Ian Clapham

Registered with Property118.com
Monday 13th July 2015

Latest Comments

Total Number of Property118 Comments: 3

Ian Clapham

17:11 PM, 30th June 2021, About 5 months ago

Property118 landlord overjoyed selling tenanted portfolio with National Residential for half a million in just 26 days

I did my appraisal work on a property being auctioned by National Residential and called them yesterday with some questions, ahead of auction closing today. Receptionist took my number but no one called back. Same today when I rang. Less than 2 hours to the hammer now and I dont have the information I need to bid. Very different from another auction house that has been keen to update me on properties closing. I know which I would choose if I were selling.... Read More

Ian Clapham

21:31 PM, 14th July 2015, About 6 years ago

Summer Budget 2015 - Landlords Reactions

Reply to the comment left by "Ros ." at "14/07/2015 - 20:49":

As Ros says we need to make a lot of noise quickly.

Landlords can be their own worst enemy with their relentless optimism. We cant deny that the market has been favourable to landlords, but so many younger landlords seem to think that easy times will continue, we will get over this little bump, houses will always double every x years etc. From this low point in the interest cycle, the next 20 years in the property market will show nothing like the capital growth of the last 20 years.

In the words of Louis XIV’s finance minister, Colbert, “the art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.” We need to be hissing and honking like fury, until the Chancellor decides it is easier to find another goose to pluck. Mark has provided an example of a letter to an MP and there are plenty of strong arguments to apply among the replies to this discussion.

We have a really strong case that the Chancellor’s proposals are not addressing the problems in the housing market and that he is set to destroy one of the largest industries in the small business sector. All for the politics of envy.

First, the attack on landlords is being used as a substitute for the only real solution to the housing shortage and high prices – to seriously free up planning controls.

HMRC’s Policy Paper on the proposal starts its Policy Objective paragraph with “To make the system fairer…” however this proposal does nothing of the sort. Private landlords to be made to play on an uneven playing field against both home owners on the one side and property companies on the other.
1. Home owners enjoy the substantial advantages of:
a. CGT relief
b. Inheritance tax relief, introduced in this budget
c. Pandering to home owners, furthermore, has kept our planning laws tight and caused the shortage of properties and high house prices.
2. Property companies can offset the cost of financing in full. There is no justification for removing interest relief in the income tax regime but not under corporation tax.
3. The individual landlords who are least affected are the richest, who have invested cash without the need for finance. Many of these are foreign investors who are so rich that they keep their properties empty. These are the only landlord investors who are not operating a business, they are reducing the supply of usable housing, yet they are untouched by the budget.

Where the Chancellor is on the weakest ground is on the taxation of non-existent “profits” as this goes against a fundamental principle of taxation, that you tax where there is a capacity and ability to pay. This is difficult for him to justify.

Thinking of alternative, fairer ways of taxing landlords, if we have to play our part in reducing the deficit: the tax increase that was announced on dividends could be applied to landlords’ actual net income; a 7.5% surcharge over 5k. Although we do not want to suggest that rental income is unearned investment income.... Read More

Ian Clapham

14:20 PM, 13th July 2015, About 6 years ago

Summer Budget 2015 - Landlords Reactions

Headline news: “Government moves to close down an industry”. Is it the drug trade? Human trafficking? Counterfeiting? No, it is the provision of rented accommodation.

Once upon a time the 1.5 million individual landlords could expect to be understood and valued by a Conservative Government. Independent-minded folk who like to work for themselves and control their own destiny are now to be forced to join the serried ranks of wage-slaves of the big corporates and hand over their savings to large banks to invest. I cant think of any bigger attack any UK Government has ever mounted on the small business sector.

Finance is inherent in property investment. Interest is the dominant cost in a property business. Rented accommodation in the future is to be the preserve of large companies, with unlimited tax relief on their borrowings.

Look at the largest property investment company in the UK, Land Securities plc. It operates on gearing of about 32%, with net rental income of 631m and an interest bill of 193m, representing 61% of its costs. If Land Securities was a person, not a company, it would pay top rate 45% tax on its net profit before tax of 319m. If relief were restricted, as proposed by the Chancellor, to the basic rate, Mr Land Securities’ effective tax rate would rise to 72% and his income after tax would halve. What is Land Securities plc actually paying in tax? Just 1%. Will it pay any more under this budget? Not a penny. Now should that not be a more interesting target for the Chancellor than the private landlord with 5 student houses?... Read More