Landlords attacked for being wealthy fallacy

Landlords attacked for being wealthy fallacy

10:39 AM, 6th July 2017, About 6 years ago 3

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The Residential Landlords Association (RLA) have reported on figures obtained from DUP MP Jim Shannon’s parliamentary questions requesting figures on HMRC self assessment tax brackets for the 1.9 million unincorporated individual landlords in the UK.

Of these 66% or two thirds of all individual landlords are basic rate tax payers, 30% are high rate tax payers and 4% pay the additional rate.

Thus Section 24 mortgage interest relief reductions are almost certain to push many landlords from basic to higher rate tax brackets challenging the controversial unproven assumptions by the Treasury that only 1 in 5 landlords will be affected by the changes. For further information on the debunking of this myth please see Dr Rosalind Beck’s report and the Treasury response below.

Recent addition National Landlords Association research work indicates the percentage of single property owning landlords who anticipate that they will be moved up a tax bracket has almost doubled since the end of 2016.

Mel Stride MP and Treasury Minister confirmed landlords are taxed more than homeowners by paying tax on rental income, extra stamp duty and capital gains tax all of which are not payable for main residence owners.

The RLA said, “This kills off once and for all assertions made by the former Chancellor, George Osborne, that tax rises on private landlords were about ‘levelling the playing field’ with home owners.”

David Smith, RLA Policy Director, said “the previous Chancellor increased taxes on the private rented sector based on what are now clearly false assumptions.

“It is especially worrying that Ministers cannot tell how many properties, and therefore tenants, could potentially be adversely affected by their policies.

“We need more homes to rent to meet growing demand. It is time that the tax system encourages rather than stopped housing growth cold dead.”

Click here to read the full RLA article.

Today I launch my comprehensive report on Section 24 of the Finance (No. 2) Act 2015

Today I launch my comprehensive report on Section 24 of the Finance (No. 2) Act 2015


Today I launch my comprehensive report: Section 24 of the Finance (No. 2) Act 2015: “the unjust legislation that will make the UK housing crisis much worse.” I would like to thank all of those who have contributed to this report, which I hope will have a significant impact in our campaign to reverse this… Read more

Treasury response to Section 24 report by Dr Rosalind Beck

Treasury response to Section 24 report by Dr Rosalind Beck


Below is the response from HM Treasury to the comprehensive report written by Dr Rosalind Beck on Section 24 of the Finance (No. 2) Act 2015 “the unjust legislation that will make the UK housing crisis much worse.”     To Download the full report by Dr Beck   Please leave any (polite) comments you… Read more

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Mike W

12:16 PM, 6th July 2017, About 6 years ago

Perhaps a few letters to the editor of the evening standard should be made point out these basic factual errors on the then chancellor (Osborne). I wonder whether the evening standard editor (Osborne) will publish them?

Mandy Thomson

9:27 AM, 7th July 2017, About 6 years ago

While this has no bearing on landlords affected by clause 24, I would like to add something that further puts the lie to the assertion that landlords are wealthy fat cats.

In September 2014, the NLA published figures that showed that a quarter of small landlords were in fact running at a loss or just breaking even. One would hope this figure is lower now as the economy is healthier than back then, but many landlords will still be struggling on very small incomes as they will be unable to take up work, or qualify for a mortgage to release equity and expand their portfolios.

For example, in the summer of 2015 I was taking statements from diverse Croydon landlords in support of our campaign against the Croydon Council landlord licensing scheme. Many of those landlords were on very small incomes.

Among those that particularly stood out was a gentleman who had a small portfolio and was forced to quit his full time job to care for a sick elderly parent. He didn't qualify for benefits because of his rental income, but after his mortgage and maintenance costs were paid, he had little left to live on.

Another elderly landlord was letting a property to an elderly tenant at below market rent, which she just couldn't bring herself to raise as she didn't want to put her tenant in the position of applying for housing benefit.

Neither of these landlords was in a position to take up a job, even part time.

Aly D'Souza

12:08 PM, 31st July 2017, About 6 years ago

How do we go about fixing (or at least improving) the housing crisis?

I don’t think I’ve heard any dissenting voices to the opinion that the housing crisis that we’re in is being caused by the imbalance of supply and demand.

We’re not building enough homes and our population is growing.

It doesn’t take a Nobel winning economist to work out what that will lead to.

Since the 1980’s - we have seen an increasing consolidation amongst house builders. This means that small and medium sized builders and developers now build approximately 60-70% fewer homes than they used to and it means that 70% of our homes are delivered by about 10 different house builders.

Why is this important?

Well, consolidation reduces diversity and choice, and increases the power of the oligopoly.

This means that the big 10 can build what they like, when they like and that isn’t good for supply. Is it that surprising then that a recent RIBA report suggested that 75% of us would never buy a new-build home.

How can we improve both the quantity AND quality of the new homes being built?

Here are 5 actionable suggestions for Mr. Sharma, our new housing minister:

1) Create a farmer’s market of housing, where large sites are broken into smaller ones, where small and medium sized developers and builders can make a difference.

Exactly the same phenomenon has taken place in the supermarket industry. We have seen a consolidation of grocery shops so that the vast majority of our food purchases are through the big supermarket chains. We used to spend about 2 hours cooking every day and we now spend about 27 minutes. This is mainly due to the rise of the ‘ready-meal’ - which are tasty and convenient, but have too much salt and too much sugar in them and our nation is getting more obese as a result.

The rise of the farmer’s market increases diversity and encourages that back to basic cooking from ingredients.

2) Disincentivise land trading by killing the planning arbitrage market.

It makes no sense that planning generally now costs tens of thousands of pounds and takes over a year on average to be successful.

3) Scrap stamp duty!

I know that this is not really your bag, but please have a word with Mr. Hammond. Stamp duty is a (potentially) huge tax on transactions which discourages people to move out of their homes.

If we want the elderly to move out of their large homes and downsize into new homes freeing up space for the younger, we need to make the transaction as cheap as possible for them.

If we want families living near good schools to move on when their kids leave the school, we need to make that easy for them and cheap for them to do so.

4) Introduce a capital gains tax on all home profit sales over a certain level.

Fourth (again, a word to Philip), to offset the lack of tax take from stamp duty and to discourage flipping of homes and the holding of homes as investment assets, we should introduce capital gains tax on all home profit sales over a certain level.

5) Improve affordable housing.

At the moment, policy dictates that developers should provide around 50% of new housing as affordable (borough/council dependent). In reality this never happens because of ‘viability assessments’.

Additionally, once a developer has agreed to provide the affordable homes, they are strongly incentivised to make these as low quality and as cheap as possible.

Instead, councils should build their own affordable housing - they know that building higher quality will pay dividends over the long-term as maintenance and refurbishment (whole life-cycle costs) are reduced, so they should do so, just like they used to.

If you found this article insightful, useful or even just amusing, read it in its entirety on our blog - How to solve the housing crisis: An open letter to the government at

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