A Level Playing Field Between Homeowners and Landlords

A Level Playing Field Between Homeowners and Landlords

10:19 AM, 29th August 2015, About 9 years ago 94

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This is my third Open Letter to Mr George Freeman MP – Conservative, Mid Norfolk Level Playing Field Between Homeowners Landlords

A Level Playing Field Between Homeowners and Landlords

Dear Mr Freeman

A response was received this week to the petition to Government regarding the restrictions of finance cost relief to individual landlords. The key message seems to be that Government wishes to “level the field” for homeowners and landlords. I have given that a lot of thought, and on reflection I think I may have been wrong all along. I now agree the playing field should be levelled. I have listed how this might be achieved below:-

1) Homeowners do not receive tax relief of their mortgages at all. However, when they take a lodger into their home the first £7,500 of rent received is tax free. This should be extended to all rental properties, i.e. the first £7,500 from each unit upon which Council Tax is paid should receive the same £7,500 per annum tax free allowance.

2) When a homeowner sells their home the capital appreciation is not taxed. This should also be applied to each of their rental properties.

3) A homeowner is allowed £1million of IHT relief against the value of their home. This should be extended to equity in rental portfolios.

4) A homeowner is given the choice as to whether they should obtain a CP12 annual gas safety certificate. This should also be applied to tenants, not imposed upon landlords.

5) A homeowner is free to evict a lodger subject to providing “reasonable” notice, without having to refer to the Courts. This is very fair and prevents the Court systems from clogging. This should be extended to private landlords.

6) A homeowner is not required to protect a lodgers rent deposit in an approved government scheme. This should also be extended to private landlords.

7) Homeowners may choose to have as many people as they wish living in their home without the requirement to purchase a licence. If that home is considered to be overcrowded then Councils have the means to deal with that issue. The same rules should be applied to tenanted properties. Whilst the UK is subject to a Housing Crisis it is important to remember that every person needs a roof over their head. The finances of those people in need of accommodation dictates where they can afford to live. The solution to preventing over crowding and leaving people with no choice, other than to suffer in poor quality housing, is a simple one; provide them with affordable choices. The only reasons that people live in poor conditions is lack of choice and affordability. The cause of the problems associated with overcrowding, sub-standard and unsafe accommodation are quite obviously due to lack of choice. The solution to the problem is to increase supply of property, i.e. BUILD MORE!

8) Homeowners are not required to verify the legal rights to live in the UK of guests invited into their homes. Quite rightly, they leave this to the border agencies. The same should apply to landlords.

Every year that passes whereby Government allow new property development figures to fall behind the need for new housing should be considered a failure on the part of the Government. The blame for such failures should most certainly not be pointed back at society, or any section of it. Constant vilification of landlords is not addressing the true cause of the Housing problem, which is quite clearly the responsibility of Government . The only real power to control immigration and population growth rests with government, as does the development of additional housing.

I do not blame the current Government for the state of the Housing Market, only time will tell whether it is successful in solving the problem. The reason I voted for you, and the Conservative Party, is that I believe you provide the best hope of being able to solve the issues associated with the Housing Crisis and the economy. I have not judged you on the failures of all governments in the last three decades, I expect better of you.

Given that successive Governments have become so reliant on the Private Rented Sector I think the suggestions I have made above are fair. I sincerely hope you will agree and that you will also consider the following:-

1) It has become a lifestyle choice for several people not to own their own property, they prefer the flexibility associated with renting

2) Many people are reliant upon the PRS for work mobility reasons

3) A significant section of society are unable to obtain mortgage finance required to purchase their own home. This is due to being on low wages, in need of benefits so as not to be living below the poverty line or having a poor credit rating.

4) Government have stated they wish to reward hard working people by helping them to make provisions for their own future. Buy to let can be an effective strategy if it is not taxed and regulated into oblivion.

5) Government clearly acknowledge the UK has a ‘Housing Crisis’

My conclusion is that if Government are to be true to their word they must consider a root and branch overhaul of UK Housing and associated legislation and taxation policies.

Yours sincerely

 

Mark Alexander

Related Open Letters >>> http://www.property118.com/category/open-letter-to-mp/


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Comments

Christine Fletcher

10:10 AM, 5th September 2015, About 9 years ago

I think this is a good letter. I will send it to my MP. Not that they seem to take a lot of notice. I think if a lot more people wrote to their MP they would listen. Some people I know don't even know who their MP is!

Cristian

23:33 PM, 5th September 2015, About 9 years ago

How about a Landlords' Party ?

Of course building a political organization takes time and the effects will take a lot longer to be felt, but it should be worth it in the long-run ! Investing in property is after all a long-term business.

Would this idea be worth considering?

Any views ?

Dr Rosalind Beck

23:38 PM, 5th September 2015, About 9 years ago

Reply to the comment left by "Cristian Stoian" at "05/09/2015 - 23:33":

Put it this way Christian - I'd join!

Mark Shine

0:59 AM, 6th September 2015, About 9 years ago

Reply to the comment left by "Cristian Stoian" at "05/09/2015 - 23:33":

I would probably not join - a political party needs to be unbiased.... unlike the current lot.

BTW Christian would the party be for non-incorporated landlords or for incorporated ones? 😉

I'm the former but my identical twin operates his business as the latter. We run identical businesses, both have under 50% LTV mortgages on all properties, both have accountants, do all lettings and management ourselves and both do not need to take excessive cash (or dividends) out but the current govt appears to want to simultaneously bankrupt one of us, whilst giving the other a helping hand.

Cristian

22:06 PM, 6th September 2015, About 9 years ago

Reply to the comment left by "Mark Shine" at "06/09/2015 - 00:59":

'Political party needs to be unbiased' ? Hmm, not sure about that. The Labor Party is theoretically supposed to represent the workers' interests, hence the name. So why not the Landlords' Party, or the Small Business' Party, or the Party of the Small Entrepreneur, choose a name.

I would join, and I don't think it matters if one is an incorporated landlord or not. How many Labor voters are laborers ?

Graham Landlord

11:50 AM, 7th September 2015, About 9 years ago

Sorry far to complicated a solution.

The governments’ argument is that by limiting the tax banding on residential Investments / Enterprises, it will reduce the attractiveness of purchasing BTL properties and thus they make them affordable and available to first time buyers. I was once a first-time buyer and 100% agree with the intention of this policy.

No solution is perfect, but there is a blaringly obvious one.

The Limit on tax relief should apply to the future purchase of First Time Buyer type properties only. 3 bed or less, band D or less and there is no reason for it not to start now.

The “Landlord Tax” needs a clause like: Mortgage Tax Relief is limited to the basic rate on residential property that is purchased after “1st Jan 2016”, that has four habitual rooms or less and is in Council Tax “E” banding or lower.

Yes it would make it difficult for landlords to purchase FTB type properties in the future, but they are free to choose to buy or not so that is not a real hardship. As it stands this “tax” will be inflicted on existing portfolios no matter what their make up is, be they little houses or massive blocks of bedsits.

Also the Government having restricted Private Landlords from buying rundown homes suitable for FTB’s, should also stop it becoming a field day for the purchase of FTB homes by Local Authorities and Housing Associations. Who without PL to compete against will step in and hoover them up, making tenents out of potential FTB's

Mark Alexander - Founder of Property118

12:18 PM, 7th September 2015, About 9 years ago

Reply to the comment left by "Graham Chilvers" at "07/09/2015 - 11:50":

Interesting thoughts Graham.

Are you the same person featured by Richard Dyson in The Telegraph yesterday?
.

Dr Rosalind Beck

12:37 PM, 7th September 2015, About 9 years ago

Reply to the comment left by "Graham Chilvers" at "07/09/2015 - 11:50":

I like your thinking Graham. And I've not heard that idea before. I think you might like to send it to the Treasury.

I'm not sure about the last bit though. I would let councils and housing associations buy these kinds of houses as there is also demand for rental housing. If we, in the PRS, were discriminated against in this way and not allowed to buy these properties in the future, I wouldn't care at all. But do councils and housing associations actually do this? I haven't heard of it in my area.

Mark Alexander - Founder of Property118

12:42 PM, 7th September 2015, About 9 years ago

Reply to the comment left by "Graham Chilvers" at "07/09/2015 - 11:50":

What I like best about your suggestions Graham is that the tax would not affect business decisions taken prior to the implementation of the tax.
.

Graham Landlord

13:49 PM, 7th September 2015, About 9 years ago

Reply to the comment left by "Mark Alexander" at "07/09/2015 - 12:18":

Hi Yes I am. I made this point strongly to Richard but he decided not to include it. To me above all things, it is what really needs to be said. The Goverment aren't just going to change their mind. We maybe able to get it more focused.

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