Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "Dr Rosalind Beck" at "10/02/2017 - 14:09":

"HMRC’s analysis shows that only 1 in 5 landlords will be affected by the tax changes on property finance costs (such as mortgage interest or interest on loans to buy furnishings).
The Government does not expect this to have a large impact on house prices or rent levels due to the small overall proportion of the housing market affected. The Office of Budget Responsibility also expects any impact to be small."

Unfortunately same old unsubstantiated claptrap this Government has been spouting since this change was announced, hoping that people will believe it and that the inevitable train crash isn't going to happen.

On the same website they said Elvis was alive and well and living in Milton Keynes

Must be the same website where we can have net immigration of nearly 350,000 each year and stand there scratching our heads wondering why the NHS is crumbling, there aren't enough school places and of course there is a housing crisis !

Reply to the comment left by "NW Landlord" at "10/02/2017 - 13:37":

Wow. I'm amazed at Nationwide's underreaction. I think this statement is completely wrong:

“I think profitability may be a little bit lower in the next couple of financial years,” he forecast. “But if it is it will be modestly so and certainly it will be within the range of outcomes that we would be very comfortable managing.”

That's talking about a 16% profit drop the year following stamp duty rise, but reaction has barely began regarding S24. Wait until next year! Surely he knows that? Surely bankers have more idea than politicians? Or is he actually completely aware of what's going to happen and is trying to prevent some sort of run?

Must admit, I've not understood why lenders haven't been up in arms about S24.

Reply to the comment left by "Barry Fitzpatrick" at "10/02/2017 - 15:38":

I think the '1 in 5' argument is one that needs to be constantly quashed as he seems to be hanging on for dear life to this one - the idea that if 20% of a given group suffer - no matter what the injustice of it - it doesn't matter. Bizarre as a justification of a tax on non-profit. And, as we know, also not based on any sound evidence; in fact we can argue very coherently that far more landlords and massively more tenants will be 'affected.'

Reply to the comment left by "Dr Rosalind Beck" at "10/02/2017 - 16:20":

I think some-one should remind them of 'The Pareto Principle' or 80/20 rule of Cause & effect - which has been shown to apply in most walks of life.
http://www.investopedia.com/video/play/pareto-principle-8020-rule/

Pareto principle (also known as the 80/20 rule, the law of the vital few, or the principle of factor sparsity) states that, for many events, roughly 80% of the effects come from 20% of the causes. ...

And therefore it can be shown that by their own admission the 1 in 5 Landlords that will be affected will be the ones that own 80% of the mortgaged properties (i.e. portfolio landlords) & consequently it will be 80% of tenants who will be affected.

I have sent Liz Kendall the following email:

Dear Ms Kendall

Homelessness is getting worse because of Osborne's tax on mortgage interest.

On This Week you said “I’ve seen a lot in my constituency of increasing number of people who are homeless because they are getting kicked out of the private rental sector.”

I doubt that any tenants were actually kicked.  However it is good that you are raising public awareness - even if it was just an aside - that homelessness is increasing.  George Osborne said he wanted to level the playing field between landlords and owner-occupiers, and imposed extra tax on the former.

This has forced some landlords to sell - with vacant possession. This has increased competition for the remaining rental properties, which has tended to force rents up

And, in order to avoid bankruptcy, other landlords are passing Osborne’s ludicrous tax on to tenants, in the form of increased rents.

Those who cannot afford the increases are being made homeless.  They will have to be housed by councils in “temporary” accommodation, at much greater cost.  That is economic madness.  The cost in terms of human misery is of course incalculable.

Landlords have been warning that increased homelessness would be the inevitable result of Section 24 ever since it was announced in July 2015.  It is not yet in force but it has been a disaster for the poorest members of society.  The longer it takes to repeal, the worse the situation will become.  But repeal will not reverse the damage already done up to that moment.

You may think that homelessness will be reduced by the government’s building “ambition”. This is unlikely.  According to the NAO’s recent report,” The Department for Communities and Local Government’s most recent projections imply that an additional 227,000 households will form in England each year between 2011 and 2021” and “Since 2011, the cumulative gap between the number of homes built and the number of households being formed has  increased by 370,000”.

The million extra homes that the government has set as an ambition in the five years of this parliament would not even accommodate the additional 227,000 households a year that the Department projects.  Therefore the existing shortage that increased by 370,000 in the last 5 years alone will go up, not down.  I have pointed this out to John Healey and to Lord Beecham recently, and to my MP.

What is needed is effective opposition from the Labour Party, and it needs to be well briefed so  that it cannot be fobbed off like the SNP was in the House of Commons last year.

I would understand your reluctance, as a Labour MP, to appear to be championing the cause of capitalist landlords. But the fact is, you would not be fighting on behalf of landlords, you would be fighting on behalf of tenants, especially those in receipt of benefits who will be evicted in their thousands if Section 24 is not repealed.  No landlord wants to have to make people homeless.

Kind regards

Great letter

Does anyone with more time than me, want to do any Freedom of info requests to find out how much certain councils are spending on alternative accommodations for the homeless-Compared to last year.
I heard on the quiet yesterday, that some of Nottingham's Travelodge's are full with the Council Homeless.
This is something, that is not too public.
How much is Universal Credit & benefit caps & clause 24, who knows. But they are all adding up.

Maybe if so many percent can be attributed to clause 24, it might be an evidence angle we can swing at.

I just quickly found this on from September in Peterborough.

http://www.bbc.co.uk/news/uk-england-cambridgeshire-37451333

Homelessness doubles across Stratford district in past year

https://stratfordobserver.co.uk/news/homelessness-doubles-across-the-district-in-past-year/