Points and questions for my Labour MP – Have I missed anything?

Points and questions for my Labour MP – Have I missed anything?

0:02 AM, 31st January 2025, About 3 weeks ago 20

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Hello, I am having my first video call with our local Labour MP later this week. I have sent an email before our discussion. Let me know if I have missed anything?

Please see the email below:

Government policies are inadvertently contributing to homelessness and increases in house prices and rents

Landlords operating in the PRS should be encouraged and not vilified for political reasons. Landlords are selling up and new investors are not coming into the market to replace them for many reasons, some of which are as follows.

Section 24

An old Tory tax raising policy that Labour are happy to continue to benefit from. This is the only system that taxes a business on turnover and not profit! Landlords can make an actual loss but still have to pay tax on a fictional profit. No wonder very few people see being a landlord as a viable business proposition.

SDLT (Stamp duty land tax)

Once again, landlords are being single out, and treated differently from any other business. In the Budget, Rachel Reeves announced stamp duty surcharge on additional homes would  increase from 3% to 5%. They are taxed at a massive extra rate when buying an investment property making new investment un-viable. Another reason not to invest your money into the PRS and to look elsewhere.

Section 21 abolition

Nearly 70% of property professionals have issued S21s due to rent arrears (NOT for dodgy reasons). When we have to give a reason it will become apparent what the actual scale of rent arrears are in this country.
S21s are also used when an anti-social tenant scares all the others in a block. The good tenants will not go to court and stand as a witness if using a S8. They just leave instead!

The courts have massive backlogs and are not ready for the massive influx of S8 notices. All evictions will require a written reason and have to be heard in court. It takes many months to regain possession of a property (even now) and the tenant will often not be paying anything and causing problems with the adjoining flats.

The courts are not ready for the change and this will cause chaos. The landlord is faced with massive debts for repairs and cleaning and have no recourse to recover unpaid rent.

Universal Credit—Housing Benefit

The High Court has declared the Department for Work and Pensions’ (DWP) method of deducting rent payments from tenants in arrears from UC recipients unlawful. Apparently, it’s because the claimant felt “unempowered”. Who would rent to a tenant on UC if you can’t use a UC47?

Selective Licensing

This is used by local councils as a revenue collection tool. It does not require a landlord to do anything new that is not already covered in law. The fee is payable up-front for a 5 year licence and cannot be moved to a new owner. If the license is against the landlord, why does he have to apply and pay in full for each property he owns? More reasons to leave the PRS.

EPCs

Requiring landlords to meet and EPC C targets by 2030 will make a massive part of the rental stock unrentable. Owners cannot afford the upgrades and there is a national shortage of contractors to do the work. The current EPCs are not fit for purpose and do not reflect the true value. Also, what about social housing? Once again, landlords are being scapegoated and singled out for discrimination.

Forcing landlords to accept pets

Whose asset is it? Ridiculous.

Notice periods and periodic tenancies

When the Renters’ Rights Bill comes in, all tenancies will be periodic from the start. A tenant will be able to give 2 months’ notice on day 1 and the landlord will still have to give at least 2 months notice.

Using the S8 route, it will take many months to regain possession of a property with a bad tenant. There is no security for the landlord and he/she risks having to pay all the costs of finding new tenants and repeated void periods. If a landlord needs to realise their investment (plans do change) they cannot use this ground of the Section 8 until the tenant has had 1 year’s occupancy. Any other investment gives you control of your assets.

Rent Controls

Fortunately, we have not (yet) had rent controls enforced upon us as a sector, but we are aware of calls from many agencies demanding this, including the Mayor of London and the likes of Shelter and Crisis. Rent increases are a consequence of increased legislation and taxation. If controls are put in place many landlords will have literally no choice but to sell up and leave the PRS. Why would we go through the vilification and victimisation for being a landlord, only to make a loss at the end of the year?

Professionalism

Apparently, this is all moving the PRS into a more professional era. This means larger corporations taking over the sector and small, private landlords leaving en-masse. After all, Sir Kier Starmer said that landlords “do not fit his definition of working people”. What an insult. Just try working with us for a day and see what we do as ‘non-working’ people!

More Landlords Selling

54.5% of Landlords are exiting the PRS. Only 11.9% of these properties are being sold to other landlords. Where will everyone live that’s being evicted?

Landlords will be required to give longer notice periods to get their property back, or to increase the rent. Tenants will be able to query ANY rent increase which will delay it (and it cannot be back-dated to when the increase should have been from). Just another way to reduce any profits a landlord may be making.

Renters’ Rights Bill

Clauses 13 & 14 will severely affect tenants on low incomes, with poor credit history or self employed or people on variable income. Clause 13 prevents collecting several months’ rent in advance and clause 14 prevents collecting a month’s rent before signing the tenancy agreement.
Who would take tenants that may not be able to pay their rent? Once again, this will adversely affect the people it is meant to protect.

Is it time for a Landlord Equity Bill?

Discrimination takes many forms but financial discrimination is S24 where landlords are treated more harshly than any other business.
The ridiculous claim that tenants are not responsible and contributors for many of the issues like damp and mould need to be addressed.

An energy assessment system that works and isn’t based on false and incorrect assumptions should also be adopted.

Recognition that non payment of rent is tantamount to theft, and in many cases more stressful, as landlords are open to repeated thieving.
A recent court case awarded a tenant £5000 for illegal eviction when they owed £17,000 in rent. Such laws need to be changed to bring a balance as this can’t be seen as equitable.

The Bank of England should be brought to book for raising interest rates to double its own affordability rules. Then, instead of supporting people with borrowings, they scrapped their own affordability rules and allowed lenders to feast.

Lenders have created huge problems, like The Mortgage Works, by raising interest rates to more than 8% in a so-called SVR after deals end.

Equality would prevent them from hiking rates by more than, say, 2% or the current BoE interest rate.

Many landlords go through hell when they are up against difficult tenants, the pressures often appear unbearable. A support system needs to be made available with fair and fast resolution.

Any other suggestions?

Thanks,

Mark


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Jamie Finch

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9:19 AM, 31st January 2025, About 2 weeks ago

All excellent points, I would add that the crazy situation of not being able to deduct interest payments as a business expense is actually the most fundamental problem. It unfairly favours the rich and large companies and discourages small investors for whom it's not worth owning property via a Ltd company.

It is anti competitive, anti aspirational, contributes to homelessness and I for one am not aware of any other business that is not allowed to deduct interest payments as an expense.

Good luck

Jamie

Mick Roberts

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9:48 AM, 31st January 2025, About 2 weeks ago

Great description, I'll add mine again, feel free to copy & share anyone.

WhyTenantsCan'tGetHouses

A background to why you tenants are paying extortionate rents and can't get anywhere unless you earning a cracking wage-Blame the Govt and Councils you vote for because you like it when they give more regs & rules to the Landlord-Guess who pays for this? You do.

I'm the biggest private provider to Benefit tenants in Nottingham over 27 years and not once has the Govt and Council come to ask me What they can do for me, so I and my colleagues will take the people we used to take. I will add to this list as I remember more.

They wanted Pet deposits banned.
Cause we'd want £100 more in case dog did damage.
End of tenancy, dog did no damage, tenant got all deposit back.
2019 you banned higher pet deposits cause some tenants didn't like it when dog did damage & didn't get their deposit back.
We stopped taking pets.
2024 MP stood up in Parliament and called for Pet deposits to be reinstated cause tenants with pets couldn't get accommodation.
You couldn't make this up.
Description here https://docs.google.com/document/d/1u54ouYTdNr7WaCPYW18Q_tZdlJr8-VwSUJpE0IcPf5k/edit?usp=drivesdk

They don't want Landlords helping tenants with Benefits and they bought in Universal Credit which has zero communication with Landlord- We now don't take Benefit tenants.

They bought in Selective Licensing on good Landlords with good houses. We put the rents up to cover it and now don't take risky tenants.

Landlord can get fined £30,000 if tenant takes battery out smoke alarm and Landlord CAN'T prove that tenant did it.

Landlord can get fined £30,000 if renting 1 bed flat to single person and he/she moves his/her partner in unbeknown to the Landlord if the Selective License only has license for one occupier.

They started fining Landlords £5000 if they didn't check tenants passport properly on Right to Rent checks-Landlords stopped taking anyone that had the slightest chance of being illegal immigrant. Innocent UK citizens suffered.

2015, they bought in that if Landlord CANNOT PROVE he/she has gave tenant boiler certificate, you can never get your property back. Even if had a new boiler 5 years later, Judge says Not bothered, u not having your house back. This helped the current bad tenant, hurts the next 100,000 tenants waiting for a home. A purely Anti Landlord measure to stop Landlord getting rid bad tenant or having his house back.

Oct 2024 Unison now wants a rent freeze. Ooh are we a charity are we? What other individual who sells or provides something is told YOU CANNOT charge a price u wish?

Oct 2024 the Renter Rights Bill is going to make it law, u can't do rent increase unless use Section 13. Now for years, I've agreed informally with tenant 'Ok £25 a month, u still £200pm now below anyone else.' Job done.
Now, I'm totally full up with paperwork and rules and regs. I have no more time. Section 13 some more say only a few mins. It's still 30 mins by time printed, filled in, signed, scanned, sent. Each one when u have lots of houses on top of Selective Licensing INSISTING we inspect each house every 4 months (two weeks solid just on inspections every months) is taking me over the edge. My existing tenants are going to have to go with Letting Agent who charge £50 for a Section 13. That's £4pm extra on the rent. Along with the extra £80pm Letting Agent fee which gets rid of cheap rent was charity.

Sep 2024 Ed Miliband MP wants all houses to EPC C which will cost Landlords £5000 and increase tenants cheap rents. As soon he announced this, he made more tenants homeless. Few words on that here: https://docs.google.com/document/d/1eI7z29SNRCDLLwX6_0QQChrwTxZ4jGZw4UNybVYfD1s/edit?usp=drivesdk

Section 24 Tax bought in by George Osborne of the Tories who said it will only affect 1 in 5 Landlords-That's over 2 million tenants put at risk of homeless. Landlords with tenants of 25 years are now being made homeless on this one action alone.

Oct 2024 I've heard there's a part of the RRB that says we must give tenants our home address on paperwork.
Details of that here: https://docs.google.com/document/d/1v7aETrvz0j6CdS7LZwYukthZAbhNxLWRKR8qShi6Gok/edit?usp=drivesdk

Every anti Landlord measure they bring in to they think will help the tenant has hurt the tenants massively.

Every time the MP's talk an anti landlord measure, they've made more homeless and increased rents.

There is loads more

Jason

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10:38 AM, 31st January 2025, About 2 weeks ago

All good points but I personally would deprioritise the ones that are speculation such as EPC/rent controls as nothing is actually happening here…. Yet.

S24 was brought in by the Conservatives too long ago and I personally think that because its classed as an investment and not a trade and effects 40%+ tax payers you are wasting your breath revising this conversation now. But yes hit them on the SDLT increase.

The UC direct payments case is a bit of a red herring and I would avoid it even if you did take direct payments if the claim was false then DWP would come after the landlord for the money back.

I would hit home the points that directly affect you personally then lead into what’s happening in the wider landlord community otherwise its just comes across rightly or wrongly as a whinge list.

Good luck!

I have a reform MP so no point in me writing or meeting with mine.

Judith Wordsworth

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10:51 AM, 31st January 2025, About 2 weeks ago

EPCs. Might be worth asking what happens when EPC minimum C becomes mandatory with a tenant in situ and the property not minimum C.

ie
1. Is the tenant evicted, by whom or by Landlord under which s8 proviso, without notice?
2. Is the tenant allowed to remain in the property even if works cannot be done to upgrade to an EPC C?
3. Is the tenant allowed to remain in the property until such time as an exemption is granted? And if not granted then has to move out immediately?
4. Is the landlord automatically fined on the date the Bill becomes law?

NewYorkie

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11:19 AM, 31st January 2025, About 2 weeks ago

Good enough list to frighten the MP. I'll be interested to see what his reaction was.

Paul

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11:19 AM, 31st January 2025, About 2 weeks ago

Reply to the comment left by Jason at 31/01/2025 - 10:38Hi Jason
Constructive comment!
I don't agree that you don't need to talk to your Reform MP. Even though Reform's manifesto is more favourable to the PRS your MP is probably not an expert on the PRS and needs to be informed so he can make the necessay points when the subject is discussed
Paul

Ryan Stevens

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12:07 PM, 31st January 2025, About 2 weeks ago

Just a clarification on S24, where you say:

"This is the only system that taxes a business on turnover and not profit! "

This is incorrect, you are taxed on profits (not turnover) before interest at your highest marginal rate, say 40%, but only get tax relief for interest at 20%. So you can have a loss after interest, but still have to pay tax!!

Freda Blogs

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12:36 PM, 31st January 2025, About 2 weeks ago

In a nutshell, it’s all about risk and return.

Government proposals are making it too risky to be a LL due to fear of not recovering possession when required, combined with draconian and disproportionate fines for even minor/accidental infractions of the legislation.

Alongside ever increasing costs, the inability sometimes to raise rents and the subsequent endless ability for tenants to breach tenancy agreements with impunity (with the agreement of judges), is it any wonder that LLs are unwilling to go through all that pain and risk significant financial losses when equivalent or better returns are available on passive investments? It’s hardly rocket science.

Rod

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12:47 PM, 31st January 2025, About 2 weeks ago

I agree with most of the issues raised.

S24 - unintended consequences include skewed income for assessments, such as student support grants. Also not recognising the interest cost to calculate taxable profit pushes landlords to higher tax rates of 40%, and then 60% when taxable income (artificially) exceeds £100,000

LHA rates frozen - impact the poorest in society

Removal of FHL relief means no residential landlord gets tax relief on pension investments from their rental income, also no retirement or rollover relief

CGT - only landlords forced to pay within 60 days of sale, so not only is there no rollover relief but we are denied the timing difference to use the funds to reinvest then refinance

On the positive side - more regulation will bring a higher barrier to entry. This wider moat will require larger capital pots and larger operators with more staff and higher costs, so companies with staf paying the new NIC. This in turn will mean higher rents and higher profits that provide higher taxes, so we can put up minimum wages, and benefits to contribute to growing GDP. And so the money from the magic money tree goes off on the bloated circle.

Can we have a public enquiry into this?

Jason

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14:23 PM, 31st January 2025, About 2 weeks ago

Reply to the comment left by Ryan Stevens at 31/01/2025 - 12:07
Unless the OP is affected by S24 I wouldn’t mention it. Any serious new landlord entering the BTL market should do so via an SPV. So S24 is really for existing LLs >40% in personal name this ship sailed nearly a decade again with the Conservatives.

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