Summer Budget 2015 – Landlords Reactions

So in your case Paul, you do not add your 3 months rental Income as an income but only 9 months. But still reclaim 20% Credit for your Mortgage interest payments for those 3 months despite you did not receive any income.

Reply to the comment left by "Simon Hall" at "05/11/2016 - 21:13":

Thanks Simon..,

Reply to the comment left by "Paul Green" at "05/11/2016 - 20:38":

No that's not how it works.
If your rent is normally £1000pcm then your gross rent is lower by £3000. If your marginal rate of tax is 40% then youe tax payable will be lower by £1200. You'll still get your full "relief" of £1200 for the year (£500 x 12 x 20%)..

If interest rates increase and say you have to pay an additional £3000 interest per year, then your deemed profit would be unchanged but your basic rate relief would increase by £600 (£3000 x 20%). But your actual profit has fallen by £3000, so your net cost is £2400..

If your maintenance cost were to increase by £3000 per year then your cost would only be £1800 assuming your marginal rate of tax is 40%.

Reply to the comment left by "Barry Fitzpatrick" at "05/11/2016 - 22:32":

Thanks Barry.

Here is my email to Bristol City Council regarding Shelters support of section 24

Dear Ms Norris,

Thank you for the Landlord News Autumn 2016.

I note that Shelter are included as an advert on the back of your document.The reason why I mention it is because Shelter support the income tax changes on landlords that will cause many to sell their properties, increase rents switch to holiday lets or face bankruptcy.

I now find myself in the position where buy to let is not worth bothering with and I will be forced to evict vulnerable low income tenants and switch to holiday lets.This is something I dread doing but it is being forced upon me.It is the most vulnerable and poorest members of our society who are going to have no where to live and Shelter support it.Make no mistake the supply of long term rental properties is going to shrink and the Councils homelessness problem will get much worse.

You may be interested to note that Ireland had their own version of section 24 of the Finance Act 2015 and it caused rents to rise by 50%. Consequently the Irish Government reversed it.

Section 24 of the Finance Act 2015 is going to cause a lot of trouble for landlords and tenants and given that Shelter support section 24 I for one will never work with them either now or at any point in the future.Of course I would like to know what they have to say in their defence but they seem to have gone rather quiet.

Yours Sincerely,

WT Morgan

Shelters response.......

Dear Mr Morgan,

Thank you for your email, which was forwarded to me by Julie Norris at Bristol City Council on 1st November. At Shelter we help over 4 million people a year facing bad housing and homelessness and recognise the key role landlords play in the market.

While the restriction of mortgage interest tax relief has never been a priority for us and is not something we have campaigned on at Shelter, we do support the principle behind the change.

We support it because we believe that there are higher priorities for government spending. Our campaigns have necessarily focussed on protecting housing benefit for low income renters and the affordable homes budget. Cuts to and restrictions on housing benefit are the single biggest threat to increasing homelessness in the immediate term; and cuts to the budget for genuinely affordable homes pose the biggest threat to finding a long term solution to homelessness in England.

Irrespective of our in-principle support for the policy, we fully support work to mitigate any possible unintended consequences that the government’s decision may have and that you have outlined. Given the five years before these changes come fully into effect and the 12 months before they even start to be phased in, there is time for this to happen.

We would encourage any landlord who believes that they might be affected by the tax changes to take advantage of the time they have to consider their options, which include negotiating with their lender, selling properties with sitting tenants or discussing other options with those tenants.

Yours sincerely,

Penny Walster

Hub Manager – Bristol

Reply to the comment left by "Bill Morgan" at "08/11/2016 - 14:32":

Well done for having a go Bill. It is important to keep writing these letters, however ridiculous, ignorant and infuriating the responses are. This woman does not know what she is talking about. Can you forward her a copy of my report and particularly point her to the beginning regarding 'sophistry' and ask for her comments on that. Also ask her to explain how disallowing business costs constitutes 'Government spending', as we don't receive anything from Government.

I bent the ear of Penny at the most recent Association of Local Landlords, Wessex, meeting in October. She seems to have changed her tune from being moderately supportive of private Landlords to being unsupportive (possibly under instruction after she'd agreed to put our points up to HQ).

I hope these people including MPs will be able to sleep at night knowing they stood by and did nothing to stop the impending catastrophe. And in the case of MPs and Councillors be able to face their electors and defend their inaction or unsupportive stance.

Penny Walster...

Penny Waster more like.

More copy and paste rubbish from this negligent and contemptible organisation masquerading as a housing charity.

I find it astonishing - no, wait, I don't - that Shelter's serious suggestion is that to assist homelessness we sell up. Preferably to another landlord, of course, who may be worse than us, or charge more than us - and all assuming we should sell under these conditions in the first place! Wonder what Shelter's position is if you sell the house but evict the tenant? Perhaps the tone of our communications with them should be much more direct: 'Dear Shelter. A family of four has just been evicted from a perfectly happy and secure home of 7 years because of Section 24 which YOU thought wasn't a big enough issue. I did NOT want this, and would NOT have evicted them, but curiously the biggest homeless charity in Britain thinks this is a good idea. I'm evicting 10 other families this year and will give them your number. Please explain, as explicitly as possible, why you STILL think this is a good idea as I want to explain to the tenant your support of these measures as accurately as possible. Yours sincerely. A. Landlord'.

What I find astonishing is how such ill informed amateurs get so much national exposure partly because they are 'charities' but I would love to know who their PR team is. We could do with some of the same as our group is full of well informed business people speaking sense who get little exposure and constant negative headlines