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Chancellor urged to ‘breathe life back into the private landlord sector’

Buy-to-let landlords believe that today’s Spring Statement provides the chancellor Philip Hammond with an opportunity to bolster activity in the buy-to-let market, which has continued to slow primarily due to the previous chancellor’s tax changes.

A number of tax and regulatory changes have hit landlords’ profits over the past couple of years, including the scrapping of the ‘wear and tear’ allowance, the introduction of the 3% stamp duty surcharge, and mortgage tax relief cuts which simply do not add up for buy-to-let investors.

Landlords used to be able to deduct mortgage interest and other finance-related costs from their rental income before calculating their tax liability.


However, this interest relief is being slashed from 100% to 0%, with the change being gradually phased in between April 2017 and April 2020, and as a consequence the PRS is in need of a major boost.

Mortgage interest tax relief has unsurprisingly been identified as the top issue for buy-to-let landlords, with the disastrous consequences of Section 24 leaving many higher-rate taxpaying landlords with little alternative but to pass higher costs on to tenants.

Many buy-to-let landlords would also like to see the stamp duty surcharge on the purchase of additional homes, including buy-to-let properties, scrapped in the Spring Statement. 

Lisa Simon, head of residential at Carter Jonas, said: “With stock levels at their lowest for a generation and rental increases outpacing earnings, the government has almost singlehandedly destroyed the traditional lettings market.

“The introduction of stamp duty penalties applicable to the purchase of secondary residences or buy-to-let properties, exacerbated by the erosion of tax relief for small scale landlords, has forced many to sell up and vacate the market.

“We need to see urgent revisions to the stamp duty levies applied to buy-to-let properties – particularly for the small scale landlords who have kept the lettings sector going for decades, but who can no longer afford to remain in the sector.

“We would like to see the chancellor breathe life back into the private landlord sector, alleviating some of the operating costs that are, at present, driving landlords away and limiting the quality homes available for people to live in.”

Simon slammed Hammond for what she described as his “short-sighted, ‘one size fits all’ lettings legislation, designed to penalise small-scale landlords”, which has proved “devastating to the industry”.

While Build to Rent will increase stock levels of lettings properties, the model often fails to build homes where people want to live, according to Simon.

She added: “If the chancellor will only champion Build to Rent going forward, he must motivate the planning system to allow homes to be built in the right locations.

“Reforms in this area are compulsory if the chancellor is committed to shoring up the future of the lettings market – and provide a sufficient volume of homes for Britain’s future population.”

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Poll: Do you agree with Lisa Simon, head of residential at Carter Jonas, that the government has almost singlehandedly destroyed the traditional lettings market?


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    The Tenant Tax campaign met with him but he refused to listen or understand. He will not be changing his mind anytime soon.

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    • 13 March 2019 02:43 AM

    The incorrectly perceived political dynamics are such that no Chancellor will surrender the supposed political capital that S24 was designed to achieve.
    The fact that S24 has garnered no such political capital is beyond the idiocy of the Tories to comprehend.
    They do sincerely believe that S24 will garner votes for them from GR.
    Never before has such political incompetence been displayed.
    Govt would have done far better to abandon its ludicrous RTB policies and announce a mass social housing building programme.
    It is simply not the case that Council tenants vote Labour.
    Thatcher won largely due to former Council house Labour voters switching to her.
    Remember that S24 LL are just a thorn in the side of Tories.
    They make up only 25% of the PRS housing about 2 million tenants.
    So getting rid of mortgaged sole trader LL DOESN'T figure large in Tory concerns..2 million homeless tenants can probably be absorbed by the remaining PRS.
    Govt has managed to keep most of the homeless from public view by means of TA albeit very expensive TA.
    It is on the hunt for GR votes and so DOESN'T care about the effects on those dehoused by S24.
    There is simply no way that idiot Hammond with change party political policy.
    He won't be happy until he has exterminated all S24 LL which as mentioned is only 25% of the PRS.
    There is simply no way he will do anything to assist this part of the PRS.
    Indeed the evil propaganda that the BBC was allowed to get away with by calling tax relief for LL as generous tax reliefs when every other business has such alleged generous tax relief because without it taxing turnover would bankrupt most business and cause a UK wide depression just takes the proverbial biscuit!!
    But putting LL out of business by taxing turnover was seen as a worthwhile political exercise.
    Mortgaged sole trader LL should be under no illusions that S24 will continue.
    It will very soon be no tax relief at all on finance costs the logic of which is just the final outcome of S24.
    Such LL would do well to try and become unencumbered ASAP if wishing to survive in some form or another.
    NOBODY but nobody will be doing anything to rescue the private LL from S24.

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    Face facts, he isn't going to give us anything, so the only people we can go after are the tenants, and the tenants need to be told exactly why they are having to pay more.

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    turnover tax is coming to many other businesses

    • 13 March 2019 10:27 AM

    Difficult to see how a turnover tax would be rolled out to general business.
    Now obviously if Govt desired to get rid of all sole trader butchers for eg it would introduce a S24 version on finance costs.
    As far as I am aware Govt DOESN'T wish to tax other business on fictitious income.
    So I fail to see how or why a turnover tax would be imposed on other business.
    Govt only wishes to rid itself of leveraged sole trader LL.
    That is why it has imposed S24 on mortgaged sole trader LL.
    At some point potentially the mortgaged sole trader LL will be very few in number mostly having converted to corporate status or have exited the PRS.
    So taking the logic to the extreme the PRS will have 50% of leveraged LL who will have defeated S24.
    No Govt will accept being beaten on a major tax policy designed to eradicate leveraged LL.
    So at some stage Govt will have to tax corporate LL on turnover.
    The logic of S24 is to eradicate mortgaged LL.
    It simply cannot be allowed that mortgaged LL remain having escaped to corporate status.
    Govt should abolish S24 and just introduce PRA regulations to prevent all new loans for new purchase property being anymore than 50% LTV.
    Instituting this would still allow sole traders to remain in business but would be prevented from purchasing in future due to increased LTV requirements.
    LL would have to invest considerably more in deposits and there will be still the onerous SDLT surcharge.
    But at least the remaining rump of mortgaged sole trader LL could retain existing properties preventing many tenants being made homeless.

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    this government has completely lost its way...it is showing its prejudice towards landlords who are doing well, the HMO licencing scheme,the stamp duty, its all a show of we dont care about you doing well we want to take your money...they simply cannot justify stamp duty it is a ridiculous tax and should be abolished...i am about to purchase another property, stamp duty is 73,000 pounds...that is ludicrous and will take 10 years plus to recover from the rental...

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    • 13 March 2019 16:07 PM

    It is clear that the SDLT surcharge was meant to be aimed at LL purchases.
    As such the Govt should show it's hand and only levy the SDLT surcharge on LL purchases.
    Dragging in normal resi purchasers has caused a slump in movement by resi homebuyers.
    I'm sure it was never the intention to impede the purchase of 2nd resi homes.
    Clearly it was a policy aimed at LL to disincentivise further investments.
    This has very largely been successful.
    But it has had the knock on effects of preventing resi owners from moving or buying additional resi properties for personal domestic use.


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