Warning to Government that families may be made homeless by Section24

Warning to Government that families may be made homeless by Section24

16:06 PM, 8th December 2016, About 5 years ago 21

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Former member of the Bank of England’s Monetary Policy Committee, Dame Kate Barker, has warned the Treasury Select Committee that families could lose their homes as a result of extra tax burdens on landlords through Section24 reduction of mortgage interest tax relief.Dame Kate

Dame Kate said that these changes will affect the housing stock and that many families who have been in their homes for a along time could be forced to move, “because the buy-to-let landlord no longer finds the yield acceptable or can’t afford it.”

To see the original article from Property118 on the effects of Section24 on landlords when it was announced in the Summer Budget 2015 please Click Here.

In an independent review of UK Housing Supply for the Government, Dame Kate indicated that hostility to landlords and increasing uncertainty about their tax treatment would likely reduce future investment in the PRS.

This has come after months and years of hard work and campaigning by the Property118 team and in particular Dr. Rosalind Beck who also made separate representations to Dame Kate. We believe we influenced her change of heart on this and are very pleased she has felt able to speak out against    Section 24.

To See Dr. Beck’s comprehensive report:time bomb

Section 24 of the Finance (No. 2) Act 2015: “the unjust legislation that will make the UK housing crisis much worse.”

CLICK HERE



Comments

by Ian Narbeth

11:36 AM, 9th December 2016, About 5 years ago

I have forwarded this to my MP with this covering note:

"You may be interested in this article: https://www.property118.com/warning-to-government-that-families-may-be-made-homeless-by-section24/93112/

I understand that about 20 Tory MPs now understand what is happening and are realising quite how stupid Osborne, Gauke and the Treasury have been to introduce this entirely unnecessary legislation. I hope you are in or will join their number. I also hope that other Tory MPs will have a “My God, what have we done?!” moment when they realise quite how bad this tax is.

The good news is there are two groups that are directly benefitting and will continue to benefit from s24. Banks, who are increasing their margins (my loans are costing more next year even though Base Rate reduced) and the “large corporates and funds who are supporting the Government’s housing agenda” (to quote the 2015 Autumn Statement).

Tenants are seeing their rents increase and individual landlords are seeing decent businesses built up over many years trashed. Investment by private landlords in the PRS is down.

Does the Tory party really want to be seen as the supporter of the banks and the large corporates against tenants and against individual (formerly Tory-voting) landlords? Make no mistake: the corporate landlords will screw their tenants right royally. Expect them to “make the assets sweat” to achieve the promised returns to their investors. Poorer tenants will be evicted and will have to turn to councils who cannot cope at the moment. If you think there is a housing crisis now, baby you ain’t seen nothing yet!"

by Anne Noon

12:09 PM, 9th December 2016, About 5 years ago

I didn't know about every property having to be licensed. But I have always ensured that I have the requisite smoke detectors in the kitchen and put fire doors in place, even though my properties do not have to be licensed. I recently contacted my Council and they confirmed that, even though they do not have to be licensed , I still have to comply with the Fire Regs. It will cost me about £1500 to do this, which I am happy to do so, as they do earn me a good living. As for the room size, that is a nonsense, my smallest room has never been empty; I discussed this with the Housing Officer and she insisted the 6.6 metre rule was good for tenants- what world does she live in? The price is low,( typically £100 less per month than my larger rooms in my case) and there are always single people on low wages who need somewhere to live. If our small rooms were unlettable, I am sure we would all have moved a wall to gain the extra space required to meet the legislation.

But if I lose that room then I too may consider selling that property - it is in a Prime Location , close to the station and if I spend a bit of money on a new kitchen, then it will achieve a good price and 4 tenants will have lost their home.

by NW Landlord

13:48 PM, 9th December 2016, About 5 years ago

The muppets are finally getting exposed its just scary these imbeciles in one sweep destroy so many lives up and down the social amd economic ladder. The amount of knowledge I have gained about politics since s24 was introduced is amazing heads should roll if this gets reversed for the misery stress and financial cost for no reason makes me so angry never vote Tory again

by David Price

15:14 PM, 9th December 2016, About 5 years ago

In the throes of a housing crisis we have a government which is constantly approving legislation which will guarantee to make the situation worse. Even the best non fiction writer could not make it up, unless of course he of she was also a politician.

by Whiteskifreak Surrey

17:14 PM, 9th December 2016, About 5 years ago

Property Wire reporting today and noting that tenants will be @squeezed dry of every penny':
http://www.propertywire.com/news/europe/tough-year-ahead-uk-buy-let-sector-according-lettings-agents/?utm_source=Property+Wire+News&utm_campaign=b0f8ac2e1a-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_cb0fe1dd73-b0f8ac2e1a-107788449&goal=0_cb0fe1dd73-b0f8ac2e1a-107788449

Indeed I agree with David Price - that even the best non-fiction writer could not make it up! It is a reality of the 21st century UK's supposedly pro-business government who vows that it will work for everyone (of course if everyone is not a landlord!). Never ever vote Tory again!

by Steve Wood

9:05 AM, 10th December 2016, About 5 years ago

I do hope this helps us. We start evictions next year due to this. It will be such a strain to the families effected. I am only holding off in the hope sense prevails

by Jonathan Clarke

15:46 PM, 11th December 2016, About 5 years ago

My rents have and will rise . My evictions of LHA tenants will continue. I think common sense - or rather cynical political sense - will only prevail if at all in about 2 years time when the general election is on the horizon. This is also when the increased tax burden will really start to bite especially for the currently blissfully unaware landlords.

The general population will increasingly get involved as they will become annoyed at getting tapped for some small change each and every time they venture out to the shops. The homeless will start to congregate together in fours and fives and could become quite intimidating in their desperation for food. Mini Calais style jungles may start to appear.

Homelessness will move up the political agenda as it is now in the face more and more for every day folk and we will gain support from quarters we maybe didn't expect or even know about at this time. When the argument is made out to them they will come on board

Concessions will be then be cynically made to try to win our votes and also to win the votes of all the associated care industries who have the increasingly overwhelming task to pick up the pieces of these demoralised broken lives caused by a failing policy and an ill thought out vision..

by Russell Thomas

11:42 AM, 13th December 2016, About 5 years ago

Everyday I read of reasons to drop the s24 and re think the stamp duty across the board. I have decided to sell three of my properties in London which will mean 2 couples will have to find new accommodation in a diminishing and expensive market and a family of 5 who will have no chance of finding a property within their price and local area who will have no option but to approach the council for housing. It will also mean disruption for their children as they will have to change schools if they cannot find a house locally.

I have know all these tenants for over 7 years but I am not prepared to subsidies them nor am I am willing to alter their rent to a level way beyond a reasonable increase and I know they cannot afford.

I am also not prepared to be the whipping boy of numerous governments whose failing taxation, housing and planning polices I and my fellow private landlords are meant to fix. We were their in the 2008 financial crisis to stablise the housing market, take up the slack and house the people who could not afford to buy. Unlike the banks who were helped or had handouts, and our contribution is just as significant, the landlords just got on with it supporting the housing situation rather than creating the problems.

I keep hammering on about the dismissive statement from various hostile ministers that the S24 will only affect the 1in 5 landlords. The reality is that it will affect 400,000 landlords and 2,500,000 tenants. Once the ministers and local councils realise this and acknowledge the considerable part we play in housing the better. If they still insist on implementing S24 they should make it for future properties not devastate the current stable market.

by bob the builder

8:59 AM, 15th December 2016, About 5 years ago

I am also a LL in London and have many long term Tenants, I have a system which builds in an increasing discount for each year their Tenancy runs which is now significant for several of them. As of next year I will be reverting all rental levels to current market rate and explaining the reason why in the letters to them and pointing them to contact their local MP if they are unhappy with the changes. And am I worried about them giving me notice if they see large rent increases ? Well have you tried to rent a flat in inner London recently ? So no I am not!

by Dr Rosalind Beck

9:33 AM, 15th December 2016, About 5 years ago

The RLA has written a good piece on this, making the link between Kate Barker's comments and the idea of the legislation being changed to apply to new purchases only. I know this is a controversial point and the legislation would still be mad on that basis; it would however get rid of about 90% of the damage that will otherwise be caused. Their article is here:

https://news.rla.org.uk/families-lose-homes-due-tax-rises/


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