Telegraph article highlighting our own Mick Roberts

Mick Roberts is a rare breed, or is he? I think that it's a great well thought out plan. He gets out before security of tenure and rent control arrive - which it inevitably will- at a mere 10% reduction on just some of his properties.
I'm almost out of the game, but plan to do the same.

I'm not sure what the tax arrangements are re "gifting" under these circumstances but I think if Mick does this he ought to be permitted to deduct the gifted amount from his CGT bill one way or another. Presumably HMRC won't expect the CGT bill to be calculated on the full amount before gifting. I also don't know what the stamp duty considerations would be here.

Reply to the comment left by Beaver at 31/05/2022 - 14:49
Gifting, where did he say that? Maybe it was in the full interview. In this clip, he said that he would reduce the sale price. So CGT doesn't come into it.

The article says "Mick Roberts is making an unconventional offer - he will gift them a deposit so they can buy their homes from him...." It's the caption immediately below the picture of Mick Roberts.

I'm not sure what the tax implications are of this.

Reply to the comment left by neilt at 31/05/2022 - 13:03
I think we all need to get out before the next 100 rules arrive we don't know about yet.

Reply to the comment left by Beaver at 31/05/2022 - 14:49
A few people have mentioned the tax, let's hope. I plan to pay the deposits for the tenants to help them to buy as most would struggle to save up £7000.

I will be interested to hear about the tax situation because I have at least two tenant families for whom I would be prepared to gift the deposit. They could never save the amount needed for a deposit - but they could afford the repayments because they pay their rent on time every month.

ps: I was unable to read the article because apparently I have used my one free access to the Telegraph.

Reply to the comment left by Mick Roberts at 31/05/2022 - 15:50
Good luck with that. Presumably you can deduct it from the sale price if that's how you are doing it, I don't know. I'm not sure what these properties are worth at an open-market valuation. The full article wasn't available to me as I'm not a Telegraph subscriber. All I could see was a caption saying you were gifting the amount.

If sale price is £125,001.00 and you gift 10% up to a maximum of £7K per property (i.e. £7K rather than £12.5K?) and if stamp duty calculated on full undiscounted amount then HMRC trousers £2.5K in stamp duty from the tenant who has in effect then been given £4.5k?

I don't think you should be nailed for this either. It would leave a bad taste in my mouth to be hit with a CGT bill based on the full amount after I'd also had to swallow all those regulations that were imposed on me but not on providers of social housing.

I'll copy the words below.
Yes they force us into selling, then want the tax too.

'I'm paying people to buy 40 of my houses because the Government hates landlords'
Meet the landlord prepared to lose £520,000 to avoid evicting his tenants

Mick Roberts of Hucknell, Nottinghamshire, who is a landlord with a portfolio of rental properties in the area.
Mick Roberts wants to offload 40 of his buy-to-lets in Nottingham because of Government policies
Mick Roberts is making his tenants an unconventional offer – he will gift them a deposit so they can buy their homes from him.

If they cannot get a mortgage, he is also prepared to cut the sale price by a tenth if the landlord buyers he sells to keep the existing tenants on. This could cost him more than half a million pounds.

These drastic measures are in response to proposed rule changes that will force landlords to improve the eco-efficiency of their properties, costing as much as £10,000 per home. He now wants to sell 40 of his properties.

Over the past 25 years, Mr Roberts has built a successful buy-to-let empire. He describes himself as the biggest benefits landlord in Nottingham. "I would like to pack it in and sell up. But I can’t because my tenants won't have anywhere else to live," he said.

The local rental market is fierce. Across the country, the number of homes available to rent has plunged by 50pc, according to property website Rightmove. Data from property website Zoopla show rents are rising at the fastest rate for 14 years. Mr Roberts added: "There are 50 working tenants queuing for each house at the moment.

Asking rents in most regions are at least 10pc higher than last year
Asking rents in most regions are at least 10pc higher than last year

Part of the supply crunch is because other landlords, as Mr Roberts plans to, have sold up. A series of Government measures, such as cutting tax relief on buy-to-let mortgages, plans to abolish Section 21 "no-fault evictions" and the introduction of minimum Energy Performance Certificate requirements, have squeezed profits making a once lucrative business almost unaffordable.

Mr Roberts added: "If the anti-landlord rules were relaxed, we would see normal market forces, supply and demand would come back and there would be lower rents."

He had hoped to slowly dismantle his empire by selling the properties as and when his tenants moved on. However, as the supply crunch deepens, Mr Roberts’ low-income tenants are increasingly unable to move anywhere else.

His solution is unconventional and expensive. He has spoken to 30 tenants offering to pay their 5pc deposits if they can get mortgages to buy their homes from him – at a total cost of £260,000 based on an average property price of £130,000 in his portfolio.

His second plan is to take a 10pc hit on the sale price but only if another landlord promises not to evict the current tenants. This would cost him more than half a million pounds.

He wants to act soon, knowing that more anti-landlord rules are in the pipeline. Housing secretary Michael Gove plans to introduce a landlord register and apply the Decent Homes Standard for all private rental properties via the Renters Reform Billl. This could resemble the selective licensing schemes rolled out by some local authorities.

The council in Nottingham, where Mr Roberts’ owns his properties, launched a selective licensing scheme in 2018. Landlords have to pay £890 per property to be accredited.

Mr Roberts said the increased bureaucracy that comes with selective licensing schemes is the biggest factor pushing him to sell
Mr Roberts said the increased bureaucracy that comes with selective licensing schemes is the biggest factor pushing him to sell
Incoming EPC targets, which will require landlords to pay for eco upgrades, are a further push factor. Mr Roberts hopes to sell off the properties that will be most difficult to upgrade to a band C.

"I’m sure some of my properties are band E. To bring that to a band C might require £30,000 of upgrades. The Government’s talking about a £10,000 limit per property, but no one knows yet. And even if it’s £10,000, will I make that money back?"

In three years, the share of landlords planning to quit the sector altogether has doubled. In 2018, one in 20 landlords planned to sell up altogether, according to a Government survey. In 2021, the share was one in 10.

A further 12pc planned to decrease their portfolios. Together, these two groups of landlords represented nearly a third of all tenancies in England and Wales. Only 11pc of landlords planned to increase the size of their portfolios.

Last year, of the landlords planning to sell some or all of their properties, 55pc blamed legislative changes, such as cut to tax relief on buy-to-let mortgages. More than half also cited upcoming policy changes, which include the plans to scrap Section 21 "no-fault" evictions.

Reply to the comment left by Mick Roberts at 31/05/2022 - 16:16
Ahhh...eco-efficiency changes. Gotcha.

Looked at that 18 months ago. Cost of replacing a condensing boiler £3.6K...cost of anything else way higher both for me and for tenants. My own PPR (i.e. my home) does not have an EPC. The cheapest thing for me to do right now to heat my property despite the rise in coal prices would be to buy a load of coal as I still have a coal bunker and a chimney and you get loads of heat from coal.

In fact, I suspect it would be an advantage to open up the chimneys in my rental property and leave it to the tenants to decide which solid fuel to burn. It would be cheaper for the tenants, reduce the risk of my having to provide emergency heating if the electricity failed and it would have the advantage of keeping the chimneys dry and ventilating the properties.

Pity there's no incentive in the tax system to change anything isn't it?

Of course if you are a provider of social housing you don't have to do all this stuff.