Summer Budget 2015 – Landlords Reactions

It would be good if we could find a way of getting our tenants on our side. One way of doing this is to encourage them to write to their MPs expressing their concern. Here is a template that could be used.

Dear MP

Restricting finance cost relief for individual landlords

I am a tenant in the private rented sector and have heard about the Government’s proposal to restrict finance cost relief for individual landlords.

My landlord has explained to me the consequences of this measure for landlords and I am concerned that my landlord may need to significantly increase my rent or sell my home to pay the much higher tax bill that he/she will be required to pay.

I understand from my landlord that there is a very real risk of the supply of private rented housing declining as a result of the Government’s proposal and that some landlord’s could be made bankrupt. At a time when many people cannot afford to buy a home and there is a limited supply of social housing, the Government should be supporting the private rented sector, not bringing forward proposals that will restrict supply and possibly result in some tenants being made homeless.

Renting privately is my tenure of choice as I like the flexibility it offers. The Government’s proposal to restrict finance cost relief is causing uncertainty for landlords and tenants and I would ask you to take the matter up directly with the Chancellor and ask that he withdraws his proposal.

I look forward to hearing from you.

BTL...good idea in principal but this could potentially backfire as this may instigate chancellor to Cap current rents in which case we may get clobbered.

"Every cloud has it's own silver lining"

We do need to make the point strongly that in being driven by taxation to sell, we will need to secure vacant possession in order to receive a decent selling price (open market rather than the vestiges of the 'destroyed' private landlord market).

Therefore a mass of tenants will be out on their ear solely as a result of government taxation changes.

Reply to the comment left by "Lorraine W" at "26/07/2015 - 03:12":

Good point Lorraine.

Going further, between 1986 and 2012, 57 per cent of all new dwellings created were private homes to rent.*

They were built to let.

How many landlords will be buying new builds in future?

*http://www.cityam.com/220861/bashing-buy-let-landlords-will-push-rents-and-hit-uk-economy-hard

Reply to the comment left by "BTL INVESTOR SCOTLAND" at "26/07/2015 - 07:32":

Thanks BTL.
A few points have been made earlier on this thread which are relevant.
1. That the petition shouldn't have any organisation's name on it, but just be the usual 'we, the undersigned.'
2. As it could be extremely important, we need as much consensus as possible on the wording.
3. I came up with the expression 'landlord tax,' but others came up with some better ideas, leading on from this - like 'turnover tax', 'confiscatory tax' and so on - and these were good because it was felt, rightly, that if the word 'landlord' was in it, fewer people would have sympathy for it... I'm not sure this is the same, however, with regard to the petition - it depends if we are going to try and get other groups/individuals who are not our natural allies to sign it....
We have some time, so we can iron out these things so make the petition the best it can be. Thanks for passing it on to your association in Scotland.

Reply to the comment left by "Lorraine W" at "26/07/2015 - 03:12":

Yes, Lorraine, my experience is the same. We have a combination of tenants who could probably never afford to buy and have never expressed that ambition and/or young people who are far from wanting to commit to one area - notably students and tenants in their 20s in general.
I think the Government often acts with London in mind and applies their conclusions to the rest of the country.
There needs to be proper research (not little questionnaires producing simplistic statistics) - the whole issue of FTBs or would-be FTBs, owner-occupiers and renters... I think the Government is making yet another false assumption, as you say, that all renters want to buy.
And, like you, we have never been in any competition with first time buyers and we have often spent months sorting out decrepit houses to get them fit to rent. The only time I remember being in competition with anyone (and the estate agent was clever, lining up viewings so that we'd see the next potential buyer as we left!) was in larger student-type accommodation where only other BTL investors would be interested.

Reply to the comment left by "BTL INVESTOR SCOTLAND" at "26/07/2015 - 07:57":

Yet more lateral thinking BTL! I will have a think about which tenants would be the best ones to approach. There is a thin line between getting them to help with this and unsettling them. Someone on this site told two sets of tenants she was going to have to put the rents up as a result of this policy and they promptly gave notice!
But your idea has led me on to another one, which I think is also really good (I don't believe in false modesty); namely, to phrase the e-petition in such a way that we can get tenants to sign it too! That will massively increase the numbers we can get. So, we just have to include a phrase about the rent rises, bankruptcies etc which lead to tenants possibly being homeless (can't think clearly yet - need my caffeine). Anyway, I think this is an exciting way to go and your letter to tenants' idea is what led me to this one. Teamwork!

Shouldn't the e-petition be worded to appeal to homeowners, landlords and tenants ? That way it will be much easier to exceed 100,000 signatures. Every landlord has at least one tenant so that more than doubles the figures immediately. Every landlord also knows homeowners.

People sign petition due to a fear of loss, I think we should play on that ....

Homeowners could be trapped in negative equity if property prices crash

Renters will struggle to find property to rent, hence rents are likely rise rise in line with demand. Less social housing will be developed if landlords are discouraged from investing into new build property.

Landlords ........ well I don't think I need to spell that one out!
.

I have heard some rumours that, Osborne is contemplating to Tax the whole of value of property going forward as opposed to pure "Capital Gains"

Example, you bought the property for £200K...and sold for £300k, he would look to Tax you for whole £300k as opposed to £100k profit!

In other words, he is contemplating to confiscate all buy to let properties. As he is aware that, there is a huge wealth locked in property which he wishes to exploit by hook and crook.