Should I sell or risk tenants buying at undervalue price?9:08 AM, 25th September 2019
About 4 weeks ago 48
Is it possible that corporate landlords could have ‘moles’ in The House of Commons?
Politicians with a vested interest?
The MP for South Suffolk has set about framing working and middle class buy-to-let landlords as mass property-hoarding despots, in place of institutional investors obtaining and letting properties on a truly industrial scale.
Were his intentions entirely honourable?
Judge for yourself based on this evidence ….
At 6:30pm on the 9th February 2016, James Cartlidge MP stood before the House of Commons to announce this:
“We have recently heard a prediction from the National Landlords Association that 500,000 extra properties will come on to the market this year because of the buy-to-let tax changes and other changes that we are bringing in. I will put my neck on the line here and say that those measures represent the single most radical change that this Government have introduced so far, in the light of the wider impact that they will have.” – source
Were 500,000 properties to come on to the market this year as a result of buy-to-let tax changes, the process behind it would be thus: coerced by wholly unaffordable tax bills, buy-to-let landlords would have evicted their tenants, to whom these 500,000 properties would have been homes, and engaged in a mass panic sale. According to the ONS, the average rental property in England and Wales is occupied by 2.3 tenants – source. Such an average therefore entails that this boasted “radical change” –shamelessly spun here to resemble the creation of 500,000 brand new dwellings – would have caused the eviction of 1’150’000 tenants in 2016 alone!
Of further significant note is that those landlords forced to sell-up, will be those housing tenants unable to pay higher rents. This means that the aforementioned evictions will be concentrated among the United Kingdom’s poorest renters. Possessing neither the incomes, deposits nor credit records to buy their own home, renters ejected from private accommodation by Clause 24, will be shifted on to already overburdened social housing waiting lists.
Apparently unconcerned by over 1.1 million tenants losing their homes, Mr Cartlidge then proceeded to declare his outrage towards parties acting to avert such a disaster he went on to say:
“It is extraordinary to note, however, that just as it appears that those changes could have an impact, someone out there is going to go to court to try to stop them. I am of course talking about Cherie Blair. Looking at Blair Inc., we see that when Tony Blair finished as Prime Minister, he went round the world advising dodgy dictatorships, and that Cherie Blair is now going to lead a court action on behalf of, and defending, the rentiers. That is an interesting legacy indeed. It proves that champagne socialism is not yet dead.”
Sadly, stereotyping landlords is not a solution to a shortage of affordable homes. So I believe it fair to suggest that this may not be the motive behind such a statement from this Conservative MP. Yet even so, Cartlidge’s diatribe pulls no punches, equating working and middle-class individual landlords to champagne-gulping, third-world dictators in bed with the Blair family.
As the founder of Share to Buy, James Cartlidge knows full well that the overwhelming majority of buy-to-let landlords, on whose behalf Cherie Blair’s Omnia will be acting, do not accord to such absurd stereotypes: the wealthiest landlords – corporate providers and cash buyers – are going to be excluded entirely from paying more tax as a result of Clause 24 of the Finance Act. The reason for such parliamentary propaganda is that MPs, like James Cartlidge, are desiring for average, unincorporated landlords to be driven out of business, and are recycling unfounded anti-landlord bigotry to achieve this very objective. Moreover, there is no better target for such vilification by politicians, than those very landlords to whom such caricatures do not apply: those landlords able neither to donate six-figure sums to the Conservative party nor be represented by their associates in the chamber. Hence the deliberate bias of the Finance Act towards institutions making such donations and infiltrating the party ranks with their shareholders in the first place.
“What the FCA has done on mortgage rules and on the property market has been for the good. We need prudential borrowing. I am a conservative on financial services and think that we were far too reckless in the build-up to the crunch. If we want fairness, we must recognise that asking first-time buyers to be so heavily regulated, while a buy-to-let applicant for a mortgage faces no regulation and can take out an interest-only mortgage for a huge amount of money, without a key facts illustration that has to be advised, regulated and so on, is deeply unfair.” – source
Were James Cartlidge a different MP, I’d ask in response to such a statement if he had ever heard of the rental coverage ratios, maximum loan to value ratios and higher interest rates that BTL Lenders apply; along with the legionella, gas safety and electrical checks to which landlords must adhere. But I believe that, in light his property-based career, Cartlidge is both aware of their existence and of his above claim being totally false because of them. Neither fact would have mattered to the man, for accuracy was never the motive of such an utterance. Its purpose was purely to rouse his parliamentary colleagues to think with their emotions and attack individual landlords.
While having plenty to say of a perceived unfairness between individual landlords and owner-occupiers, Cartlidge is predictably silent on unfairness in the context of corporate landlords. Whether comparing corporate landlords to individual landlords, or corporate landlords to owner-occupiers, he has nothing to say of the very real unfairness and anti-competitiveness of institutional “rentiers” being uniquely permitted by the Treasury to continue deducting mortgage interest from their tax liabilities. Cartlidge is also silent on the unfairness of Share to Buy, the company he founded and maintains a significant shareholding of, running council-protected monopolies in a number of London Boroughs.
Conservative led Richmond Council has partnered with the Share to Buy portal as part of its “First Steps” campaign to advertise properties to own and rent among members of the Council’s constituency. As part of this campaign, Share to Buy describes itself as “the official website where you can find affordable homes to buy and rent in Richmond and across London” Source. Wandsworth Council (also Conservative led) provides on its website a detailed section dedicated to informing its users of the Share to Buy portal, and the processes associated with its service Source. As part of this joint enterprise, Wandsworth Council compiles and administers a waiting list of clients to whom Share to Buy market their available properties. The Council’s own website explains “When a development is ready to be marketed, the housing provider will request a nomination list from the council. The council compiles the nomination list from people who have signed up to the home ownership register” Source. Such partnerships involving Share to Buy are commonplace throughout London, with numerous councils linking their website users to the portal. These include Brent, Southwark, Lewisham, Kingston, Barnet, Tower Hamlets, Waltham Forest, Redbridge and many more.
The issue with James Cartlidge boils down to this: Individual private landlords, currently responsible for housing vast numbers of Britain’s poorest tenants and advertising via other mainstream web portals, are Share to Buy’s primary competition within the rental sector. Meanwhile, the founder of Share to Buy is, in his capacity as MP for South Suffolk, and within multiple Commons’ debates on housing and planning, actively supporting a policy widely expected (including by himself) to force those very same competing landlords to evict their tenants and sell-up. Such an outcome will naturally drive poorer renters out of the private rental sector and on to council housing waiting lists, channelling them through the Share to Buy portal in ever greater numbers. Good for Share to Buy, but bad for councils with inadequate housing supply and worse for tenants left chasing fewer available rental properties.
Moreover, as tenants seek to retain the same roof over their head, in spite of Clause 24 driving their respective landlords from the rental sector, the market for Share to Buy mortgages – which Share to Buy’s brokerage arms just happens to specialise in purveying – will undoubtedly be stimulated – source.
It appears then that James Cartlidge is rather more informed of the realities of Clause 24 than his comments in the House of Commons would indicate. It also appears that the MP for Suffolk and founder of Share to Buy stands to profit significantly from this ultimately destructive tax grab. Worse still, rather than operating alone, this individual is one of a bunch of Conservative MPs and donors, applauding their patriarch, George Osborne, and the predatory fiscal policy designed to skew the private rental sector in their favour that he so willingly bestows.
Viewed in isolation, James Cartlidge’s comparison of working and middle-class landlords to “dodgy dictators”, and his insinuation of Cherie Blair acting as an agent of the corrupt, can be taken as pathetic political bandwagoning. But it is upon consideration of Cartlidge’s extra-parliamentary background, that his pronouncements in the Commons become worthy of serious concern. James Cartlidge’s contributions as MP for Suffolk are symptomatic of a suborned and deceitful Tory government.
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