renters should support their landlords against the government

[carmellas3]

The government are starting to tax landlords more (removal of interest tax relief and ware and tear rules). If nothing is done renters will just end up paying more for rent and landlords fees increase.

There are some bad landlords, but the vast majority just want a stable income and provide a good service for people to rent.

I think the time for landlord bashing has ended.

We are crying out for the re-introduction of rent caps and fair rent. If landlords no longer made enough for this to be viable they could put their houses on the market and if there was a flood of fresh housing stock that would bring the prices down to affordable levels for people who want to buy homes to live in not just as investment portfolios.

Carmella it's naïve to say no one has to rent if a place is substandard. In many uni towns or in London people have no choice but to take what they can afford, regardless of its quality or take what's on offer as there are more people needing homes than places to let. There was a story in the paper not long ago about a bunch of students who built a house out of hay bales, and while I massively admired their attitude, it made me so sad that in 21stC UK, people are reduced to living in shanty towns while studying.

I am a renter and very happy to be one. My rent is really affordable and repairs are always done promptly. However, my flat is owned by a lettings agency rather than an individual and I do think it's better that way, as it's not subject to their own personal hardships.

I wish we could buy a plot of land and just build a simple home using traditional/green building methods.

MIRAS was only for up to £30K when it was available to owner occupiers

Mortgage interest relief at source, or MIRAS, was a scheme introduced in the United Kingdom by Chancellor of the Exchequer Roy Jenkins in 1969 in a bid to encourage home ownership; it allowed borrowers tax relief for interest payments on their mortgage.

In the 1983 Budget Geoffrey Howe raised the tax allowance from £25,000 to £30,000. Unmarried couples with joint mortgages could pool their allowances to £60,000, a provision known as Multiple Mortgage Tax Relief. This remained in place until the 1988 Budget, when Nigel Lawson ended the option to pool allowances from August 1988. Lawson later publicly expressed regret at not having implemented the change with effect from the time of the budget, as it is generally accepted that the rush to beat the deadline fuelled a sharp increase in house prices.

MIRAS was completely abolished in April 2000 by Gordon Brown, who argued it had become a middle class perk.

landlords with their 'business' can claim for an unlimited amount of interest so not exactly the same thing. Out of interest MIRAS was part of the push for Endowment mortgages where mortgages were 'interest only' but running alongside an endowment to pay off the mortgage on maturity and there was nothing wrong with the idea at the time. I know I had one.

I am a commercial property solicitor but out of work regularly end up helping out people I know who are renting and the lack of protection for residential tenants at present is appalling and the way most landlords act is utterly shameful.

I would like to see much more done to stop BTL squeezing out first time buyers. And much more protection for those who do rent.

£60k would have bought a decent family home in the 80s though.

QueenStromba - "Yeah, I really don't think there's a housing shortage in London"

there isn't, you're so right. I get really annoyed when politicians start on about building more houses because it's a red herring.

Meanwhile in my area they have got rid of social housing and replaced it with private blocks about twice the price of my own (perfectly decent) flat. And told the people that some of it will go for "affordable" rates which I believe is set at 80% of what the market price would be. It's a joke.

I'm pleased to see this thread though because it underlines my feeling that many many people, including property owners and landlords, want to see a market correction.

I wish we could buy a plot of land and just build a simple home using traditional/green building methods.

you can, with planning permission. Happens a lot near here although everyone seems to want to build four huge detached houses 'for the children' on a tiny plot. And no, we aren't in the bottom right hand corner.

And I think bricks are fairly traditional.
however it is not 'green' to build on more land.

housing is too important to be classified as a way to max profit.

exactly, achieve. Wish the government recognised this and acted on it.

The planning permission is the sticking point if you want affordable land though special.
Not explaining myself well,and more musing really.
I spend too much time looking at places in the States,where of course they have far more land,and wishing I could just slope off and erect a little cob hobbit house in back of beyond.

They have been relaxing planning permission - brownfield sites now have automatic planning permission, for example.

planning permission also seems automatic round here, although the council is so slow that the buyer will probably die of old age before it comes through.

brownfield should indeed be first up.

There are whole towns that you can buy in the States for not much. No services, no natural resources, miles from anywhere of course!

Arguably it's an interference in the free market when owner-occupiers pay mortgage interest, and investors don't.

And if someone can't afford to buy they are indeed forced to rent.

Rent controls would be a very bad idea, its interference with the free market and might discourage people from investing their hard earnt money in providing a service for renters. If they all stuck their money in gold where would the renters live?

If people stuck their hard earned money in gold, instead of speculating in property, the competition for housing would fall and so would prices. Simple operation of that free market you so appreciate. So "the renters" would once again live, for the most part, in homes they'd been able to buy.

sleep investors still pay mortgage interest but are allowed to offset it against the income they receive from letting the property

Yeah, I know the mechanism. The result is the same: it's not paid. And while I appreciate that no business pays tax on anything but profits, given the huge social cost of allowing that kind of advantage to only one variety of purchaser I think there should either be an offset allowed to owner-occupiers, too, against earnings, or none to any buyer.

It's just generational apartheid. Those born at a certain time were able to buy properties cheaply to raise their families. One property wasn't enough so they have deprived millions of young families from having any security or space, or wealth for their own families. Not only did the older generation have cheap housing but they also had free universities, much better pensions, early retirement, a much better NHS etc. Apparently young people shouldn't be wasting all their money on £300 iPads and £200 mobile phones and should instead be saving their minimum wage from their zero hours job in order to pay £300k for the ex-council property the older generation bought for £15k.

Landlords are going to have to be taxed to the hilt in a few years time when all the 30 and 40 year olds that have priced out can no longer work and require accommodation, how else will the huge housing benefit bill be funded.

I'm an (accidental) landlord and agree with the wear & tear change. Why should I or anyone else be able to offset a significant proportion every year for expenses not actually incurred ?

The proportion that I actually spend on replacing things due to wear & tear is minuscule compared to what I claim for and that's not because I'm tight and don't replace things, but because I've had very good tenants who've looked after things and because the furnishings, white goods etc were good quality in the first instance so haven't needed replacing.

Being able to offset all the interests has made it too easy for me to hang on to the property as well. If the changes mean some landlords are forced to sell then thats a good thing for society as a whole.

I have no sympathy for landlords being made to pay tax. Housing is too important to be controlled by uncaring leeches who can't be bothered to maintain their properties and borrow money to buy up a basic living requirement and sell it on at a profit to those poorer than themselves. If middle-aged people were borrowing money from the bank to buy up all the value food in the supermarkets and sell it on at a profit to 20-30 year olds who'd starve if they didn't pay the inflated prices there'd be riots in the streets, but that's basically the situation we have with large swathes of housing in this country. It's immoral and any landlord who says they are providing a service is kidding themselves.

On a related note, the government is currently doing a consultation into how to punish dodgy landlords who break rules and leave their properties in a dangerous state, overcrowd them etc. There's a survey here: www.surveymonkey.com/r/CLR9WGX

This is the consultation paper for the survey: www.gov.uk/government/uploads/system/uploads/attachment_data/file/450862/Discussion_paper_FINAL.pdf

Please fill out the survey if you have been a tenant and experienced awful landlords like I have. Personally I think landlords who persistently and deliberately endanger their tenants should go to jail and have their savings or property seized under proceeds of crime, not just get a small fine.

groupon44
ageist generalisation and totally untrue except for perhaps 10% of retirees
I could correct all your free universities, final salary pension for all diatribe but I really cannot be bothered as it has been refuted in so many other threads that turn into 'boomer' bashing.
there are lots of people in their 40s and 50s - who have BTLs
there are lots of people in their 20s and 30s who inherit a family home and 'get tenants in'
age is not a factor - wealth is.

We looked into renting and I feel so sorry for renters.

Were buying a house and borrowing 140,000 and only put a 5% deposit down yet are mortgage will be £665 a month for a 3/4 bed house with a conservatory lovely garden and drive for 2 cars.

For a house in the same area for 3 bed. Okay sized rooms. Small garden and drive for 1 car I seen rent was £1000.

And for the same but 5 mind down the road they wanted £1400

It's ridiculous I don't know how someone can afford renting.

If we rented then we'd never have been able to save for a deposit. The market needs to change.

Group I think people should have to save to buy a house if that's what they want. Rather than moan about it.

Me an oh wasn't on good wage for a few years as we're young and we managed to save in an area where house prices are particularly high. We went without to be bale to buy a house.

That's how it works.

Course when I seen the documents come through saying the seller bought their house for barely anything in 1984 it stung. But that's the market these days.

1. There are a few errors in the first post. Landlords will continue to be able to claim for wear and tear, replacing items in the home etc. All that is going is an automatic right to say that is 10% a year. It may well be provably 20% in one year and you will continue to be able to claim whatever the figure actually is. All that is going is the alternative basis which is an authoatic 10% set off against rent. It does NOT mean you cannot claim anything for wear and tear as obviously there is wear and tear and you will have to fix things and of course is deductible from rent in working out profit.

1. The other error is to say tax relief is going. Instead where a landlord borrows to buy a property the interest continues to be deducted from the rent under the new system unless the landlord pays higher rate tax. (Mnay landlords make no profit over their costs even under the new basis so will continue to subsidise tenants unless property prices rise when they might indeed make a capital gain taxed at 28%).

1. I remember rent control - just. There was just about no property to rent in the UK. It was not some golden nirvana where everyone got a council house. Instead people slept on their mother's floor for years or lived with grandparents.If you have no right to remove tenant ever even for non payment of rent and they are on £10 rent a year (I know two men in London one with a place near Bond St who still have a rent controlled private letting and one with a house in Kensington and they pay absolutely tiny amount of rent under the old rent acts and have for the last 45 years!).

1. The UK legislation is chocabloc with protection for tenants. You cannot go in there and change the locks and cut off the power because the law requires even if your tenant is not paying the rent you have to go to court at massive expense and wait 3 months whilst they are trashing the place and still not paying rent before you can get them out.

Rent will not go up because rent is set by what the market will bare. You're already charging as much rent as you can. Not all landlords will be affected by this, just the over leveraged idiots who have been depriving young people of the opportunity to buy using the unfair tax advantage. It was about time that this loophole was closed and I'm looking forward to the removal of all mortgage interest tax relief.

^ this. Why should the government pay the interest on a loan you took out to invest in property when we actually live in our house and get no such help?

The rentier class and its tax breaks distort the housing market appallingly. It should be fixed. YABVU.

Yes, basic rate claim only.
A landlord to date has been like any otherb usiness. If I buy peas at £1k and sell them for £1.01 then my profit is 1p and I am taxed on that. Simiarly if a landlord takes in XYZ rent and expends ABC expenses then the tax is on the profit otherwise you are taxing people on money they do not have!

Some landlords have no mortgage so are not affected by the interest rate change.
Others are basic rate tax payers anyway even if the rent is included - lots of retired people with a state pension etc
Thirdly some will have a wife or other relative with no income whose name the property is in so are unaffected.

But yes some landlords will have a bit less tax relief they can claim so the property will become less profitable. Today's papers are referring to a povery action group saying 1 in 4 let homes could be repossessed if interest rates go up by the way.

On the issue of what is a tax break it is an interesting on. If you sell your home you don't pay capital gains tax - that is a tax break, a distortion arguably. If instead you sell a buy to let and make £20k profit the state takes 28% of that in capital gains tax. Claiming your expenses against your income is what every shop in the country does and rightly so. So if we are deciding instead to treat landlords differently and tax them on profits they have not made that will just make them either up the rents or invest in something else.