National Rent Rise Day 5 April 2017
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.
Jason
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Member Since January 2011 - Comments: 12193 - Articles: 1395
4:10 PM, 16th October 2016, About 9 years ago
Reply to the comment left by “James Robertson” at “16/10/2016 – 15:20“:
There is no credible statistical evidence to back up any of your naive assertions, which are nothing more than sophistry you have probably picked up on elsewhere.
Your flawed logic takes none of the following into consideration:-
BTL landlords tend to be mature people who have a proven track record of home ownership, servicing mortgages and saving disposable income for deposits on additional properties as investments into their future. They put down larger deposits than typical first time buyers and their homes are at risk too if they default on any of their mortgages.
As you are clearly not a landlord and have no valid contribution to make to this website I have cancelled your membership and blocked access to commenting, as is my right as owner of this website and in accordance with our Terms & Conditions of use.
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Member Since October 2014 - Comments: 423
6:51 PM, 16th October 2016, About 9 years ago
Reply to the comment left by “Mark Alexander” at “16/10/2016 – 16:10“:
Thank you Mark
Good riddance to the illogical.
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If James Robertson’s logic were correct, then corporate businesses using buy to let or its’ corporate equivalent would also be targeted by parliament
Member Since June 2014 - Comments: 1562
9:03 PM, 16th October 2016, About 9 years ago
“The problem is, if I am a highly-leveraged OO, I’ll been over backwards, doing whatever is necessary (second job, overtime, borrowing from familly etc) to pay my mortgage and keep a roof over my head. If I ultimately fail,the bank can repo and worst-case-scenario, the bank lose a few grand. As a highly leveraged BTL landlord, I would be likely to have numerous properties in this position, probably with the same lender. I also would be much more ready to throw in the towel and let the bank repossess as they are not my home (precipitating the loss for the lender).”
Anyone in the business knows this is clearly nonsense as owner occupier (OO) mortgage arrears are far higher than BTL (historically about 3x)
There is an element of ‘logic’ to your claim though as outright repos are actually higher for BTL
-Ask UKAR for the reasons why.
(clue; calling in 110% LTV’s loans isn’t as profitable as the 60% LTV ones!)
Member Since February 2016 - Comments: 977 - Articles: 1
9:25 AM, 24th October 2016, About 9 years ago
Interesting reading at UPAD website:
https://blog.upad.co.uk/blog/tenants-call-for-rent-strikes?utm_campaign=newsletter&utm_source=hs_email&utm_medium=email&utm_content=36251696&_hsenc=p2ANqtz-9QWtzguigzMhU_pMhILN_mg5X6VLlZkxMnLzsXLIHAk3YaTTN48K6V3YPy3jj7GEnqqgfBa8EH3n1pqd9ezwxdIWAspA&_hsmi=36251696