Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "Ros ." at "03/05/2016 - 09:22":

I think you're right about people on LHA/HB but I'm sure the heroic build-to-rent guys will come to rescue of Local Council who will be faced with massive B&B bills. Anyone who thinks B&B will be just temporary in the future needs to think again.

I'm not going to hold my breath though for the calls from Shelter, Generation Rent, et al about the resultant billions of taxpayers money being lavished on those "greedy institutional Landlords" though.

LHA's still haven't woken up to the train crash that lies ahead of them.

Jus sent this to my local county councillor, Jose Green (Con.):

Hi Jose,

You might be interested in the article below which regrettably will become a very familiar story in the next few years as Landlords in the private rented sector, PRS, exit the market or seek Tenants who can pay for the increased rent that Landlords will necessarily have to charge to pay for the increased taxes that will be levied by this Conservative Government.

http://www.propertyindustryeye.com/plight-of-family-where-landlords-refuse-point-blank-to-consider-tenants-on-benefits/

You might ask why this is happening now as the new taxes don’t kick in until next year. Well there is the other driver which is Universal Credit which is making it harder for Landlords to collect rent coupled with the near universal vilification of Landlords in the PRS for “greedily” taking over £9bn in rent from Housing Benefits claimants. And, of course, Landlords are taking the advice of the Chancellor of “adjusting their business models” in advance of these measures coming into effect. “Adjusting their business models” is the Chancellors euphemism for increasing rents, and evicting those that cannot afford them (i.e. those on Housing Benefit).

The question I would like to ask you is: what plans does Wiltshire Council have to deal with this problem as the Council has a legal obligation to provide housing for these “displaced” people/families? Are the Council going to build houses for these people? (if so where will it get the money from to do so), or if it is going to pay third parties to house them where is going to get the money from to do so as the cost will certainly be substantially higher than it is now; so where is this money going to come from?

I look forward to hearing back from you.

Just emailed this to my local county councillor, Jose Green (Con.):

Hi Jose,

I look forward to hearing back from you.

It is good to hear that government finally recognise that we have a housing crisis, their responsive actions will turn the crisis into a catastrophe, it is going to be like watching a slow motion car crash.

Reply to the comment left by "Trendo " at "03/05/2016 - 10:50":

Not too slow a motion, I have already increased my rents by 10% as a direct result of Osborne and will have to increase further over the coming years, probably by around 10% a year. This is not to make extra profit but just to stand still. I have served 35 section 21 notices, more as a threat than a promise, but three Housing Benefit tenants have already left to be replaced by working tenants. All this and clause 24 has not yet started to have an effect.

Reply to the comment left by "Rhys Jones" at "02/05/2016 - 23:13":

Hi Rhys.

George Osborne has been approached twice by the RLA in his constituency surgery. It seems he did understand the consequences, some of which he may have created deliberately, but cannot be seen to be backing down (again), so refused all attempts at clemency.

Michael Fallon has been put through the ringer a couple of times in some superb meetings by two of the 118'ers, but either didn't understand it and/or feebly tried to trot out the party line. Im pleased to say he was adequately cut down to size on each occasion!

David Gauke I don't know about, but he did send me a written reply stating that he couldn't see housing standards falling as the law required minimum standards to be kept - thus proving that he had completely misunderstood that landlords regularly supply ABOVE MINIMUM standards and that he thus seemed to be advocating dropping them to the lowest common denominator! He clearly doesn't get it either, or is willing to make himself look a complete plank in order to toe the party line.

Reply to the comment left by "Barry Fitzpatrick" at "03/05/2016 - 10:22":

Barry,

That is an absolute corker. And Wiltshire is the home of our friendly landlord-bashing 'Tory' councillor Devine, who clearly doesn't want us to house the social tenants, what with us being parasites an' everything (see Salisbury Journal for details). Perhaps every landlord in Wiltshire should refer to his (sadly not so) unique views when sending their LHA tenants back to the council for housing!

Reply to the comment left by "James Fraser" at "03/05/2016 - 20:58":

Well, Osbourne could be saved the loss face (pardon the english) by losing office? Fallon used to be my MP nand isn't going to rock any boats. It is quite possible that GO, while not being my MP, will be closely associated with my constitutency. I'll have to work on that one.

More than 6 months after I first contacted my MP asking him to oppose Section/Clause 24, I received this reply dated 3 March:

“Thank you for contacting me regarding the Government's proposals to restrict tax relief for residential landlords, contained within Section 24 of the Finance (No.2) Act 2015, and due to be phased in from April 2017.

I know that a number of landlords and the National Landlords Association (NLA) have expressed concerns about this measure. Indeed, the NLA estimated that it may push more than one hundred thousand private landlords into a higher income tax band. My Front Bench colleagues raised this in the Committee Stage of the Bill, probing the Government on the number of people that would be pushed into a higher tax band.

The measure has support from the housing charity Shelter, and while I do not oppose it in principle, I supported the efforts of my Opposition Frontbench colleagues to scrutinise and probe the Government on its impact.

I am yet to be convinced that this policy would do anything to tackle the affordability of housing for aspiring home owners. At the core of the housing crisis is the fact that not enough homes are being built, and I believe that the Government have no long-term plan to answer this. I am concerned that there are now 200,000 fewer home-owning households than in 2010. I welcome the launch, by the Shadow Cabinet Minister for Housing, of the 'Redfern Review' into the decline of home-ownership, to help bring fresh ideas to the wider public debate on how we can get to grips with this problem.

I understand the strength of feeling on the issue of Section 24 and that a campaign group has called for a Judicial Review of the policy and I will follow this and any other developments with interest and bear your views in mind. I will continue to urge the Government to bring forward a coherent strategy to address the housing crisis.

In relation to whether it will increase homelessness, I know that Cheshire West and Chester council are keeping a close eye on this issue, and would hope that they will be taking measures to mitigate the impact of this policy.

Yours sincerely,

Christian Matheson MP”

I have replied as follows:

Dear Mr Matheson

Thank you for your letter of 3 March as first acknowledgement of my emails of August, September and October.

In the latter I asked you to oppose clause 24 in the vote of 26 October. However, I note that you are not opposed in principle to the major cost of just one type of business being disallowed as a tax deduction. Your letter has prompted a number of questions.

Firstly, is this the Labour Party Line? The reason I ask is that another Labour MP has sent out a letter with identical wording.

Secondly, why are you concerned that some landlords will be pushed into a higher tax band, given that increased taxation is the whole point of Section 24, to which you are not opposed?

Thirdly, what measures can the local council take to mitigate the impact of this policy except to increase its budget for housing the increased number of homeless people that will result?

Regarding the chronic under-supply of dwellings, George Osborne’s announcement of clause 24 last July has caused landlords to stop financing new-build developments, to stop rehabilitating derelict properties and to stop converting over-large houses into HMO’s.

To put this in perspective, the English Housing Survey credited the private rented sector with 83% of the increase in the number of dwellings between 1996 and 2013:
"From 1996 to 2013, the total number of dwellings in England increased steadily from 20.3 million in 1996 to 23.3 million in 2013. Much of this was due to the notable growth in private rented housing which more than doubled in size from 2.0 million to 4.5 million over this period."
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/453668/Bulletin_12Aug2015_FINAL.pdf

Thus 2.5 million out of the 3 million increase was thanks to the PRS. That is 83%.

Are you opposed in principle to Section 24’s negative effects on the supply of dwellings, on the construction industry and on the wider economy? If so, you should be opposed to Section 24.

Some landlords have increased rents for tenants who have not had an increase since they moved in years ago. This is so that they will be able to pay the government the levy that Section 24 imposes on finance costs, in order to avoid being made bankrupt by HMRC. The landlords themselves will be no better off financially.

Other landlords have evicted tenants so that they can sell their properties, their only way out of the tax trap, thus reducing the supply of rented accommodation, thereby increasing its price.

Others have issued eviction notices to tenants in receipt of capped housing benefit, so that they can replace them with working tenants who will be able to pay the increase in rent, or tenant tax, as it is now known.

Are you opposed in principle to higher rents and increased homelessness? If so, you should be opposed to Section 24.

Kind regards

Hi there AL,

I suppose his reply is slightly better than we might otherwise have expected, but your response back to him is absolutely superb. If any MP can receive that response and still support S24 they must be clinically insane. I'd love to know what he writes back to you.

Incidentally, Shelter seem to be remarkably reluctant to comment on it now, as they seem to have realised the policy has the same damaging effects on tenants that they've always claimed to want to avoid. Theyre doing tenants a great disservice by not coming out against the measure.