Clause 24 and Housing Choice – An Open Letter to Labour MP Rob Marris

They haven't got a clue muppets who have no idea about business and the real world we are wasting our time it's gunna happen everyone needs to do what they can to protect themselves that's a consequence of our countries policies absolute no foundation backing up his answers

Judging by this MPs reply , are we understanding Clause 24 correctly? This forum infers that rental revenue not profit will be taxed. I am getting lost. Landlords will pay more tax, tax has to come from somewhere. Therefore rents will have to rise or properties off loaded. Will there be a response to this MP?

I have a large portfolio of properties and I keep them maintained to a very high standard for my tenants. Any maintenance with the properties are carried out asap. I am able to do this with the profit I make (yes that's right with the profit I make it just gets spent on the up keep of my properties, not on flash cars and holidays what some narrow minded people think landlords can afford to do !!!) when this tax restriction for landlords comes in I won't have the funds to keep on top of maintenance issues because I will be paying more in tax than I make in profit. This is going to cause havoc !! And I think landlords need to stand up to this before it's to late !!! I am a good landlord who is accredited by my local coucil like many other landlord but yet I still get tarnished with the same brush as rouge landlords as we are getting everything threw at us at the moment, the goverment need to be careful as many good landlords are going to move away from the private sector as it won't be worth doing in a couple of years the way things are going. I wouldn't mind most landlords just about cover their bills now after the cost of maintenance is spent on the upkeep of their properties to keep them to the standard the goverment expect. The goverment need to think about the implications this is going to have on everyone an not just landlords, and landlords need to fight against these changes !!

Here is my reply to Rob Marris

Mr Marris,

Thank you for your reply. I am grateful for the time you have taken to explain Labour’s position.

I have noted with interest your answers to my specific questions. My response to each of your answers is as follows:

1. Landlord organisations such as the National Landlords Association (NLA), the Residential Landlords Association (RLA) and the Scottish Association of Landlords (SAL) have surveyed their members and the results clearly show that landlords will increase rents. Many landlords, including myself, do not increase rents annually when tenants continue with their tenancies. I have a number of tenants who have been with me for several years and their rents have not been increased. As a consequence, some of my rents are below the market value. It is these rents that I am now increasing in preparation for Clause 24 being implemented. Since July 2015 I have increased 4 rents. One rent was increased by 11.5%. Landlords I speak with are taking similar action. Simple economics also suggests that market rents will rise. As the supply of private rented sector homes shrinks due to landlords selling, the rents that landlords will be able to charge will increase as demand will exceed supply. You have acknowledged in your reply that there is already competition in the housing market due to a chronic shortage of housing. Competition for private rented housing will further increase as the supply of available properties diminishes.

2. You said that tenants should not be evicted as it is likely that houses sold by landlords will be purchased by other landlords. I disagree. Firstly, it is a fact that most landlords buy below market value and sell at, or close to, market value, as they are motivated to maximise profit. I will not be selling properties below market value as I wish to maximise my return. To do this, I will wish to sell with vacant possession to owners. I can only do this if I serve notice on my tenants. Other landlords will have a similar approach. In any case, Clause 24 is such a game changer that existing landlords will not be looking to expand and new entrants to the buy to let market will be deterred from getting involved by the punitive tax regime that it about to be introduced. The Bank of England is also looking at ways to temper the buy to let market and this is likely to have a significant impact with stricter lending criteria being introduced. Your assumption that landlords will sell to landlords is in my opinion flawed.

3. You said that there should be no impact on homelessness. Again, I disagree. A recent study from Shelter has shown that the most common reason for people becoming homeless is the ending of a private rented tenancy. More private rented tenancies will be ended as a result of this tax change and homelessness will increase as a direct consequence of Clause 24. Landlords who sell will sell to home owners as they will wish to maximise the amount of money they receive for their asset. At present, because around 1.5 million council houses have been sold under the Right to Buy legislation introduced by Margaret Thatcher in 1980, and the provision of new build social rented housing is constrained by public sector finance restrictions, the supply of housing for people who cannot afford to buy is at a 35 year low. Private landlords prop up the social rented housing sector by renting to tenants on benefits and on low pay. Clause 24 will reduce the supply of private rented sector housing and thus there will be less accommodation available for the less well of members of society (traditional Labour votes). Reduced supply of private rented housing, and continued high demand, will result in more people being made homeless and this will put a strain on local authorities who have a statutory duty to house applicants who present as homeless.

4. I agree with you that Clause 24 will not cause the supply of housing to increase. If we are in agreement that there is a chronic shortage of housing in our country, and that this Clause will not improve the supply situation, why bother with Clause 24. It will not address the housing problems we face. Clause 24 will deter investment in the private rented sector as a time when there is massive demand for private rented accommodation. The logical thing to do to increase supply to address housing need and demand would be to introduce tax incentives to increase investment in the sector as it is only though increased supply that the nation’s housing problem will be addressed.

Thank you once again for writing to me to explain why Labour is supporting the Conservatives on this issue. I would be interested in hearing your thoughts on the further points I have made.

Nice one BTL. As you say, the irony is that the Government is going in the absolute opposite direction to that it should be going. I may post my exchanges with Rob Marris as well.

Rob Marris is so gloriously clueless that it is a joy to see him parading his ignorance so willingly!

1. He thinks that if you restrict supply in a tightened market then rents won't rise. We know for a fact that they do and will. WE are the people doing this, so how does he know more than us about our business?!

2. He thinks landlords will sell to other landlords? Why? Where's his evidence? Id be evicting my tenants as soon as possible if it comes to sale.

3. He thinks tenants are somehow protected? Eh? So we can't evict them if we want to?? The guy hasn't a clue.

4. If C24 doesn't increase supply, which all housing tenures urgently need, then what does he think is the point of it?

5. He calls himself a labour politician yet offers no opinion on how evicted tenants at the bottom of the scale are to be housed, nor all of the social consequences that go with this.

He really needs a lot of landlords explaining the reality to him.

Oh just thought...

6. He thinks landlords charge what the market will bear. They usually do not. They charge much less. But what he doesn't seem to grasp is that those market circumstances will change as a result of this and in a year or two's time 'what the market will bear' will be greatly higher rents than they are now.

It's frightening that these people walk among us.

I think you need to go back to him and explain the conseqence in terms of the facts and figures and figures showing how it makes landlords higher rate tax payers even though there may not be the profit to pay the tax due. And as a result the level of housing provided will be reduced as there will not be the money to re-invest

And counter his response to your questions
1. Yes the greater number of landlords there are then then the greater the competition and rent remain competative but reduce the number and the opposite is true and hes already stated their is a chronic shortage so his response doesn't stack up
2. Perhaps he should read up on eviction criteria as decision to sell is valid reason to terminate a tenancy. An empty property has greater market appeal, And why does he beleive another landlord will purchase it what grounds does he have for this comment
3. He's obviously not considered the properties may be sold to owner occupiers then. He;s obviously not aware either that housing associations are looking to reduce their social housing and are forcing renters to take up shared ownership or lose their home which is great for the housing association as they get paid rent and have no expense as the tenant picks up 100% of the running costs!
4. He's obviously not considered that by reducing PRS landlord reserves that whereas we have been doing our bit to increase the accomodation that this resource - that needs no government funding or incentives - will be lost

Although its depressing how naive their understanding is we still need to keep returning to the core issues and educating them.

It's quite clear to me that all the 118'ers have to write to him to tell him how clueless he is. The more the merrier. Nothing will change if we don't repeatedly tell him the error of his ways.

Reply to the comment left by "Carol Duckfield" at "06/11/2015 - 09:26":

Fully agree Carol. Basic facts and figures. I will draft something this weekend. If my understanding of this is correct, property turnover will artificially push people into higher tax brackets. Some will even lose personal allowance! Yet after the BTL mortgages are paid, the net profit would not cover the tax owed! I am yet to see a MP or HMRC simple example of this clause - before and after. If you debate with long text to a MP they waffle back and miss the points. We need direct sums. No wriggle room - hard facts.