Refurbishments cost loans – clause 24Make Text Bigger
We are property investors between Salisbury and Southampton and we wrote to Mr Rob Marris (Labour MP Wolverhampton South West) who spoke in the House on Clause 24.
We own seven houses which are let to families with children and we pride ourselves on the standard of accommodation. We like to refurbish the properties either every 10 years or when they become vacant at suitable periods.
The main expense is renewal of kitchens and bathrooms. Typically these cost 13 to 20 thousand per home, and we would finance this over a five year loan on each property. The costs of such borrowing interest and fees etc will now be disadvantaged by the measures under clause 24 make such refurbishments non viable.
Either we do not now make refurbishments resulting in poor quality housing stock or we evict the tenants and sell up. We would prefer to refurbish and continue to offer long term tenancies to long term tenants.
I received an email from Mr Marris which shows he does not understand the effect of the legislation he proposes. He told me his understanding was that:
- Maintenance is an allowable expense
- Wear & Tear Allowance covers furnishings and equipment.
- Expenditure on improvements may reduce CGT on sale.
Rob Marris MP
We are talking about a loan for property improvement for say five years on a house we have owned for some time. I am aghast to see he is speaking in the house about legislation which he does not understand.
He is clearly not familiar with the property market as we will be outbid in seven out of eight times we make an offer for a property by owner occupiers. Despite this he feels that we are depriving owner occupiers a home. There is a big demand for our houses from tenants.
We will be sure to make the evicted tenants well aware that this measure is forced upon us by Government.
How much misery and homelessness is Osborne willing to cause to effect this measure?
George Osborne is a very clever man. He knows that there is a tendency for owner occupiers to vote Tory and tenants to vote Labour. By introducing clause 24 he hopes to increase the number of the former and reduce the latter .
If he achieves his objective many private landlords will sell up and put their tenants out on the street. Is your local council equipped to house this new stream of misery? Will these disenchanted voters return your party to office when it becomes clear that your fingerprints are all over this?
These private landlords will be replaced as owners either by true blue owner occupiers or corporate landlords who will be rate of return on equity driven. Consequently they will be much less benevolent Landlords.
Whose side are you on? There is a huge opportunity to save the tenants ( your natural supporters) an uncomfortable ride.
Do let us know?
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