyway) then you will have to pay more tax as a result of this change.”

The calculations show how the increase in income tax will arise which is needed because most people cannot believe it when they are first told.

Simply to maintain the current profit after tax, this landlord will have to increase the rent by almost 20%. If the tenants cannot afford this, because they are in receipt of housing benefit for example, they will be evicted and forced to apply to the council for re-housing in “temporary accommodation” at a higher cost

These are the predictable twin effects: increased rents and increased welfare costs. Landlords will be no better off; they will just collect the extra cost from the end user to hand over to the state.

When this lunatic tax was tried in Ireland, rents rose by 24%.

Property118 has been running a campaign against Clause 24 since July: http://www.property118.com/budget-2015-landlords-reactions/76164/comment-page-624/#comments
.
Kind regards

Reply to the comment left by "Appalled Landlord" at "05/12/2015 - 20:43":

Concise, substantiated and to the point... I really like it!

http://www.ft.com/cms/s/0/43956e6e-9a87-11e5-a5c1-ca5db4add713.html#axzz3tYhieO1x

Institutional investors have indicated that they committed to £50 Billion for Build To Let by 2020...this could potentially result in demise of buy to let landlords.

Now, we understand as to why, Osborne has decided to phase out tax changes over the course of 4 years, so these institutional investors get sufficient time to flood the market with properties.

I would suspect, there would be more Taxes on Buy To Let in the run up to 2020. (Key Date)

There's your answer big business wins as usual but they are focusing on young professionals etc

What about families on benefits etc who want gardens and to stay next to there families in areas, not everyone wants to live on a complex with gyms etc it's only catering for a certain type of renter

I hate what this government are doing ruining viable business's that we have worked hard to build so there cronies can mop up and we think we live in a democracy ha look after yourself and those close thats the only way to survive in this modern day

Not all landlords will face the same costs, e.g. accidental buy to lets with tax at 20%, those with high equity and low mortgage interest. Those mortgage free will be unaffected, these landlords won't take advantage and will keep rents the same, they will benefit from lower voids. My advice is don't expect rents to adjust higher, there is a wide variety of landlords to compete with. Rather concentrate on selling a few properties and improve your equity so after tax you have positive cashflow. Buy to Let isn't dead, just Buy to Let with borrowed money.

50 billion at say £100,000 a unit would mean 500,000 news homes would be available to rent over the next 5 years.So well short of the current stock held by private sector landlords.