Open Letter To The New Chancellor – @PHammondMP

Open Letter To The New Chancellor – @PHammondMP

15:37 PM, 21st July 2016, About 7 years ago 54

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Dear Mr Hammond, Open Letter To The New Chancellor - @PHammondMP

Upon her welcome ascension to the role of Prime Minister, Mrs May verbally committed the Government to act on behalf of the striving workers of Britain, rather than exclusively for the benefit of those at the top of society. It is therefore in this light, that I feel I must bring the following matter to your attention.

I am one of the many private landlords operating outside of the property hotspot of London. Throughout most of the country outside London rents have remained static, rising nationally at a rate lower than overall inflation. However, the trend with myself and among landlords that I know has been to charge the same rents year-on-year; the aims of this being to cover mortgage outgoings and other costs while insulating our tenants from disruption and hardship. In other words, just to let things “tick over”. It was for this purpose last summer that I re-mortgaged all of my properties: to prevent my rents from increasing (rents paid by hardworking strivers) I re-mortgaged to stop my mortgage outgoings from doing likewise.

Unfortunately, thanks to your predecessor George Osborne pulling the rug out from beneath myself and other formerly Conservative voting landlords (and by definition also our tenants), this effort appears to have been for nothing. Section 24 of the Finance Act 2015/16 will, with each year that passes until 2021, remove our ability to offset mortgage outgoings (our main cost) against tax. The affect of this will be to repeatedly and significantly rachet-up the amount of tax that we pay by reclassifying increasing proportions of a genuine business expense as fictitious profit. This is an utterly unprecedented and frankly dishonest method of increasing tax revenue. It is one of the policies, pushed through without proper consultation by the Treasury and absent from the Party’s manifesto, which caused George Osborne’s reputation among the Party’s grassroots to bomb through the floor and for his departure from the role of Chancellor to be greeted among them with such glee.

Within a year of the Conservatives’ election victory, Treasury policy has been pushing significant numbers of people to have voted Conservative not to do so again. This year’s local elections were the first time in my life that I chose not to vote Conservative: such was my discontent with George Osborne’s activity and the prospect of him potentially leading the Party in future. Every landlord that I know, who was aware of Section 24, also did the same. Through this policy, Mr Osborne also enlarged his reputation for granting favours to corporate vested interests: the reality of Section 24 is that contrary to previous official spin, the wealthiest cash-buying and corporate landlords (many of whom are prominent Conservative party donors) are completely protected from its implications. When subsequently, during his Autumn statement, the then Chancellor quite cockily responded to criticism of this unfairness with a targeted stamp duty hike upon smaller rental providers, he’d truly passed the point of no return… demonstrating the same punitive impulse as which would later drive his ill-famed “Punishment Budget”.

Of far greater importance however are the implications of Section 24 upon the hardworking strivers who Mrs May has pledged to stand up for. Because the projected higher tax bills calculated from fictitious profit will in many cases exceed today’s rents once added to mortgage outgoings, many landlords have no choice but to increase rents. Indeed, those aware of Section 24 have already begun to do so. This is why Section 24 has been dubbed “The Tenant Tax”. Thanks to your predecessor, the country is beginning to experience entirely tax-driven rent increases. This is bad for working Britons and their corresponding ability to save up a deposit of their own. Furthermore, as the minimum rents landlords need to charge rise, in order to cover their outgoings and inflated tax-liability, their ability to let to the poorest and most vulnerable members of society will decrease: particularly so following recent restrictions to housing benefit. Already stretched local councils and housing associations will therefore pay a heavy price for this past year of short-termist landlord-bashing. Those landlords resultingly unable to obtain rents high enough to cover their costs will in turn be forced to evict their tenants and sell with vacant possession, reducing the overall supply of rental accommodation, placing further upward price pressure upon the rental sector in the long-term, and damaging labour mobility within the country at large.

The state will also face further financial costs of its own, namely the cost of investigating the growing number of landlords driven not to declare rental income in order to keep their rental businesses viable, and the cost of defending Section 24 in Court during the upcoming Judicial Review of the measure.

In short – irrespective of Brexit, Mrs May becoming Prime Minister, and George Osborne’s departure – if the Treasury does not reverse the recent legacy of your predecessor and dustbin the impending cock-up that is Section 24 of The Finance act 2015 (“restrictions on finance cost relief for individual landlords”), the situation for both hardworking strivers and the reputation of the Parliamentary party among grassroots Conservatives will continue to deteriorate.

Thank you for your attention with this matter.

Yours sincerely,

Gareth Wilson


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For example, £27,500,000 of overpaid mortgage interest was refunded to landlords in 2016 as a result of legal campaign undertaken by 300 members of Property118 Action Group against West Bromwich Building Society. Between them, just over 300 landlords raised just over £601,000 to take their case all the way to the Court of Appeal.

Just imagine what thousands could achieve!

Our target is 50,000 members paying £10 a month. This will generate a fighting fund of £6,000,000 a year.

We are calling upon all letting agents and professional advisers to recommend membership to all of their landlord clients.

Many are already benefiting from tax planning and business restructuring strategies discovered and shared amongst Property118 Action Group members, which are now saving them a fortune in tax.

Our latest legal campaigns are targeting refunds of an estimated £600,000,000 of mortgage interest overcharges made by Bank of Ireland and Skipton Building Society as well as a reversal of legislation increasing tax on landlords with mortgages, many of which will pay more tax on rentals than they receive in profits.

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Property118 Action Group MEMBER


Monthly Subscription Benefits

  • Be one of the first to hear about new tax planning strategies as they evolve.
  • Have Direct access to our Hon. Legal Counsel (Mark Smith (Barrister-At-Law) when you have legal problems.
  • We will share group legal strategies with you (where possible and under advice) if you are affected by any legal action we are undertaking on behalf of members.
  • Use of the Property118 Action Group member badge (shown above)
  • Optional 7 nights in 5 star hotel in Malta for £199 and meet Mark Alexander, founder of Property118 – details here 

Please note that to be represented in legal action campaigns you will need to upgrade to Lifetime Membership.

Lifetime Member – Additional Benefits

  • As a Lifetime Member you will never be required to pay more money in terms of monthly subscriptions
  • You will never be required to contribute to any action we undertake for the benefit of members.
  • You will receive a copy of the most comprehensive spreadsheet ever produced to allow you and your professional to fully analyse the impact of restrictions on mortgage interest relief for individual landlords. The spreadsheet will also calculate the alternative tax position based on incorporation and the costs and strategies associated with that.
  • You will be able to use the Property118 Action Group “Founder Member” badge on stationery, websites etc.
  • There will never be more than 5,000 Founder Members so you will be part of an exclusive club.

We also run quarterly competitions for Founder Members whereby the person who helps us to recruit the most members wins a 5 star holiday in Malta for a week.


Property118 Action Group Objectives 

  • To raise standards from suppliers of products and services to the UK private rented sector.
  • To increase the awareness of the social and economic benefits of a healthy private rented sector in the UK.
  • To ensure that greater consideration is given to consequences of legislation affecting the UK private rented sector before it is implemented.
  • To provide an effective deterrent to rogue operators preying on private housing providers, not only with a voice but also with teeth in terms of legal capability and they contacts and money required to back it.

Our vision is crystal clear, as are the steps we need to take, but we need YOUR help.

Together we are stronger

If just a few hundred landlords can take on the might of a rogue financial institution (and WIN!), just imagine what thousands of us can achieve!

When Property118 Action group took on the legal campaign to challenge the actions of West Bromwich Mortgage Company there were obviously doubters who said we would never raise the £500,000 required to go to Court, and even if we did we would lose. We proved them wrong!

The Financial Ombudsman Service had previously ruled in favour of the mortgage lender!

Ongoing Campaigns

  • Assisting with funding of a Judicial Review of the withdrawal of finance cost relief for individual landlords #TenantTax
  • Prosecuting agents who abuse their position and fraudulently use client money to fund their businesses
  • Challenging the Bank of Ireland decision to add a premium to tracker rate mortgage margins. Over 13,000 are affected! Some are landlords, some are homeowners.
  • Challenging Skipton Building Society breach of contract in respect of abandonment of their contractual commitment to cap their standard variable mortgage rates to 3% over the Bank of England base rate. Over 130,000 mortgage borrowers have been paying too much interest since 2010! Some are landlords, some are homeowners.
  • Challenging many more unreasonable laws, organisations and contract terms unfairly affecting the rights of our members

Axe The #TenantTax

Property118 Action Group has committed to pledge £100 to the “Axe The #TenantTax” campaign for every Lifetime Founder Member.

The #TenantTax is arguably the greatest threat to the private rented sector due many landlords considering selling up. Any reduction in supply of quality rental property will negatively impact letting agents and well as increasing demand amongst tenants, thus driving up rents.

In addition to providing funding towards the intended Judicial Review of #TenantTax Property118 Action Group has undertaken significant research and lobbying as well as using our official Google News Publisher website status to promote the cause. The Property118 website attracts more than 1.8 million unique users a year and is considered to be a centre of influence amongst mainstream and regional media groups.

Property118 Action Group Fighting Crime

There are many examples of landlords having been victims of fraud by abuse of position committed by their letting agent where Police and CPS have dropped cases due to lack of resource.

We have several cases ongoing where agents have used client money to pay themselves huge bonuses before putting their businesses into administration. As a result of the Police failing to get involved Property118 Action Group has been helping to raise the funding necessary to mount private criminal prosecutions on behalf of our members. Many of these are now coming to trial.

Property118 Action Group pay all initial costs associated with private criminal prosecutions where groups of 15 or more of our members have been victims of crimes perpetrated by the same business. The Crown picks up legal costs once Magistrates agree that a trial is in the interests of the public, regardless of whether the accused is found innocent or guilty.

Property118 Action Group vs Bank of Ireland

In March 2013 Bank of Ireland raised tracker rate mortgage margins. Over 13,000 borrowers were affected. Many of these originally took mortgages with Bristol & West which was taken over by Bank of Ireland. Two Barristers and one QC provided written opinion that they believed the Bank were in breach of contract. Sadly, Property118 Action Group didn’t exist then. Many of the affected borrowers initially expressed an interest in legal action. However, when it came to having to commit substantial sums of money to fund legal action their enthusiasm quickly dissipated leaving less than a few dozen of the more militant campaigners with the impossible task of raising the required funds. If each of those affected had only needed to commit to paying a one of fee of £600 or committing to a monthly subscription of £10 a month the position might have been very different, as would the level of media attention on the case as it progressed through the judicial system. Many of the affected borrowers have already overpaid 10’s of thousands of pounds. The Financial Services Ombudsman ruled the bank was within its rights to make the changes. However, following the Court of Appeal overruling the FOS decision in respect of the West Bromwich Mortgage Company rate hike, Property118 Action Group plans to take further legal action on behalf of its member in August 2016. All Founder/Lifetime Members with mortgages affected by this lender will be invited to be part of this legal action at no extra cost.

Property118 Action Group vs Skipton Building Society

In 2010 Skipton Building Society unilaterally decided to abandon a contractual commitment to cap their standard variable mortgage rates to 3% over the bank of England base rate. An estimated 135,000 mortgages were affected, many of which had been provided via their subsidiary company Amber Homeloans. The Financial Services Ombudsman ruled the lender was within its rights to make the changes. However, following the Court of Appeal overruling the FOS decision in respect of the West Bromwich Mortgage Company rate hike, Property118 Action Group plans to take further legal action on behalf of its member in August 2016.  Again we have the legal opinion of two barristers, both of which have advised that the lender is in breach of contract and that a Court is likely to award a full refund of all payments over and above what the mortgage contract allowed for. All Founder/Lifetime Members with mortgages affected by this lender will be invited to be part of this legal action at no extra cost.

About Property118 Action Group

Property118 Action Group FOUNDER MEMBERProperty118 Action Group is not insurance based, it is more akin to a Union which utilises member subscriptions to protect and fight for the rights of its members. It does not provide legal services but will procure them where necessary.

Successes in the Courtroom enhance our public profile and drive an increasing number of landlords to seek the security and peace of mind that only Property118 Action Group membership can provide.

As many landlords have learned to their peril; when it comes to funding litigation against mortgage lenders or the Government, legal fees insurance policies often prove to be about as useful as a chocolate fire guard. Furthermore, trade bodies rarely have the necessary experience, resolve, finances or other resources to get involved in action beyond referring their members to their preferred suppliers of legal services, the authorities or Ombudsmen.

Who is Property118 Action Group For?

The UK private rented sector is often described as one of the UK’s remaining “cottage industries”.

Private landlords own around 4.8 million properties providing housing for around 22% of the adult population.

There are thought to be around two million private housing providers (buy-to-let landlords) in the UK

Private housing providers (buy-to-let landlords) often lack the experience and finances to defend their rights. Membership of Property118 Action Group provides a unique and powerful umbrella at a very reasonable price.

Letting Agents are highly reliant upon a healthy private rented sector.

Reaching the market

Successfully defending our members’ rights continues to enhance our public profile through media based PR and reporting.

ARLA (Association of Residential Letting Agents) were the first to agree to promote Property118 Action Group at their landlord exhibitions, by having roll up banners on their own exhibition stand, handing out leaflets to attendees and signing up new members. From time to time we look for volunteers from our membership to represent us at events. Obviously we cover their reasonable expenses for this.

Naturally, we encourage our members to share the advantages of being a member of Property118 Action Group through social media, talking to friends, email and so forth.

We also run quarterly competitions for Founder Members whereby the person who helps us to recruit the most members wins a 5 star holiday in Malta for a week.

In 2015 the website had over 3 million page views from over 1.8 million unique visitors. The projection for 2016 is over 8 million page views based on the results in the first half of the year, trajectory of growth and the anticipated additional interest off the back of the win against West Bromwich Mortgage Company at the Court of Appeal.

Strategic Alliances

We continue to form strategic alliances with many more organisations representing large numbers of landlords or letting agents.

We have produced leaflets, logo’s, website widgets, and roll-up banners for use in offices, shops and exhibitions. These, along with other support in terms of copy-writing, Press Releases and joint PR are all available free of charge to any organisation that wishes to form a Strategic Alliance.

If you work with such an organisation please see this link

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NW Landlord

10:55 AM, 27th July 2016, About 7 years ago

To be honest 75% is the norm u have to jump through hoops for 80% LTV and the rates are a lot higher

Mandy Thomson

11:12 AM, 27th July 2016, About 7 years ago

Reply to the comment left by "NW Landlord" at "27/07/2016 - 10:55":

Yep - you're right. So much for all us over leveraged "BTLers" mortgaged up to the hilt as part of a high risk investment strategy. Of course, it does carry risks - the kind where the government pulls the rug out from under us by moving the goalposts on the say so of embittered landlord hating extremists!

Simon Hall

19:55 PM, 29th July 2016, About 7 years ago

Dear Mr Hammond,

Further to announcement made by your predecessor namely George Osborne on 8th Of July 2015 in which it was stipulated that from April 2017 he will no longer allow buy to let landlords to deduct mortgage interest from rental profits (gross rent) instead he will restrict this to basic rate.

I believe there are fundamental issues with this announcement namely, someone currently in basic rate tax bracket could be pushed into higher rate of tax based on gross income which was effectively an expense.

Old Rule Example:

£35000 (employment income).

£70000 Rental Income

£20000 ( Repairs, management charges, improvements).

£50000 (interest payments)

Result: No income from property received therefore no tax due and I have lived off my income from employment income.

New Rule Example: (Assuming 2020).

£35000. (employment income taxed at source).

£70000 Rental Income.

£20000 (Repairs, management charges, improvements).

Therefore my income from £35000 has now risen to £85000 despite the fact I have made no profits whatsoever. As such I would be required to pay the tax which as follows:

Tax on additional £50000 (gross rental) first £15000 taxed @ 20% = £3000. I have added £15000 at the top of aforementioned salary to maximise my basic rate threshold. (in 2020)

Remaining £35000 taxed @ 40% = £14000. Therefore total tax £17000. I will then claim 20% tax relief at 20% of £50000 = £10000.

Therefore my final liability in this example would lead me to pay £7000 tax. (£17000 - £10000 basic rate tax relief) considering I have made no profits at all, as such I would be expected to pay from my own net disposable income where I have already paid a tax. I feel that such measure would be grossly unfair and this certainly does not create "level playing field" between first time buyers and buy to let owners for following reasons:

Owner occupiers are currently not paying any Capital Gains Tax when they dispose of their property, nor are they taking any risks by taking buy to let property which comes with number of responsibilities namely, Referencing New Tenants, Gas Safety checks, EPC, Deposit Protection,Rental Arrears, Mortgage Payments to Lender regardless of whether tenant paid or not, Tax Returns, Repairs and dealing with day to day queries/problems with tenants.

In a nutshell, Buy To Let is a business like any other therefore tax treatment should be same as any other business. I am sure that you are aware that, Buy To Let landlords have been main supporters for your party and have hugely contributed to "Conservative'S Victory"

The Institute for Fiscal Studies quoted following words …..

“The Budget red book states that this means that “the current tax system supports landlords over and above ordinary homeowners” and that it “puts investing in a rental property at an advantage”.
In response the IFS stated ….

“This line of argument is plain wrong. Rental property is taxed more heavily than owner occupied property. There is a big problem in the property market making it difficult for young people to buy, and pushing up rents. The problem is a lack of supply. This change will not solve that problem”

Over the last two decades the development of new housing stock has been heavily supported through buy-to-let landlord purchases. Disincentivising buy-to-let investment will have a knock on effect to the development of social and low cost housing, which runs in tandem with most new developments.

Given that so many buy-to-let landlords will end up paying more tax than they are making in profit and that CGT is likely to render them insolvent if they sell up; how will this impact the banks balance sheets? At the moment the arrears book on BTL lending is comparatively strong against other forms of secured debt such as homeowner mortgages. The new taxation policy is likely to have a significant negative impact on this. The makings of a potentially banking crisis?

I can appreciate it might prove difficult for you to do U turn on your predecessor's already announced forthcoming taxation due to political repercussions however you could take following measures to reduce drastic impact:

1) New Taxation applied only to new debt from April 2017.

2) Transfer of existing buy to let properties into Ltd Company without any tax detriment.

3) Introduce CGT rollover for residential investment property in order to allow landlords with large portfolios to roll their assets into a corporate structure.

I am sure, you will give this matter a considerable attention prior to transpiring it into fully blown legislation and I would urge that,travesty of justice is overturned.

Yours Sincerely

Whiteskifreak Surrey

10:43 AM, 2nd August 2016, About 7 years ago

Reply to the comment left by "Simon Hall" at "29/07/2016 - 19:55":

Great analysis, Simon. The questions is - will he listen?
With all the anti-landlord publicity in today's newspapers?

Simon Griffith

11:23 AM, 2nd August 2016, About 7 years ago

I wouldn't hold my breath. RLA or NLA carried an article the other day where Hammond was talking about EPC's post Brexit/failure of Green Deal. Rather than offer anything positive he was more along the line of landlords can afford it and will have to pay. May will want votes in due course and like all Tories (I was one once) believe they are derived from home owners not tenants. I am now convinced JR/Brexit/New govt will make little difference. The anti-landlord attacks and rhetoric in the short to medium term will continue. There will have to be much more pain before things change. The only time things will change is when the rent increases brought about by landlords increasing rents to cover costs and the reduction of supply from landlords being forced to sell and the immigrant rush before EU exit et al increasing demand further become unsustainable. Then and only then will government have to accept that bashing the private rented sector was a mistake and should not continue. They will be forced to then support the sector before they confront the real long term solution for owners and tenants alike which is so dreadfully simple - build some more houses- to rent and to sell. All parties know this but it is much easier to bash us and distract than get stuck in with the hard work of driving up supply. Dreadful shambles.

Mandy Thomson

12:02 PM, 2nd August 2016, About 7 years ago

Reply to the comment left by "Simon Griffith" at "02/08/2016 - 11:23":

I believe you might be thinking of a question Philip Hammond answered in the Commons on 19 July:

"Craig Mackinlay (South Thanet) (Con)

I congratulate my right hon. Friends and indeed the entire new Treasury team.

With some softening of the market in house sales, will my right hon. Friend commit to looking at the data and consider whether the 3% additional stamp duty on second property purchases is necessary, desirable or indeed raises any additional revenue at all?

Mr Hammond

I can certainly commit to looking at the data, and I can tell my hon. Friend that my approach to taxation is that it is there for a simple purpose: to raise revenue for the Exchequer. I expect the taxes we put in place to achieve that."

Source: Hansard

The Telegraph carried this, but they misrepresented Hammond, as they cut the first part of his answer to Craig Mackinlay where he promised to look into the data.


16:50 PM, 2nd August 2016, About 7 years ago

Christine, when querying why buy to let properties get tax relief and homeowners don't you need to remember that the tax relief is INCOME Tax relief. If the house is used to produce income, a buy to let, b&b, hotel, holiday let etc you can claim this relief. If it's your home and it doesn't produce income how would you ever get a relief on income tax?

A bit like someone else's analogy with a car hire firm. They claim income tax relief on the cars finance costs. The private motorist can't because it isn't producing income. I guess car hire firms and taxis are pushing the price of cars up out of reach of private buyers. and supermarkets get an advantage buying food from farmers as they also claim income tax relief which I can't claim when I go to the farm shop. Bloody supermarkets pushing up food prices.

Off course if your home does help provide income, maybe you have an office or you store stock there then you can claim income tax relief.

It all seems perfectly fair and logical to me up to the introduction of this ridiculous clause 24 tax relief. Here is the Hmrc link to claim income tax relief on your own homes mortgage.

Alison King

17:10 PM, 2nd August 2016, About 7 years ago

Reply to the comment left by "Roanch 21" at "02/08/2016 - 16:50":

Re this: "Of course if your home does help provide income, maybe you have an office or you store stock there then you can claim income tax relief."

Indeed people making an income from letting out rooms in their own home are exempted from any tax at all up to £7500. Quite right too. Under occupancy is one reason for the shortage of homes and anything to help alleviate that is welcome.

Kathy Evans

18:26 PM, 5th August 2016, About 7 years ago

Reply to the comment left by "Alison King" at "02/08/2016 - 17:10":

I don't think anyone should be able to let rooms (even in their own homes) without paying tax on the income, especially as there is no protection for the tenants and the conditions can be appalling. If someone wants to help out a homeless friend, they can ask for help with bills and so on, but shouldn't charge rent. Anyone who charges rent should be subject to the same checks and responsibilities as a "normal" landlord - boiler checks etc.

Alison King

18:48 PM, 5th August 2016, About 7 years ago

Reply to the comment left by "Kathy Evans" at "05/08/2016 - 18:26":

The lack of equal treatment between landlords and everyone else is self-evident.
Most bizarre is the clampdown on HMOs, especially those that have had a lot of money spent on them to make them really nice, whilst at the same time citing under occupancy as social ill and penalising the poor with bedroom tax to encourage them to downsize or rent a room. The lack of consistency is staggering.

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