Iain Duncan Smith Has Spoken Out For Landlords

Reply to the comment left by "Pamela Potter" at "13/07/2017 - 12:39":

Maybe you should publish it here Pam, so others can write also
especially the contact addresses for people to write too!!

I wrote to IDS and copied housing minister in, had my second letter from HMRC telling me the party line of 1 in 5 etc....
I had previous communications back via my MP, who we lost at the election also quoting a standard party line. No change i think till they see the dire impact they have caused.....but at least we'll have fort it and proven the new reality they are facing.....

Bit uncomfortable posting it because it's such a personal letter but I do think it's time that we change our narrative, so what the hell. Clearly objecting to the fiscal logic and the impact on our own businesses has had about as much impact as the tobacco companies complaints about an increase in VAT on fags. Nobody cares if we don't make money.

For this reason, I strongly believe that we now need to focus our communications on the impending human tragedy that is about to unfold. This is just my opinion but I think letters should now include real life examples of tenant evictions, the human stories of tenants who are being abandoned by the system and the more human side to the impact of Section 24 on both tenants and landlords. I tried to do that with my change.org petition but clearly didn't do it very well.

I didn't consider for a minute that I'd get any response from Downing Street but when I worked in a big corporation, if I sent an email that I wanted to be actioned immediately I would always copy in the company directors. The logic being that the management below are far more likely to take notice as an arse covering exercise. So am hoping Caroline Dinenage, MP and Alok Sharm, seeing the PM's name will have perhaps taken a little longer to read it.

"Dear Mr Duncan Smith

Firstly, I would like to thank you for speaking out about the obvious fallout to the housing sector from Section 24. A lot of energy has gone into trying to find a way to get the government to reflect on this and look at the longer term impact rather than the short term money generating strategy that it almost certainly was. So far we have not succeeded. My local MP's response below is the standard email sent to most landlords from their MP's. In light of this frustration it was like finding a watering hole in the desert when your article appeared in The Sunday Telegraph.

I will not repeat what I know many of my fellow private sector landlords has communicated to you but, if I may, I would like to share with you my story so that perhaps you can get an idea of the potential damage Section 24 is likely to cause, not just to landlords, but also to the most vulnerable in society.

Last year when I sent my angry email below to my own MP Caroline Dinenage I had sixteen properties. Fortunately, I have had a couple of tenants leave of their own accord and have sold those properties so have not had to suffer the horror of informing tenants that they have to go. I now have fourteen.

Of those fourteen properties, two are occupied by vulnerable adults who are long term unemployed - one a family of five with both parents having mental health issues and one is a man on his own who is clinically obese who rarely leaves the house.

I have five properties with single parents (one Mum and four Dads) who have their incomes supplemented with Family Tax Credits.

I have two professional couples who are trying save for a mortgage.

The rest are couples who are working on minimum wage (carers) or just above (catering).

Absolutely none of my tenants are in a financial position to buy my properties from me which makes a mockery of the government's assertion that the point of Section 24 was to level the playing field for first time buyers. Even if it were true clearly no provision has been made for those being evicted from those houses. When I sell they will be scrabbling around the limited rental options left and, without doubt, be paying a lot more for it than they are currently paying me. The majority of them will be going straight to the housing department for a solution. There isn't one.

I have already been contacted by Gosport Council and offered £1,000 as an incentive to take on more benefit tenants but it is just not financially viable. I have heard stories of councils offering to find tenants, do all safety checks and take on the ongoing maintenance of properties for private sector landlords if they agree to take on housing benefit tenants, such is the council's desperation to keep the private landlords on board.

I could put up the rents but my tenants are absolutely not in a position to take on those increases without suffering and I do not want that on my conscience. They are already living hand to mouth. I cannot put their rents down because of the stress tests put in place by the mortgage companies and Section 24.

I have looked at incorporation but the only financially viable way around that would be for me to form a partnership. My husband passed away at the end of 2011 and my children are not involved in the business. There are no options for me to form a partnership. The cost of incorporation for individuals when you consider the Capital Gains Tax when I sell to the company and Stamp Duty Land Tax when the company buys the properties is prohibitive and it would take the rest of my life to claw that money back through rental profits. So it's a pointless exercise for me.

I am also heavily leveraged which means I will almost certainly, by year four, be paying more tax than I earn. Not sustainable.

The other thing to consider is that this will also artificially catapult me into the higher tax bracket.

I am a fully qualified psychotherapist and last April set up a volunteer group at my local GP surgery. In exchange for free room space and supervision costs I have been able to organise volunteer counsellors (in their final year of training) to take on patients with emotional issues who are referred by the GP. This is very time consuming, albeit rewarding and is funded totally by myself. So far we have provided effective emotional support to over 150 NHS patients (for free) and have supported four trainees to achieve their full qualifications. We are currently interviewing our next intake of students. Exciting times. I am extremely proud of this and had been planning to approach more surgeries and to try to find some funding so that we can perhaps train even more. They are much needed.

But this will all have to stop as I will need to find full time employment.

I can try to supplement my income by setting up in private practice. However, the running costs of doing this (the going rate in my area for a therapist is £30.00 an hour) plus the 40% tax would mean that I actually earn less than minimum wage.

I also work part time at a Higher Education College where I teach counselling skills to new trainee counsellors but, again, the higher tax bracket would put me on less than minimum wage. So I would have to give that up too.

I could go and live in Malta but I would be separated from my children and they have already lost their father so why would I want to do that?

This is just one person's story Mr Duncan Smith but I can assure you that there are many thousands of landlords out there with their own stories about to begin the traumatic process of selling up and evicting tenants. I hope it has helped to give you at least a small insight into the extent of the ripples that Section 24 is going to have on society. Gosport is already a struggling area with high unemployment and a lack of social housing.

The government aren't just throwing the baby out with the bathwater, in my case they are throwing out 26 adults, 12 children, 4 dogs and a rabbit!

Aside from the obvious devastating effects to my business and my career, the more important question for the next housing minister is 'Where are you going to house these people?'. Did they learn nothing from Ireland in 2009?

Thank you for your time.

Yours sincerely"

Haven't heard from Alok Sharma yet but have heard from Caroline Dinenage yet again asking me for a breakdown of the tax implications but I'm not sure I can bothered to put in all of that work only to get the '1 in 5' letter from the Treasury. Again!!!

Great letter Pamela and I'm saddened to hear how badly affected you and your tenants will be. I agree that sending real life examples should be more effective in getting the message across. I am in the process of writing to IDS but only have one property so can't give such powerful examples. I wish you the best of luck in finding solutions that minimise the devastation S24 could bring.

Reply to the comment left by "Pamela Potter" at "14/07/2017 - 08:39":

Excellent letter Pamela.

I attend the landlord meetings of many local Authorities in my vicinity and at each I have asked the question you posed ‘Where are you going to house these people?’. I have yet to receive a coherent reply.

Reply to the comment left by "Heather G." at "14/07/2017 - 09:31":

Thanks Heather.

I will begin selling off some and paying down mortgages on others so I do have an option but the value of my properties hasn't gone up so much and I'm tied in with most mortgages until 2021 which means I can only pay off 5% a year on each without incurring Early Redemption fees so that isn't going to happen overnight and certainly not within four years. I didn't include that in the letter because, quite frankly, the letter was long enough as it was!

I am still convinced that once the mainstream media get hold of this and start challenging the government openly with the arguments that we've been using for lord knows how long, it will be withdrawn. Following Ireland's example, I'm thinking two years. Here's hoping.

Hi Pamela, I wonder whether it would be a good idea to send a copy of your letter to the Sunday Telegraph? As they originally published the story they have a bit of a vested interest in following it up. Yours is such a powerful example of how the "one in five" is not minimal at all, but a wide an profound impact on society as a whole. Heather.

As a landlord in the mining area of Doncaster l find it hard to understand why all the fingers are pointed at us, l am an ex-miner who is trying to do good and offer rented houses at reasonable (not extortoinate ) rents. I am trying to make ends meet because all the benefit cuts have made an impact on my tenants. I have tenants who have only benefits to rely on for rent payments and they are being hammered by this tory government, which may l say is not un-common. I have tried lowering rents, yes LOWERING, and still l struggle. like many of my partners as land lords we do not put rents up just to make money we are trying to make a living. To put matters straight l have never yet in almost 8 years increased rent in any of my properties. Leave us alone!!!!!

Excellent letter Pam, i agree with you, the government are not in listening mode, its another U turn, another tax problem and nothing is going to happen till they see the direr results of their actions...then and only then will we see action or repeal.
I've had 2 responses from HMRC already...1 in 5 blah blah blah, i actually suggested that local councils should start to do long term deals with Premier Inn's to house the homeless and evicted from Landlord sell offs.....same question where will you house potentially 1m people of 4.5 million homes when the 1 in 5 have no where to go?

Any fool knows that a premier for a week is more than the rent of a months house......emergency budget required to fund mass homelessness!!

I have just written my 6th email this morning to my new Labour MP with different tones of affordable housing, increased rent to market rates 10-14%, homelessness etc etc

We can only keep the pressure up and write to as many who will listen, i have offered to sit down with MPs to explain, but they are just passing on communications to HMRC for the standard letter.....those that don't listen, often struggle to come to terms with change and the effects of it, as a result, they suffer harder once the position is too late and disaster is on them.

Reply to the comment left by "Mike D" at "14/07/2017 - 13:11":

Maybe we should all sell up and invest in Premier Inn for the next few years?

Reply to the comment left by "Pamela Potter" at "14/07/2017 - 08:39":

Maybe we should do a letter titled,

Only one in 5 Tory MPs will have a job if this isn't scrapped!