emails to George Osborne – Chancellor of the Exchequer

Little has been said about properties held in a limited company, other than with regards to transferring privately held properties into such a structure, and the transfer costs to do so.

A point has been missed is that prior to the proposed tax changes privately held properties where the actual profit exceeds £43,000 are already being taxed more heavily than if the same portfolio was held in a limited company which would be taxed at 20% (and going down to 18% by 2020). The proposed tax changes makes the difference even larger.

FAO Steve: New MP's, older MP's and particularly the MP's of opposition parties will all want to make their mark in Government. If thousands of letters were received by them from a significant voting landlord group they would 'not' be ignored. Unfortunately to many rely on the efforts of others. It takes no time to write a letter and post it. To sit back and do nothing is not an option, please don't put a downer on those who try! I have written my letter and will be meeting my MP in two weeks time!

Added to the burden of an increase in taxation is the impact this will likely have on rental calculations lenders use which could mean many landlords become mortgage prisoners and/or landlords will be unable to raise the necessary finance to buy more property. At present lenders commonly use a 125% of 5% rental cover (some 5.5% or higher & very very few use 125% of the pay rate). This 125% margin is used to cover voids, costs/expenses, service charges & the 5% notional rate is used to allow for an increase in interest rates (which will no doubt increase as interest rates slowly rise). To accommodate the loss of higher rate tax relief, we could see lenders margins increase to approx 130% or higher.

I have to agree with Steve to an extent. The destructiveness of the tax-change is too obvious in my opinion to be the result of a mere oversight or lack of understanding. I believe that the consequences of which we are warning are in fact the main rationale of clause 24.

The policy has probably been preceded by a calculation: that the actual collateral damage of ruined landlords, rents increased and tenants evicted is outweighed by the enhanced popularity and votes to be had from being seen to be destroying landlords and jumping on the rapidly-growing anti-landlord bandwagon. This has probably been compounded by a secondary calculation of the parliamentary spin machine beating our own in the battle to assign blame for the mess this chancellor is going to cause, and the potential for landlords (mortgaged ones of course) to be "punished" yet further as a result of that further outcome.

Factor in as well that those most likely to be represented or connected to our "honourable" members of parliament and actually fuelling the London housing bubble - corporate landlords and cash-buyers - are suspiciously exempt from the onslaught, and the deliberate motivation of the measures seems even more obvious.

The politicians that we trusted to responsibly manage the housing/rental market and voted for, along with various of their cronies, are using the tax system to steal what we have, what we have worked and saved for. Their intention is to drive us out of business, harvesting our properties for their own financial gain and the votes of the rapidly growing, and extremely misinformed anti-landlord brigade for their own political gain. A stitch-up, a hatchet-job, a feeding frenzy: they're out to get us because contrary to our previous tempering of the rhetoric, it turns out that our most influential politicians really are the lying, corrupt, morally-bankrupt, opportunistic, self-aggrandising scumbags many people said they had been all along.

But this is why we have to fight!

Now we know the score: that what we have been taught is the right way - filling in our personal tax returns, bending over and asking HMRC to be gentle - is the way to eventual ruin. We must still keep the petition-counter going, share it and the articles of property websites like this with as many people as possible, keep the e-mails bouncing back-and-forth, drive our MPs mad, never stop arguing, make them psychologically implode, sit down and plan with the best property accountants we affordable, lock down our tax liability as best we can, hand any tenants we evict as a result of this measure printouts of our e-mail correspondence with our dismissive MPs, do the same when announcing the resulting rent increases, sling your canvassing local (probably Tory) MP off of your property come next election time and call them an "'effin' backstabber", fight them on the beaches, fight them on the landing grounds, fight them in the fields and in the streets, fight in the hills and never surrender.

This is a vindictive and evil piece of legislation, devised to damage our country for the enrichment of an opportunistic few. The day it succeeds in obtaining what it was designed to from myself will be the day money is prised from my cold dead fingers.

I have been drinking coffee.

Yes Gareth, good post.

The anti-BTL brigade are naturally thrilled to bits, genuinely falling for GO's spin. What they fail to realise despite it being spelt out for them on many occasions is that the vast majority of BTLers will not be affected by C24 as they include the unencumbered & incorporated. In fact they are more likely to see C24 positively due to upward pressure on rents, buying or building PRS opportunities for them.

In fact I wouldn't be surprised if C24 was actually the idea of corporates wanting a sizeable chunk of the PRS with GO merely being their yes man.

NPR levy for ALL residential landlords could have achieved infinitely more revenue for HMRC. But unsurprisingly DG (or his parties corporate sponsors) not interested in that.

I know, it's insane. The exceptionalism of government and public attitudes towards landlords, doesn't just concern the calculation of profit, it concerns basic economics as well.

Throughout the private sector competition is considered positive. But no, not the rental market, apparently this particular market is going to be enhanced by the eradication of its majority of small-medium scale providers. Yeah right! Things would get better like they would in the energy sector, were the Chancellor to tax all of the new small suppliers out of existence and leave the market to the Big Six! Fortunately though there is no populist bandwagon in support of that!

I mostly let to young people moving from other parts of the UK to start new jobs after university, and Polish and Eastern European immigrants seeking to work in the UK on a temporary basis. The lives of these people are in a state of transition, and at this point in time they do not wish to purchase a home of their own. They represent an almost constant demand for rental property, and we are the supply that they NEED. If we are forced out of the market because of Osborne's Tax on Mortgage Interest, where will these people go - these people who have done nothing wrong, whose viewings of my properties can rise to double-digit figures, and who have even offered to clean my whole house to get ahead of other potential viewers and secure the property (I don't take advantage of such offers btw).

Reply to the comment left by "Gareth Wilson" at "19/11/2015 - 22:47":

And who will step in to the void... faceless corporate landlords, facing reduced competition, who will set higher rents in the long-term, put up barriers to communication, and tie the tenants in knots with T & Cs and fees.

Reply to the comment left by "Gareth Wilson" at "19/11/2015 - 22:49":

Those faceless corporates you mention have GO's ear though. Small/medium private (some very PROFESSIONAL) resi property businesses sadly do not.

As said before the PRS desperately needs a subscription based (to cover admin costs) yet not for profit / unbiased representative body to... represent the sector, landlords & tenants, encumbered or not, incorporated or not... capable of lobbying against govt BS rhetoric effectively.

Ps i let / manage myself. I have never charged any fees to tenants. I don't agree with it. LLs should pay any fees as morally incorrect to charge buyer & seller

Reply to the comment left by "Mark Shine" at "19/11/2015 - 23:49":

Hi Mark,

You run your rental business just like me. No fees and no agents. Just a quick response to maintenance issues, a monthly rent, and a deposit.

Between drinking mulled wine from goblets by the fire, and planning dastardly, spiteful landlordy deeds in our castle on the hill, myself and my mother even do the cleaning between tenancies.

George Osborne has made a series of aggressive, unfair unworkable financial attacks on landlords since July 2015, particularly clause 24 and the substantial increase in stamp duty for people who buy more than one property. This chancellor has singled out smaller landlords for financial annihilation whilst protecting his pals who run large corp-orates from clause 24 and other rich pals who are protected from extra stamp duty payments if they buy 15 or more properties at a time. History shows that the chancellor of Germany in 1939 did a similar thing to destroy businesses of certain groups of people and handed them on to his pals also, before taking things much further right the way to hell itself. Whilst George has a degree in History he hasn't learned from it and seems happy to discriminate against individual groups of hard working decent landlords with successful businesses who provide an important service to the community in order to enable his rich pals to cleanup.History often partially repeats itself. Clause 24 needs to be ripped up now and he needs to take advice from persons highly qualified in economics rather than an idiot with a Geography degree ie Mr David Kinsman whose useless, biased and completely inaccurate project was used as a basis for clause 24. Lets hope that the legal eagles who look at clause 24 agree with us!