Iain Duncan Smith Has Spoken Out For Landlords

I wish to thank you for the comments made at the end of your recent article published in the Sunday Telegraph (18-Jun-17) regarding the way which the Conservative Government is treating private Landlords. Many Landlords are reeling in utter disbelief that a Conservative Government would contemplate introducing such measure as restricting mortgage interest relief let alone making it retrospective on mortgages already taken out, and making it anti-competitive by being applicable only encumbered Landlords and exempting limited company Landlords. Although only just being phased in the effects are already becoming felt by Tenants as Landlords prepare for the onslaught; tenants are facing huge rent rises, people on benefits are finding it increasingly difficult to secure a property, people on Housing Benefits are being evicted, Landlords are exiting the market as their businesses are being rendered unviable (reducing the pool of rental properties available).

What many people do not appreciate (and I include the Treasury in this) is the scale of the impact it will have. The Treasury itself has stated about 400,000 Landlords will be affected but fails to recognise that these Landlords probably provide homes for over a million tenants and their families a total in excess of 2.5m people (some estimates are for 2m and 4.6m respectively). David Miles, professor of Economics at Imperial College London and former member of the Bank of England Monetary Policy Committee has calculated that rents will have to rise by 20-30% for Landlords to pay this tax ( similar measures tried twice in Ireland and twice repealed caused rents to rise by 50% and homelessness to soar). The ramifications of such an increase on Tenants will be devastating, and of course, the worst affected will be the poorest of our society especially those on benefits. Many tenants will be forced to move to a smaller property or to a cheaper area incurring large costs in moving home, and upheaval to their lives, those at the bottom of the housing ladder will have nowhere they can move to and will become homeless. Local Councils already struggling to cope with homelessness will be overwhelmed. In some regions where rents have already reached a ‘ceiling’ Landlords will be facing effective rates of tax in excess of 100% and will be exiting the market or face bankruptcy. Which is why Landlords are already avoiding renting to people on benefits.

As a former Secretary of State for Work and Pensions you will, more than most, recognise the potential impact this will have on the poorest in our society. I hope therefore that you will use your influence as a senior Tory to make this Government see sense and scrap s.24 Finance Act #2 2015 “restriction of Mortgage Interest Relief” before irreparable damage is done. And in doing so restore the faith of the ~2m disaffected private Landlords (many of whom didn’t vote or voted for another party at the last General Election and could have made a vast difference to the outcome).