Iain Duncan Smith Has Spoken Out For Landlords

Iain Duncan Smith Has Spoken Out For Landlords

22:06 PM, 21st June 2017, About 4 years ago 163

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On Sunday 18th June 2017, Iain Duncan Smith was quoted by the Sunday Telegraph as saying ….

“Finally, it is time to look again at the way we treat private landlords who buy houses to rent. George Osborne’s decisions to impose a stamp duty levy on the purchase of homes to rent, to restrict mortgage interest relief to the basic rate of income tax and to tax a landlord’s turnover rather than profits have led to landlords scaling back or even leaving the sector altogether.
They are a significant provider of the additional housing we need. We should be encouraging them with devices such as VAT relief on conversions or even capital allowances, not punishing them. It’s no wonder buy-to-let purchases have fallen dramatically. If the purpose was to stop foreign owners buying up property and leaving it empty

…………………………………………………. We are in danger of throwing the baby out with the bath water.”



Comments

by Heather G.

12:42 PM, 22nd June 2017, About 4 years ago

Reply to the comment left by "Barry Fitzpatrick" at "22/06/2017 - 11:46":

Great letter Barry. If you don't mind, I'll use this as a template for my letter? If landlords who are directly affected could write to give first-person, clear examples of the impact of S24 (or any of the other negative changes), I think this would hit home harder than landlords "complaining" in general. Looking at the comments on P118 recently, it seems a lot of members are selling up/downscaling which will be affecting hundreds if not thousands of tenants.

by Pamela Potter

12:49 PM, 22nd June 2017, About 4 years ago

The housing sector was of no interest to anyone during the election, it was all Brexit Brexit Brexit (that worked well!). Then the horrendous terror attacks and the focus changed to underfunding of security services, NHS and Theresa May was challenged on police numbers, etc. And was shamed yet again. And now there's Grenfell Tower.

Theresa May gravitates towards whatever is making the most noise. Her new PR team have clearly told her to apologise for her handling of the Grenfell Tower and I think there will be an increasing 'sensitivity' towards the reality of life for people at the lower end of the housing sector and the potential to be seen as a government that continually ignores their plight. Apparently it has just been announced that 600 tower blocks have the same cladding. What a mess!

And the housing sector is just about to get worse as the real effects of Section 24 kick in. More potential shame for Mother Theresa. Her justification for Section 24 was to support first time buyers which I don't think is going to be nearly good enough justification for taking away a significant source of housing for the more vulnerable in society. Kicking them again when they're already down. Of course we've all known this all along but now the broader public are tuning in and the reality of life for these people has been brought into sharp relief. Let's face it, the majority are looking for more and more reasons to hate the Tories (and for good reason) and the PM knows it.

In reality S24 will be seen, by the demographic group making the biggest noise at the moment (the vulnerable in society) as the middle classes helping themselves again. Why help the first time buyers when there are people struggling to feed themselves and their families, people going to food banks, living on credit, long term unemployed, etc. Why make life even harder for them just so that the 'Gap Yar' brigade can now get on the property ladder? The already privileged continuing to recruit new members, taking care of future Tory voters.

Unfortunately, and I say this with absolutely no satisfaction whatever, the Grenfell Tower tragedy is going to bring to the forefront the issue of social housing for the more vulnerable in society and I believe the possible consequences of Section 24 will, in some circles at least, be given some air time. She won't want to be the PM that presided over the biggest increase in homelessness for the last two centuries. She's already got enough bad PR.

I feel horrible saying it, it's like Jo Moore's 'a good day to bury bad news' comment, but social housing is going to be the next issue that receives focus and debate. IDS has already started. It came as no surprise that his comments on Section 24 were part of an article on the tragedy. It won't be long before the usual suspects LBC, Jeremy Vine, Victoria Derbyshire, The Wright Stuff, Question Time, et al start researching the bigger UK housing picture for debate. I'm also going to send appropriately focused emails to all of them about Section 24. They'll want to be as informed as possible at a time when this is mostly likely to receive some attention and now would be the time give them some facts about Section 24 to inform their questions.

I spent far too long writing posts on Facebook last night on the ITV online feed about the scrapping of letting agency fees trying to explaining that this is NOT going to make rents go down. I mentioned S24 quite a few times. I was accused of scaremongering and told to go and get a proper job (yawn!) but there were also a lot of people interested as they hadn't heard of it and were shocked when I told them it had already been implemented.

I may consider re-igniting my Change.org campaign soon but to do it now would be insensitive and opportunist.

I'm hopeful that Section 24 will now be scrapped. Not for the right reasons but when did politicians do anything for the right reasons? It will be purely a case of survival.

by Gromit

13:39 PM, 22nd June 2017, About 4 years ago

Reply to the comment left by "Heather G." at "22/06/2017 - 12:42":

@Heather
Please feel to use it as you wish. But do put it into your own words if you don't want your message to be treated in the same way we have treated the cut'n'paste responses we received from the Treasury (via David Gauke, Jane Ellison & co.).

by kathleen drea

15:17 PM, 22nd June 2017, About 4 years ago

Reply to the comment left by "Dr Rosalind Beck" at "22/06/2017 - 10:32":

I have now sent my thank you email to him the more correspondence he gets regarding this issue the more he will realise the importance of it.

by Chris Novice Shark Bait

18:30 PM, 22nd June 2017, About 4 years ago

Just sent this to IDS.

Dear Mr.Duncan Smith,

Having served 30 years as a General Practitioner , Police Surgeon and disability benefits officer I chose to take early voluntary retirement on a reduced pension 10 years ago with a clear social conscience, having paid back my responsibility to society in full measure. I went to Leeds University on a full grant for 5 years. I came from a working class background in Hull. I took this decision reluctantly and was an undoubted loss to the medical profession and feel some guilt still. My reasons were partly medical, (though unrecognied by the NHS because I was out of service at the time and this therefore did not translate into any enhanced pension consideration however justifiable), but more specifically because of repeated meddlesome government interference in a profession that was not fully understood in any real way other than financial cost to treasury coffers. We so often hear, but are not placated by rhetoric that states we are spending more now on the NHS than ever before. Of course you are. Technology has advanced. Inflation has occurred. The population has expanded without due control. Funding has never been enough and is not enough now.

The NHS has quite exploited the good will of its very caring workers for all the decades I have been alive and that is 6 to date and can attest to personal working experience for 3 of those. If you have a recruitment and retention problem and have to look oversees you should ask yourselves why? I could have emigrated, but stayed loyal to the U.K. Many of my contemporaries who did emigrate have enjoyed enhanced lives elsewhere. This saddens me.

I chose to enter the BTL market as a sole trader in partnership at will (governed by the 19th century partnership act which still applies today) with my partner in life of 20+ years standing.We are both divorcees. In my case I was too committed to my important work and it impacted adversely on my family.My partner still works as a part time primary school teacher but is eligible fully to retire in one years time on a reduced pension.

To circumnavigate bankruptcy we have determined that we can survive if my partner retires on a low pension (one less teacher) and we legitimately fiddle with beneficial interest shares to stay afloat, selling some to pay down others and evicting some tenants in the process. How perverse is that? An ill- thought out, counterproductive stealth tax on landlords and tenants that poses many asked but as yet unanswered questions.

We do not wish to marry. We would enter into a civil partnership for heterosexual couple but are not allowed. We should have rights that we simply do not have.

So where am I going with this?

Well firstly I am divulging personal information so that you may have a better chance of identifying with me/us. Mostly I want to congratulate you for your comments made at the end of your article in the Sunday Telegraph 18.06.17. You are not the first, but a significant addition to the few who have.

We contributed financially to the judicial review which failed, we lobbied hard and will continue to do so. We are faced with selling up and evicting tenants. The first goes in the next 2 weeks and it is distressing for us, but more so for them. They live next door but one!

When I consulted with Kenneth Clarke in our constituency he said well it was a good lobby but George had done something about the situation and it should have happened before. We urged him to consider not devastating us as BTL landlords, investing for our pensions and future, by simply making these changes prospective and not retrospective. He made a note. I think he was contemplating, but may have forgotten. He is now the Father of the House. Could you whisper in his ear?

I enclose a copy of an e-mail I previously sent to Mr. Kenneth Clarke and you will get the jist.

Our forthcoming constituent meeting relating to section 24 of the finance act 2015.
Christopher Blanshard to clarkekshow details
Dr Ros beck report on section ...pdf (2.0 MB)

May we recommend that you read a comprehensive report, by Dr. Ros. Beck that emanates from our well-motivated community, which has also been sent to The Treasury. It is well written, researched and referenced. We attach it now.

We also would like to refer you to a shorter article by Professor Philip Booth of the Institute of Economic Affairs in which he states:

“Osborne is either being deliberately dishonest or simply does not understand the issue when he uses the tax relief for owner occupiers example. Tax on owner occupied imputed rent was abolished in 1963 (in my view it should be brought back, but that is a separate point) and tax relief on mortgage interest was intended as an offset against that (because interest is taxed in the hands of the financier of the mortgage, if appropriate). When the tax on imputed rent was abolished the tax relief that remained was an anomaly (or, arguably, designed to shove society in the direction of owning rather than renting). There was nothing any longer to relieve (so, of course, it just relieved general income tax paid on income).
The case of renting is totally different. Here, tax is paid on the rent and the interest is a business cost (as with any other business). One should pay tax on the profit and the financier of the mortgage pays tax on the interest.
Any other position is essentially arguing that providing shelter for people who cannot afford to buy is less economically worthy than any other economic activity that would be taxed as a business and it should therefore be discriminated against.
To put it quite bluntly, this is an elementary undergraduate public finance error that should not be made in the Treasury.”
Please see the link
https://www.property118.com/professor-speaks-out-against-landlord-tax-grab/83048/

Please note that the mortgage lenders pay tax on the interest they receive from us. - Fact! The general public do not reason this as a rule. We as business people do.
Why therefore is it fair for the government to impose double taxation and drive us out of business?

The ulterior motive escapes us beyond speculation, but as our M.P. with all your history and Charisma we ask you to demand answers to the many questions posed on your constituents' behalf. We do not wish to rely on your instinctive preferences here, we ask for a more contemporaneous and vigorous approach. It is not a time, we would suggest to rest on Laurels.

Kind Regards,

etc

That did not bear any immediate fruit. Times have changed. We did not vote conservative this time, like many a disgruntled landlord who did not expect a policy lifted from the Green Party manifesto to be launched against us. We lobbied vigorously and your party still did not listen. There is still time to reverse this before there is too much collateral damage which does include the Conservative government. We have not had a good night’s sleep in 2 years now. Why?

The conservative manifesto made a bold statement about no tax increases. It u turned on NIP but no mention of the stealth tax on the PRS who are bolstering roofs over people’s heads
in a housing crisis.

Thanks for showing some recognition. It is time to reverse section 24 before the conservative government is further embarrassed into oblivion unless it has immediate plans to house people out with its sponsored build to rent scheme at small professional landlord's expense.

We are the corner shop people, the backbone of housing provision and all we and the public hear is about rogue landlords. Go after them with existing legislation, protect and assist us. We are the solution to the problem, not the cause of it.

When I was a Dr. I was in one of the best respected professions. Now I am in the BTL market I am in one of the least respected professions. I am still the same person and actually do still care and am trying to still give back. The government however don't have a grasp on how the PRS functions and seek to destabilise it without listening fully to our very professional representative bodies and submissions.

It was sadly the same in the NHS. I left. I am considering leaving the PRS, but 4 years is an unrealistic time frame given my long term commitment and the value of my service.

The conservative party suffer, in my opinion from a new medical condition which I will call Soundbite itis. It has been seen to be quite contagious. The symptoms include the over use of phrases such as Strong and stable and level playing field. These in themselves are not of serious adverse prognostic consequence unless they are false, in which case the condition is likely to be terminal.

Thank you for listening,

by Mark Alexander

18:38 PM, 22nd June 2017, About 4 years ago

Reply to the comment left by "Chris Novice Shark Bait" at "22/06/2017 - 18:30":

I love your last paragraph
.

by NW Landlord

9:37 AM, 23rd June 2017, About 4 years ago

I just sent this to I D S

Hi Iain

I am a landlord in the north west of England and would like to put on record my gratitude for speaking out against the horrendous tax namely section 24. To say this tax has had a detrimental effect on my business would be an understatement not to mention my health and overall stress this has caused to myself and my family.

To give you a brief overview I gave up a very good job as a national account manager for a large confectionary company to pursue a career in property development against at the time all family advice. Over the last 14 years I have built up a decent sized portfolio with a mix of tenants from all walks of life. Over the the last 5 years I have focused on buying derelict houses not fit for purpose spending a fair amount of money refurbishing them then letting them to a variety of low income families , migrant workers and housing benefit.

Since section 24 was introduced my whole focus has changed I have not bought another property and basically tried to restructure, raise rents (which I have never done before) and ear mark the large family homes in my portfolio that I can sell all just to survive, some families have lived in my houses for 10+ years without one rent rise and perfectly happy

If I carried on in blissful ignorance I would have lost everything due to this horrendous assault on my livelyhood. My tax bill would have gone up to a rate of over 100% of profit so it doesn't take a genius to work out where that was leading.

I have managed to incorporate my business by the grace of god and huge expense all so I can carry on operating my business in the same manner how is this fair ? I am one of the lucky ones if you can call it that but I can assure you there are far more portfolio landlords that will not be so lucky and even more so the poor tenants that will 100% loose their homes as I can tell you with 100% certainty once this tax bites it will be unaffordable for all portfolio landlords with mortgages across the country and there will be mass homelessness and bankruptcy due to this ill thought out policy.

I know that you are busy man and have bigger priorities (Brexit , terror ) but this is a Massive sleeping disaster that will start coming to the surface in about 18 months once those first tax bills hit the mat we are already seeing increased rents and reduction in supply but we ain't seen nothing yet I can assure you so I urge you to use your influence to start the process of repealing this unjust unfair and down right nasty attack on your core support ( I used to vote Tory but will not until this is repealed )

Regards

by Whiteskifreak Surrey

9:53 AM, 23rd June 2017, About 4 years ago

On the subject...
Interesting article in Property Industry Eye...
http://www.propertyindustryeye.com/buy-to-let-clampdown-has-backfired-on-the-government/

And the S24 tax has not even been paid yet - even for the fist time..
Disaster waiting to happen and which this Forum predicted a long time ago.

by NW Landlord

10:05 AM, 23rd June 2017, About 4 years ago

My 8 year old could have seen this coming, total out of touch idiots and that is the reason why Westminster is in such a mess because we all can see through the lot of them.

by Pamela Potter

10:18 AM, 23rd June 2017, About 4 years ago

Section 24 is so ridiculous and the Tories were so determined to ignore all of the warning signs that I can't help but conclude that there are other motives out of our awareness that made them so completely deaf, dumb and blind to the inevitable.

It's terrifying to think that the people running our country can be so thick! Can it?

Listened to the webinar last night (thanks guys) am now seriously considering Malta!!

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