Paragon report shows landlord’s no. 1 priority is reversal of Section 24

Paragon report shows landlord’s no. 1 priority is reversal of Section 24

12:58 PM, 10th July 2017, About 7 years ago 3

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Paragon Mortgages’ Private Rental Sector (PRS) Trends Report for Q2 2017 was based on interviews with 201 experienced residential landlords.

The landlords surveyed were asked to list in order of their priorities the steps they would most like the government to take next to help with their rental businesses.

Number 1 priority was the reversal of Section 24 mortgage interest relief reductions for individual landlords announced in the Summer Budget 2015 by the them Chancellor George Osborne and now being phased in from this tax year.

Number 2 was a request for NO more changes and a period of stability.

Number 3 was for a government exemption of SDLT and CGT for landlords incorporating their portfolios into limited companies. Of the landlords surveyed 11% had already taken action to incorporate and mitigate the mortgage interest relief reductions.

The report also showed that:

  • 20% of landlords were to increase their rent
  • 20% were looking to sell property or buy no more for rent
  • 18% were looking to decrease their mortgage exposure
  • 88% up from 71% six months ago now say they understand their tax implications from Section 24

John Heron, MD for Paragon Mortgages said, ” Having taken active steps in preparing for a difficult period of transition as the tax relief changes continue to be phased in, landlords are now facing up to the challenge ahead.

Higher tax charges for landlords have combined with a general increase in uncertainty to drive confidence levels down. However, whilst there are signs of lower demand it would appear that property yields are being maintained and that void periods are close to historic lows. This would suggest that despite the negativity around the market that the PRS continues to perform well.”

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Dr Rosalind Beck

13:41 PM, 10th July 2017, About 7 years ago

We are getting more and more positive news like this, I feel. In the early days of the campaign, these kinds of public comments were very thin on the ground. Now they feel pretty commonplace as more and more organisations are seeing s24 as the idiotic policy that it is.

Richard Mann

17:25 PM, 10th July 2017, About 7 years ago

Is there any positive news regarding s24? Are we progressing in any way shape or form?

Mike D

8:52 AM, 11th July 2017, About 7 years ago

There are supposedly 4.5 million rented properties in the PRS with 1m landlords……of which 75% of landlords only have 1-2 properties, the presumption i think is that the 1 in 5 affected landlords are BIG portfolio landlords, not incorporated, and i also presume only those with big LTVs…….we will see the fall out, but it doesn’t look like that on the sales front to me landlords are selling and its clear from the figures that there is little buying going on!
IF 20% increase rents, then be sure another 40-50% will follow because they can,
(I'm putting one house up to market rent as tenant changes, that's a 13.5% increase, and looking to raise others by 8%)
IF 20% sell that's a Million homes lost minimum to the PRS (where will those families go?), that will take many years to be replaced again, but i think this could be higher as if you have 1-2 properties, your a 40% tax payer, then most probably the houses are costing you money or making very little, so to go to debt, it would be easy to sell up. (suspect the wise professional LL selling them earlier to avoid flooding the market and house price falls, however not so savy single owners, will make that change on the 1st/2nd tax bill will losses mounting i believe.

So for me the real crisis will start in late 2018 and become a massive problem by late 2019, with potential for house prices to fall by 5-10% till 2020.

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