Extra Tax On Landlords Will Hurt Agents More Than Chancellors Ban On Tenants Fees

by Mark Alexander

8:12 AM, 24th November 2016
About 2 years ago

Extra Tax On Landlords Will Hurt Agents More Than Chancellors Ban On Tenants Fees

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Extra Tax On Landlords Will Hurt Agents More Than Chancellors Ban On Tenants Fees

Letting agents who are arguing about the ban on charging fees to tenants are still failing to recognise this isn’t the biggest threat to their business.

Property118 “The Landlords Union” launched a survey of landlords within minutes of the Chancellor delivering his Autumn Statement. Nearly 500 landlords responded within 18 hours and the results are still coming in fast.

Initial findings are that 53% of landlords intend to sell rental properties as a consequence of there being no repeal of the legislation introduced by George Osborne to disallow mortgage interest as a legitimate business expense for private landlords only. The poll also shows that 81% of landlords are planning to increase rents to pay the additional tax or to fund the costs of restructuring the ownership of their business.

It is reduction in the supply of rental properties that will hit letting agents hardest, NOT their ability to pass on fees to landlords.

Property118 Survey

Link to survey and live results.

Extra commission earned from even higher rents caused by the tax changes might help to offset the loss of fee income for agents but it is the number of properties they will have available to rent which should be worrying them most. Agents also need to realise that scope for landlords to increase will also be under pressure from April 2017 when the passed removal of finance costs as a legitimate business expense is removed. Passing on extra costs to landlords issn’t really an option for agents as this will merely encourage landlords to shop around for better deals.



Comments

Dr Rosalind Beck

9:13 AM, 24th November 2016
About 2 years ago

Yes, letting agents have been very slow to realise the impact of Section 24. In the months following the Summer Budget our attempts to even get them to circulate the petition against s24 fell on deaf ears. This move will wake them up though. They can see what it feels like to have their businesses directly attacked by Government and with no consultation as usual (they're being offered 'post announcement consultation' as we were - which is a very annoying development.

James Fraser

10:10 AM, 24th November 2016
About 2 years ago

Exactly this, Ros. When I think of all the foot-slogging and miles I put in visiting letting agents personally to explain S24 to them and they were, to a man, utterly disinterested.

Yeah? How'd they like it NOW?!

Gary Nock

12:28 PM, 24th November 2016
About 2 years ago

Well as a landlord and letting agent I am feeling pretty bruised at the moment!

Kelly Joanna

9:42 AM, 25th November 2016
About 2 years ago

I am a letting agent and I supported Section 24. This has a direct effect on our livelihood. The corporates likely don't give a stuff because the costs will not affect them massively, as they 9 times out of 10 have sales departments as a back up.

Dr Rosalind Beck

10:07 AM, 25th November 2016
About 2 years ago

Reply to the comment left by "Kelly Joanna" at "25/11/2016 - 09:42":

Hi Kelly. Do you mean you supported Section 24 or that you supported the campaign against it?

Gary Dully

11:25 AM, 25th November 2016
About 2 years ago

The next thing will be rent controls, quickly followed by a mass panic sell off by the smaller landlords.

Dr Rosalind Beck

13:51 PM, 25th November 2016
About 2 years ago

Reply to the comment left by "Gary Dully" at "25/11/2016 - 11:25":

No, Gary. Think positive. The world is a strange place now and I predict that there will be a u-turn sooner or later and we landlords will start to be treated the way we deserve to be - with respect and gratitude for the work we do and the risks we take in providing essential housing to the tenants of this country. I actually think that that is how Gavin Barwell sees us and from little seeds grow big trees.

Simon Griffith

14:13 PM, 25th November 2016
About 2 years ago

Hi Ros. Bless your optimism and thank you for all your hard work. Alas I can't agree with you on your last post though. The government and other parties continue to make themselves abundantly clear and it must get very, very bad before they will even notice a problem. This doesn't mean we should stop trying though. of course not. Sadly Hammond has shown in his autumn statement how much influence we can expect from Gavin. Perhaps though some good will come of the attack on the letting agents as they come on side more.

Kelly Joanna

15:17 PM, 25th November 2016
About 2 years ago

Reply to the comment left by "Dr Rosalind Beck" at "25/11/2016 - 10:07":

the campaign against it. And we donated money as well to the cause...

Dr Rosalind Beck

15:43 PM, 25th November 2016
About 2 years ago

Reply to the comment left by "Kelly Joanna" at "25/11/2016 - 15:17":

Thanks for clearing that one up, Joanna.

Re the letting agents I am wondering if, when the full details are published, they might be able to take the Government to court. Can anyone think of a similar kind of Government interference in a business where they have completely banned the business from charging its clients? I know landlords are generally seen as the clients, but can it not also be argued that tenants are too?

Do estate agents ever charge the buyer as well as the seller? The Government charges the buyer! - through massive amounts of stamp duty. Maybe the Government should ban itself for charging these unreasonable 'fees.'

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