12:32 PM, 10th October 2016, About 6 years ago 94
Unless the government confirms a U-turn on section 24, I suggest ALL LANDLORDS make it widely publicised that as of 5th April 2017 they will in unison apply a Tenant Tax to their passing rents. i.e. current rent plus X% tenant tax. (The actual % applied will probably be circa 8% but should be independently forecast by a respected national firm of accountants in conjunction with RLA and NLA)
A similar tax rise should also be applied in April 2018 and April 2019 depending on the forecast tax impact of prevailing interest rates.
Once the hard reality of THE TENANT TAX is nationally recognised especially by tenants, then the Government and Local Councils will have to make plans for the colossal impact in six months time.
I am not proposing to inflate rent for profit, but purely for my business to stand still. I suspect like many other landlords, I have never increased a rent to a sitting tenant, and only increase to the current market rent upon a natural change of tenant.
Likewise I am not proposing some form of price fixing, just merely to keep the status quo for the property business I started in 1989.
Once the NATIONAL RENT RISE DAY is widely publicised, one would hope that the Government can see the folly of their proposed tax grab, and realise the direct consequences of their actions on tenants.
Like the utility firms or any other business in the UK, when costs are rising the consequent impact has to be passed on to the consumer if the business is to remain viable.
My biggest bug bear is that as an industry with a national average yield of 5% we are portrayed as “greedy landlords” by the media and politicians. The country fails to realise that 5% yield is turnover not the profit margin, and that in reality the army of “cottage industry” landlords make a tiny rental profit and that is only because they are doing the work unpaid in their own time. Also that without the effect of some mortgage gearing or hope of long term capital growth the PRS business model is utterly futile.
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