9:28 AM, 1st April 2019, About 2 years ago 8
If HM Government (HMG) wishes to halt the mass exodus by Private Sector Landlords then it must Organise the Tax System in a more Businesslike Fashion. The first thing it needs to do is to restore Tax Relief on BTL Mortgage Payments to the Headline Rate. In simple English whatever rate the Landlord pays that is applied to the entirety of the Mortgage Interest.
The next thing it needs to do is to have a level playing field so that Companies and Non Company Landlords pay the same rate of 10%. Entrepreneurs’ relief is currently 10%.
The 3% stamp duty for BTL properties should be scraped. If HMG wants more landlords they need to incentivise Landlords not dis-incentivise landlords.
The average landlord has slightly more than one BTL house. Under two. He is not going to set up a Company! It is pie in the sky from Whitehall Mandarins who do not understand the Letting Industry. Whatever HMG wants then it must give an incentive. For instance if three year shorthold tenancies are required then common sense must prevail.
Firstly, not all tenants what a three-year commitment. Most do not, but some do. These are particularly tenants with children. There must be a willing landlord and a willing tenant, but HMG must marry this up with a three year fixed term mortgage. The nuts and bolts are for later.
I suggest to HMG that to incentivise this any landlord taking tenants with children should be given a further 1% discount per tenancy year on his Capital Gains for that Specific House.
Secondly there is the issue of Domestic Abuse. If a landlord takes a Domestic Abuse victim he has to pay out the mortgage, but receives no income from Housing Benefit for months. Again there should be a 1% discount on GCT as above.
However, HMG must provide a “Guarantee” from day one which pays in advance like a normal tenant. The day the tenant moves in then HMG pays the rent for that month. The tenant then repays the Guarantor. Whether this is via a contra credit of Housing Benefit or of Universal Credit is not a matter for the landlord. HMG must underwrite the payment delay problem. If HMG wishes to prevent further Domestic Abuse then it is within its gift! Man landed on the moon in 1969! It is not beyond the wit of man to dream up an acceptable mechanism for resolving the problem of Domestic Abuse!
Thirdly the problem of Zero Hours Contracts. It is a matter for HMG. If it were to make Zero Hours contracts unlawful then how many workers would lose their jobs! It is a balancing Act for HMG not for the Private Sector Landlord.
If HMG wants PLSs to take them then incentivise and provide a payment from day one guarantee.
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