Autumn Statement 2016 – Landlords Reactions

Autumn Statement 2016 – Landlords Reactions

13:30 PM, 23rd November 2016, About 8 years ago 30

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Chancellor Phillip Hammond delivered his Autumn statement today. No doubt there will be much discussion amongst landlords and letting agents yet again. autumn statement

And the good news for private landlords and their agents is ….. drum roll ….. errr ……. NONE!

Did anybody really expect a repeal of the legislation that will remove mortgage interest as a legitimate business expense from private landlords over the next four tax years? The responses from MP’s and Treasury are clear evidence that our concerns are not being heard and that we need to shout louder. Perhaps the best we could have hoped for was a softening of the policy to remove the retroactive effects by applying the changes to new purchases only. However, the Treasury clearly don’t give a damn about how their policies will affect the lives of hundreds of thousands of landlords and tenants and the misery it will cause, as has already proven to have been the case in Ireland. They simply continue to trot old the same old sophistry in the apparent belief that if they say the same thing often enough it will all turn out fine.

Clearly we need to re-double our efforts and I am pleased to announce that we have a plan for just that. Our survey below will be the catalyst for our biggest media campaign to date.

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Letting Agents will no longer be able to charge fees to tenants

Major letting agents including Foxtons and Countrywide have already seen sharp falls in the value of their shares since this announcement was leaked last night.

Whilst the Chancellors announcement will no doubt be treated by tenants as good news, industry bodies do not see it that way.

David Cox, Managing Director, Association of Residential Letting Agents (ARLA), said …

“A ban on letting agent fees is a draconian measure, and will have a profoundly negative impact on the rental market. It will be the fourth assault on the sector in just over a year, and do little to help cash-poor renters save enough to get on the housing ladder. This decision is a crowd-pleaser, which will not help renters in the long-term. All of the implications need to be taken into account.

“Most letting agents do not profit from fees. Our research shows that the average fee charged by ARLA Licenced agents is £202 per tenant, which we think is fair, reasonable and far from exploitative for the service tenants receive.

“These costs enable agents to carry out various critical checks on tenants before letting a property. If fees are banned, these costs will be passed on to landlords, who will need to recoup the costs elsewhere, inevitably through higher rents. The banning of fees will end up hurting the most, the very people the government intends on helping the most.” 

Richard Lambert, Chief Executive Officer at the National Landlords Association (NLA), said …….

“The new Chancellor is clearly aware of the pressures facing those living in the private-rented sector, but in attempting to improve affordability he has shown that, like his predecessor, he lacks an understanding of how the whole sector works.

“There’s no doubt that some unscrupulous agents have got away with excessive fees and double-charging landlords and tenants for far too long.  Banning letting agent fees will be welcomed by private tenants, at least in the short-term, because they won’t realise that it will boomerang back on them.

“Agents will have no other option than to shift the fees on to landlords, which many will argue is more appropriate, since the landlord employs the agent.  But adding to landlords’ costs, on top of restricting their ability to deduct their business costs from their taxable income, will only push more towards increasing rents”. 

Chris Sheldon. Managing Director of LettingSupermarket.com said ….

“It was only a matter of time before the legislation introduced in Scotland would filter into the rest of the UK so our business model was already prepared and ready for implementation. Our new fee scale to landlords will continue to be the most competitive in the Country offering full management for just 5% of rent (6% for properties inside the M25) and letting fees of just £100 per new tenant (£150 inside the M25). We will not charge for renewing tenancies for existing tenants. We anticipate a substantial increase in business as many landlords will be looking to reduce costs to in order to compensate for continually squeezed profitability, not only as a result of this announcement but also the tax changes announced over the last 18 months to mortgage interest relief and additional stamp duty.”

Contact LettingSupermarket.com


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Comments

Lee Humby

14:28 PM, 24th November 2016, About 7 years ago

Reply to the comment left by "Mark Alexander" at "24/11/2016 - 14:05":

Thanks for that Mark. I'll prepare all my figures and then make contact.

Appalled Landlord

17:20 PM, 24th November 2016, About 7 years ago

Reply to the comment left by "Whiteskifreak Surrey" at "23/11/2016 - 16:57":

Vicky Spratt, the features editor of Debrief who started the petition against letting agents’ fees, appeared on the Victoria Derbyshire show on BBC2 (and BBC News channel) on 17 November, just after the news segment at 09.37.

She said “My worst renting experience was when my rent went up by £50 a month in a flat that I really loved. I knew I couldn’t afford it and that eventually it would go up again so I had to move.”

This apparently was worse than the mouldy bedroom that she said had caused her to be prescribed an inhaler 3 years earlier even though she didn’t have asthma.

She held up a sheet calling for a ban on letting agents’ fees. A family receiving tax credits wanted 3-year tenancies. A pensioner wanted landlords to give a minimum notice of 6 months to vacate. Rent control was not brought up until later in the programme - at 10.35.

In addition to the three tenants above, another one complained about not being able to save.

To counter this broadside, only one landlord was interviewed, and she just argued against rent control (by saying that the cost of tradesmen was extortionate).

Richard Lambert, chief executive of the NLA, was also on the show with Kate Webb, head of policy at Shelter, and Labour MP Andy Slaughter who wants longer tenancies and a cap on increases in rent. At one point the latter said “I feel quite sorry for landlords because they are making up for the government’s deficiency, we are not building enough housing.” He said in his constituency (Hammersmith) it costs £1,000 to rent a room.

Kate Webb refrained from any criticism of landlords, which was nice.

Richard Lambert had the last word on the show. He stunned Victoria Derbyshire with: “The UK’s taxation of landlords is the least favourable in the developed world”. He explained that this was according to the LSE’s Housing Unit. It was unfortunate that he did not have the chance to describe how it will be much worse from next April.

Mark Alexander - Founder of Property118

17:28 PM, 24th November 2016, About 7 years ago

Reply to the comment left by "Lee Humby" at "24/11/2016 - 14:28":

I look forward to hearing from you Lee
.

Gromit

8:42 AM, 26th November 2016, About 7 years ago

Reply to the comment left by "Old Mrs Landlord" at "24/11/2016 - 14:04":

You forgot to mention homes for retiring former Government ministers (i.e. a nice non-exec Directorship and a 6 figure salary.

Mike W

18:03 PM, 26th November 2016, About 7 years ago

I just wondered whether anyone had picked up on the reporting requirements that are coming for landlords under 'Make Tax Digital'? Quarterly reporting and scanning of all receipts/records. And reporting of each property! Clearly a proposal which comes from a civil servant with no experience of the real world. Now I must scan that B&Q receipt for that 89p bag of nails.......

Whiteskifreak Surrey

21:33 PM, 26th November 2016, About 7 years ago

Reply to the comment left by "Mike W" at "26/11/2016 - 18:03":

Idiocy beyond any words.
Apparently that has been postponed to 2017.
Accountants must be VERY VERY HAPPY - work 4 times a year, not once.
I am waiting what is coming next

Troydave

21:59 PM, 27th November 2016, About 7 years ago

Reply to the comment left by "Whiteskifreak Surrey" at "26/11/2016 - 21:33":

By 2020 for us I believe.
Funny how we are a business one minute but not the next.

Gareth Wilson

22:19 PM, 27th November 2016, About 7 years ago

Reply to the comment left by "Mike W" at "26/11/2016 - 18:03":

The absolute, naked contempt of politicians towards small businesses astounds me.

Whiteskifreak Surrey

9:42 AM, 2nd December 2016, About 7 years ago

Whiteskifreak Surrey

21:54 PM, 11th December 2016, About 7 years ago

Good comments about BTL in this article on the Conservative Home web site by Lord Flight, former Shadow Chief Secretary to the Treasury:
http://www.conservativehome.com/thecolumnists/2016/12/howard-flight-we-are-spending-too-much-on-health-education-and-welfare.html

Not all comments are in favour of BTL, but some seem to understand the problem. Sadly I am not sure if anyone in the Government is listening...

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