Open Letter To Grant Shapps and the BBC – Clause 24

by Rachel Hodge

22:17 PM, 22nd January 2016
About 3 years ago

Open Letter To Grant Shapps and the BBC – Clause 24

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Open Letter To Grant Shapps and the BBC – Clause 24

I’ve shared this email to my MP, Grant Shapps, on another thread where a prominent poster has suggested that I post it on a new discussion. Open Letter To Grant Shapps and the BBC - Clause 24

I emailed Grant Shapps on 7th January 2016. He acknowledged, but I received no further reply. I emailed him yesterday morning giving him the chance to reply, and informed him that I would be sending it to the BBC today (22/01/16).

“Dear Grant

I voted Tory at the last election. I’ve always considered myself a classic Tory voter, although I have voted for other parties in two elections: Blair, unfortunately wooed me first time round, and the coalition was partly down to me. Other than that, I’ve always voted Tory.

I’ve always found politics a pretty frustrating field where anyone can promise what they want and do something else and not be held to account. A manifesto can only be relied upon as a hugely inflated list of things a party will dream up in order to attract voters. Why on earth we haven’t a system in place which renders a manifesto something like a contractual offer where there are penalties if promises are broken is beyond me. It’s no wonder the electorate is so utterly fed-up with politicians and all parties. Nothing a politician or party says can be relied upon, which makes a mockery of democracy. I choose who to vote for based on what they tell me they stand for and what is written in their manifesto.

Since the last election, I have regretted my vote more than at any other time in my life, for both local and national elections. I took time to read the summary manifestos for the three parties I would consider voting for so that I could make the best choice for me, my family and the nation. No one party was going to offer everything to suit me, but as usual, the Tories were going to allow me to continue to work hard, invest in property for my future pension provisions as a sideline, and would probably handle the economy better than any other party.

The first decision George Osborne made which angered me was the abolition of tax credits for working people. I don’t get tax credits, despite being a single parent due to me just about breaking into the 40% tax bracket, but one thing I’m very happy for my taxes to be spent on is help for those who strive to work to make ends meet rather than staying on full welfare. I cannot for the life of me work out how this was ever considered by the Tory party. Aren’t you supposed to be encouraging people back to work? The most sickening part was the disingenuous clap-trap being spouted by GO and the party of how this would be set-off against increases in minimum wage. Many of these people were struggling anyway, how one earth would an immediate cut in tax credits be alleviated by increase in minimum wage in a few years? How many people on tax credits are above the minimum wage anyway?

The welfare slashes to the Disabled and Elderly are sickening. I don’t know enough about these to comment.

As mentioned, I’m a single parent with a job. Since I don’t have a pension, 4 years ago I entered into property investment via let-to-buy and downgrading my living arrangements. The following year I moved again, and let out a second home. This has stretched me financially, but no more than I had planned and it is all part of my strategy to provide for myself in the future, and my son through university.

I have excellent tenants in both properties. One family have been with me for just over two years. They are in their 50s and their grown up son lives with them. They have good jobs – she is a nurse, he is a plumber. I believe the son is an electrician. They moved into my house after having their home repossessed. I was extremely nervous about taking them on, but luckily, it has proved to be a very good decision. They love their home, and I’m very happy to have them looking after it. I have not increased their rent since they’ve been here as I had no reason to do so. My costs hadn’t increased significantly, and a good tenant is worth looking after and hanging on to. Unfortunately, due to the tax changes being brought in, I will be notifying them of a rent rise this month, which will reflect rent rises by corporate LLs in the area, approximately 10% for the period. In the notice of rent rise, I will be explaining exactly why I’m doing this. Every single LL I know will be doing the same. With just two properties, since I am in the 40% tax band, and I will now be paying tax on £19K on mortgages per year, I will have to keep rents bang up to the maximum the market permits. Since demand for rental is so high, and my properties are lovely, I foresee no problems with retaining or replacing tenants if they chose to move due to rent rises.

My second tenants are new to me since August. They seem lovely, and were desperate to move into my home and I was delighted they cleared all the checks and referencing. They were worried as they had some concern about their credit history due to some missed CC payments. I don’t know why they choose to rent, but they were at their last rented property for 23 years, and only chose to move as the LL was selling. They have good jobs – she works in a hospice, and he is a football scout. I had no intention of increasing their rent as I want them to stay with me as long as possible, but I will now be increasing rents annually in accordance with the Housing Act.

Do you think either of my tenants could secure mortgages if they wanted to?

I hope I will be able to make the finances work after clause 24 through rent increases, and possible remortgaging (I certainly can’t work any harder), but if not then I will need to evict my tenants and sell my properties. That’s two families evicted and me with no pension provision for the future. That really was not what I expected as the outcome of me voting Tory.

I know directly, and indirectly through social media, hundreds of LLs, and we are all good LLs, intent on looking after our tenants, complying with continual changes in legislation, and paying our taxes on income (profit) fairly.

No LL I know understands the logic behind C24. What particularly puzzles me is that Tories traditionally support those who want to work hard and provide for themselves, as well as encouraging entrepreneurialism. After all, we all know that stimulating the micro economy boosts the macro economy.

But what sickens me (and I’m not overemphasising that) is the absolute discrimination in favour of the wealthy elite and large corporations. This is what the Tories now stand for! Corporations are exempt from the policy as are those with more than 15 properties! I’m speechless! What formula was used to calculate the 15 property exemption number? Is that the minimum number of properties the average Tory MP owns? Certainly Osborne and his family who have benefitted very well in their property investments from some Maverick tax avoidance.

In summary, I’d like to point out, through my experience and knowledge of the sector, the effects of c24:

  1. Rents WILL rise. The RICS estimates by 25% by 2020. I think that’s a fair average. Many LLs like myself with good tenants may introduce higher rent rises than that to catch up with the market.
  2. Tenants will be evicted as some LLs will sell some properties. This may be simply because they choose to get out of the game since it is no longer profitable, or because being taxed on turnover will actually push them into a deficit. These LLs were operating on tight margins anyway, and interest rises may have eventually hit them, but it’s still stress and upheaval for tenants.
  3. Corporations will buy up rental stock sold off from the PRS. Corporate LLs will absolutely maximise profits and increase rents as much as the market permits.
  4. Hundreds of thousands of PAYE workers like me will chose to opt out of the market as it is no longer a viable pension investment option. That means hundreds of thousands of people without pension provisions in the future. Further pressure on that deafeningly loud tick of the pension time bomb that this country will very soon be unable to ignore, like your government is doing.
  5.  There will be NO increase in housing stock. But there will be a further shortage of housing for families like my tenants who cannot buy as they are unable to secure mortgages. What is to happen to them? Temporary accommodation or LA social housing? We don’t have enough of that, and the council certainly couldn’t afford it. There will be a catastrophic effect on the social housing sector directly as a result of this policy and its decimation of the private rental sector. 
  6. The loss of the next election for Tories. Unless there are fundamental changes, and a return to the core values and policies of the Tory party, I will not be voting for you again. Of the estimated 3m LLs in this country, I’d say a good 50% of them must be straight forward Tory voters. Not anymore. The LL community it absolutely outraged at clause 24. Many many have said that they will never vote Tory again. I chose Tory last time as they offered the best for me and the nation; now you attack everyone including the poor, the sick, the elderly and middle income core Tories like me. The only people the Tories look after are the extremely wealthy and big business. The Bullingdon Club Party.

I understand the need to steady the housing market, and make it easier, or even possible for first time buyers to get onto the housing ladder, but clause 24 is not going to do either. It’s so badly thought out, in fact, I struggle to believe it was thought through at all. The only benefit it will bring is to the wealthy elite and big corporations due to the competitive advantage it will give them through tax advantages over the little players like me.

Yours sincerely,

Rachel Hodge
ex-Tory voter”



Comments

Mark Alexander

22:27 PM, 22nd January 2016
About 3 years ago

Superb letter Rachel, no wonder you got so many 'likes' when you first posted it as a comment on the Summer Budget thread 🙂

I hope this will inspire many more landlords to take time to write to their own MP's, again if they have already done so.

If I continue to harass my own MP as much I have been doing over the last 6 months he will probably get a restraining order against me! LOL

Bring it on 😀 😀 😀
.

Dr Rosalind Beck

22:34 PM, 22nd January 2016
About 3 years ago

Brilliant letter, Rachel.
What would be good is if you could also arrange to go and see Mr Shapps at his surgery - I sent 5 letters to my (Labour) MP but it was only when I went to see him, showed him Richard Dyson's article on the 'Alice in Wonderland' tax and showed him my spreadsheets regarding the devastating effects of Clause 24 that he understood, was shocked and then was supportive and told me which members of the Labour shadow Cabinet I should target etc. - and that turned out to be useful.

I found your bit about how manifestos should be contractually binding particularly powerful.

All the best with your campaigning. You clearly know how to write a great letter and the pen is mightier than the sword!

Rachel Hodge

9:12 AM, 23rd January 2016
About 3 years ago

Thanks very much both.

I'd advise anyone who hasn't already done so to email their MP letting them know how they feel about Clause 24, and how it will affect them and their tenants. I found it very cathartic to get it all off my chest.

Grant Shapps is trending this morning, so I've tweeted a link to this page.

Mark Alexander

9:23 AM, 23rd January 2016
About 3 years ago

Reply to the comment left by "Rachel Hodge" at "23/01/2016 - 09:12":

Hi Rachel

Did you know that you can embed Tweets into comments?

If you embed you we can re-tweet directly from this page.

To embed a Tweet, find your Tweet, on the line below your Tweet where you would find icons for retweet, favourite etc. You will also see an icon with three dots. Click that and it will open up a menu. Click on embed tweet and then copy the code. When you past that code as a comment on Property118 it makes you Tweet live on our website. As people retweet you will also see the number of RT's showing right here on Property118. You can't do that on many other forums 😉
.

Paul Temple

14:34 PM, 23rd January 2016
About 3 years ago

Para 3 of Rachel's letter could be a particularly strong persuasive argument to highlight to both parties.

“Mr MP, Clause 24 and the other attacks on private landlords are going to drive more and more properties into the hands of corporate landlords. Do you think faceless, corporate landlords are going to act in a fashion that is beneficial to individuals and the country as a whole, or do you think they will just focus on bottom line profits? How do you think that will make your constituent feel?”

Demented Landlord

15:42 PM, 23rd January 2016
About 3 years ago

That`s a fab letter and I hope it gets the publicity it deserves Rachel.

Could anyone enlighten me as to the exemption of 15 property's rule ?

Andy Beach

20:33 PM, 24th January 2016
About 3 years ago

Excellent letter, I will certainly be writing to my MP.

I feel exactly the same, however what I do not understand is why more landlords have not already signed this petition https://petition.parliament.uk/petitions/104880

We now only have a few days left to get it over 100,000 signatures, I have emailed it to literally thousands of letting agents asking them to send it to landlords but I suspect they have not or there would be more signatures on there.

r d

20:58 PM, 24th January 2016
About 3 years ago

Owners of 15+ B2l properties are exempt from Clause 24?

Does anyone have an official link for this?

Thanks

Yvette Vincent

21:13 PM, 24th January 2016
About 3 years ago

Very good letter Rachel. I too will be writing to my local MP and to the BBC. It might be useful to know to which particular dept or person did you write to at the BBC? If that person or dept get so many letters about the same subject, it may cajole them into activity.

I too have voted tori all my life but will not do so again if some kind of common sense does not return.

Kind Regards

Rachel Hodge

21:38 PM, 24th January 2016
About 3 years ago

Reply to the comment left by "Yvette Vincent" at "24/01/2016 - 21:13":

Hi there Yvette and Andy

Please do write to your MPs.

I took some time to digest my thoughts and think about the effect it was going to have on me and my tenants, and my thoughts were ripe when I wrote.

I'm more than happy for anyone to plagiarise and amend to make it suit.

Andy - it is frustrating, but hundreds of thousands may still not be aware of the impacts, but they will become aware following their April 2016 - 2017 tax returns ... then all hell will break loose!

I think we just have to carry on, and of course back and support the judicial review.

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