Open Letter To Grant Shapps and the BBC – Clause 24

Open Letter To Grant Shapps and the BBC – Clause 24

22:17 PM, 22nd January 2016, About 6 years ago 66

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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

by Gareth Wilson

15:34 PM, 20th February 2016, About 6 years ago

This will probably be THE letter from David Gauke, featuring the disgraceful point that you have 4 years to make the necessary "difficult decisions". . . decisions that a tax levied upon law abiding citizens should never be forcing them to make in the first place.

That letter will confirm the arrogance, immorality and backstabbing of himself and Treasury... and that Shapps is a spineless waste of space.

by Barry Fitzpatrick

16:02 PM, 20th February 2016, About 6 years ago

@Rachel,

A great initial letter and rebuttal.

Regrettably the responses are falling into the same pattern as everyone else, with the MP concerned acting only as "messenger boy" as they don't want to challenge GO (and possibly jeopardise a Cabinet/Ministerial position if GO ever becomes PM, God help us).

It took about 4-5 weeks to get respsonses back from David Gauke despite that fact they were just "standard" responses.

by Rachel Hodge

17:05 PM, 20th February 2016, About 6 years ago

Agree with you Gareth and Barry.

However, boosted by the information being posted on this site, together with my own experience and circumstances, and the updates from the Judicial Review, I will keep replying to the responses I get, with specific questions, so that they find it increasingly difficult to cover up the agenda behind clause 24 and the hike in stamp duty.

The agenda is the transfer of the PRS to corporate institutions.

It would be soul destroying if I felt I was doing this alone as my actions are insignificant in isolation, but as part of a mass movement and rebellion against the government and clause 24, it feels like my efforts are worth it!

by Steve Wood

17:24 PM, 20th February 2016, About 6 years ago

Dead Rachel
You and others have done a great job and if the reply does not address these points then hopefully the media may be interested?
This policy is hard to understand from the perspective of the housing issues. It is not the PRS that has caused any issues. We have responded where as the government have come up with schemes that are hard to work out. (Yes we are trying to better ourselves too). Everyone should be furious at their constant lack of attention to this area over many years. Build houses. Supply the demand. Stop selling off houses you own for below market value. Work with us. We return houses to the market that are not fit, at our own risk, and increase housing stock. Roofs over heads. I am a very small scale developer. I create homes. It's not easy. It takes hard work and risk. Yet we get dumped on from a great height.
Keep your chin up and we will all continue to fight.
Our resolve will strengthen. Hats off to the boys behind the challenge and mark and his team - and of course a big thank you to all working hard. The regulars on here and all supporting the fight. Sometimes it gets you down. But we must push on. We may need to consider direct action on the streets to demonstrate too.
Steve

by Dave Baker

18:28 PM, 20th February 2016, About 6 years ago

...wow action on the streets. Can't see us getting much sympathy from Joe Public on that one. The media has done such a good hatchet job of late I'm looking in the mirror to see if there are little horns growing out the back of my head.
In realty I house around 30 people in quality accommodation and for that effort not to mention the responsibility I get enough to live on. Just about to re-let one of my flats at a new C24 rent, a 10% increase. Should be interesting to see if the market can stand it.

by Steve Wood

18:48 PM, 20th February 2016, About 6 years ago

This tax change infuriates me. I would take part in organised protests. Also, the bull they come up with regarding digitalising tax returns being good. I am sure a few self employed will be ranting soon when they understand the impact that will have on them and you all as landlords. As for the action on the streets, maybe a few signs set up alongside the homeless explaining why the lack of rental properties due to private sector landlords having been taxed to the hilt and beyond in an unfair and discriminatory manner?? It's more about tax unfairness and also also countering the bullxxxx they peddle. They can't even engage in an debate / discussion as they peddle the party nonsense/line. This government disgusts me on this matter

by Steve Wood

19:00 PM, 20th February 2016, About 6 years ago

Maybe not the signs..last post. But honestly, landlords that make hmos for an example create so many safe, nice homes. Family homes,
Flats etc all get made available as we can do so knowing if we make a profit we are taxed on it at what rates we pay and if we make no profit or losses we pay no tax. As it is now/was. So we do need to get this across to the public in all forms about the changes.

There are so many examples of tax and public spending discrimination. I hope we beat this unfair tax. Also the 3% sdlt levy needs stopping too.

I have great simpathy for anyone having to live on the streets and it is horrible seeing it increase as it is now. Change is happening.

by Mark Shine

19:08 PM, 20th February 2016, About 6 years ago

Reply to the comment left by "Rachel Hodge" at "20/02/2016 - 17:05":

Rachel – very good efforts. I hope that you don’t just get the standard David Gauke letter back. Although as Gareth and Barry suggest, I also suspect you may. Many of us have already received ‘the’ letter.

Regardless of what the Judicial Review achieves, I hope it will at least eventually put pressure on the govt to finally drop ‘the’ standard letter (and the devious / simplistic spin it blatantly contains).

And expose GO/DG's equally blatant *not so hidden* agenda.

by Luke P

19:23 PM, 20th February 2016, About 6 years ago

Reply to the comment left by "Mark Shine" at "20/02/2016 - 19:08":

Personally I want out of the EU, but I fear the Judicial Review (by Govt. appointed Judges) will prove fruitless. I do however expect we could push on to the European Courts where I believe we have the best chance of success. If we leave come June, we could be out of options -what is the next step if JR fails?

by Andy Loveday

19:48 PM, 20th February 2016, About 6 years ago

Great letter Rachel,

I plan to use elements of the letter in my engagement with the prospective MSP's in the up and coming elections in Scotland.

More specifically I have posted the following on social media:

Don’t Vote for Crisis.

Private Rental Sector reforms and property taxes have been some of the key areas of UK Government and Scottish Government intervention and debate in the period since the General Election last year.

Both have prompted a significant amount of noise.

That noise is increasing in volume… like an intro to an AC/DC concert!!

The ongoing challenge to Clause 24, announced by George Osborne in the 2015 Summer Budget, in particular, has galvanized investors in the Private Rental Sector to find voice and served to send a clear signal to the Chancellor that all is not well and, more importantly, fair.

That noise is, as I write, gathering momentum.

There is, however, a greater noise… and a noise that is even more deafening by its absence. That noise is Housing Provision.

Today, there is a clear need to build the new homes that ordinary families will be able to afford to buy and social rented homes that those in social housing need seek to rent.

The Private Rental Sector is not, and should not, in my view, be a fix for that same challenge. The Private Rental Sector simply provides an alternative, and necessary provision, for individuals that choose to benefit from that same provision.

The housing crisis, and it is a crisis, is going to be difficult to tackle. It will take time, money and, more importantly, political will.

The starting point, in my view, is political will.

May 2016 is a key date in our diary. The Scottish Elections.

Crime, education, immigration, the economy, and, more recently, Independence have found a greater voice and taken centre stage, both at the point of the elections, and in the period since the last elections in 2011.

Housing Provision, however, is in a different place, both in supply, and electorally, to where it was in 2011.

It’s now time for Housing Provision to find its voice.

That voice can, and will, only come from your voice.

Whilst acknowledging that improvements in both the Private Rental Sector and Social Housing are both desirable and necessary… we must not lose sight of the fact that Housing Provision remains the underlying factor in our determination, as an electorate, to secure greater home ownership and greater social provision.

Your vote in the May Election in Scotland is a key start point.

Clearly, as outlined above, there are many factors to consider in casting your vote in May….. That said, in my view, a vote without due consideration to the increasing, and alarming lack of Housing Provision, is a vote for crisis.

Don’t vote for crisis… vote for Housing Provision.

Time to find your voice?

Over the next few weeks, I will attempt to seek clarification on the determination of each Party to address the issue of Housing Provision.

I will keep you updated.

Together, we can make more noise than AC/DC!!


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