rents will soon be rising and the poor will suffer

[bil66]

There is a new tax coming out called section 24 which the Government does not want you to know about.

The tax will put up the cost of renting properties dramatically and this in turn means that landlords will not be able to rent to people on low income.

Finding a property for people on low income is already very difficult but its about to get much worse.

Action needs to be taken to stop this tax and complaints should be made to your local council and MP.

Not a new tax but about tax relief.

No hard evidence of any knock on impact.
Rents can not rise dramatically anyway.
In short cry me a river.

The number of buy to let properties has significantly contributed to the current housing crisis. I think that it is right that the Government are removing this tax relief.

If the Government want to really help they could bring rent control back too.

I have no sympathy for you OP and your post is not fooling anyone.

Low income households have been buying (greedy) landlords houses for too many years. Landlords should not expect to make an actual monthly profit as well as have someone else pay for a house for them.

There’s no reason it should make rents go up. It’s just a reduction in tax relief for landlords with mortgages. Landlords should swallow the slight drop in profit or sell the property - hopefully this will mean a few more homes for families to buy.
I really don’t see why anyone should get tax relief for the pleasure of someone else paying off their mortgage

(And i’m a homeowner)

If the cost of providing a service goes up, the end user will pay in the long term.Therefore it is a tax on the tenant.

You will notice very soon rents rising and people on low income finding it impossible to find affordable accommodation.

Poor tenants will be replaced by the more affluent to pay the tax.

Many tenants do not want to buy their own home or simply do not qualify for a mortgage.There is therefore a demand for rented accommodation and someone has to supply it.

The housing in the UK is not state owned and any council housing that was available was sold off.

There is not enough housing to go around and the current tax measures will not help the poorest in our society.

I think anyone that rents is already suffering due to the crazy prices. It is not just the poor either but anyone that rents (except very well paid people or lottery winners). You could have a relatively well paid job but still not afford the rental prices especially if you are a family with children.

Absolute rubbish. Rents are already at their limit or are you implying that the majority if landlords are currently charging below market rent out of the kindness of their hearts? Wealthier tenants will be moving out of the rental sector into house now available after landlord sell off. Section 24 is not a tax it is the removal of an unjust tax relief and levels the playing field between investors and FTB. It will only cause problems for highly leveraged landlords who have contributed in part to the current housing crisis.

Many landlords do not put up rents if they have quality tenants that look after their properties. It costs money to rent out properties and find new tenants.

Many landlords will see their tax bills rise 5 fold.It is not a trivial amount.

The fact that the new tax bills are so very high will mean that rents will rise.I can assure you that there is plenty of scope to raise rents and yes many of my properties were rented well below the market rate.You may find that hard to believe but it is a fact.

For 20 years I accepted housing benefit but that has now ended.

I don't expect sympathy from anyone but renting property is not as profitable as you imagine. The cost of repairs insurance replacing boilers voids court fees etc soon wipes out profit.

The highly leveraged landlord can transfer his properties to a limited company and will be immune from s.24.

This tax change was tried in Ireland and rents went up 50 per cent.

I can understand people being angry especially if they can't get on the housing ladder.

George Osborne argued that s 24 was designed to level the playing field .However the demand for btl mortgages has dropped 80 per cent and I don't see first time buyers rushing out to buy properties. Perhaps they can't get the finance.?? All s.24 is is a short term tax grab it will not solve the housing crisis. It may be right to slow down the btl market but the demand for rented accommodation will remain.

The bottom line is that properties for the poorest will be disappearing.That will be the net affect of this tax.

We are selling our rental property because of this, which I assume was the government's plan (to increase stocks available to buyers)

It will cause issues for renters though as rent prices will rise due to either fewer rental properties being available or LL increasing rents to cover their costs.

We never made a profit on our house as we have a mortgage. We can't afford to lose half the rent a month on tax and continue to pay that mortgage.

Any action the Government takes to reduce the appeal of BTL has my full approval.

If you can't afford your second/third/fourth, or whatever it is, mortgage then please feel free to sell it. There is a pent up demand from buyers for when house prices fall to affordable levels.

OP. You can repeat yourself as much as you like but rents won't rise. They're dropping in London in fact. FTB mortgage numbers have also risen by the highest amount this year. So looks like LL's exiting the market & FTB entering which is far preferable. The fact that voids cost LL's so much is a reason why many peers I know who rent simply decline any requests for rent rises. Very few have then been issued an eviction notice. I wouldn't expect anyone to be happy about taking a hit on income but it's just tough luck. The general public tend to have a negative view of landlords and you're now firmly in the sights of the government (a Tory one at that!) They can't & won't reverse s24 it would be very damaging politically. Exit the sector if your business doesn't work without subsidy...

As others are saying, the market for rentals sets rents, not landlords' costs. You reference Ireland OP. Rents here fell dramatically during the crash, much to the chagrin of landlords who complained that the rent wasn't covering their costs especially after the tax changes. Rents have since risen dramatically due to the recovery, ie, demand. Tax treatment has little to do with it imo.

The point of my post is to inform the public as to what will happen in the near future.

Rents will rise and the eviction rate will accelerate .If you don't accept this fair enough but time will tell.In fact it will become more visible in 2019 when the first tax bills arrive.

I already know that I can restructure my business so I can carry on via limited company.

I think it's a load of nonsense.

It makes some difference to me as I have a mortgage on my BTL - but it's hardly some big secret- I've known about it forever and assume all other landlords have too! I've already done a first draft tax return (the first time the changes start to apply) and it's barely noticeable really.

The rent increases I apply (if any) will continue to market led - bugger all to do with my tax bill.

I don't see why BTL landlords should get tax relief on their mortgages anyway so am in full support in government removing this. Hopefully some will sell up, housing stocks will increase and house prices may fall. This will benefit people who cannot afford to buy. At the present time the mad thing is it is more expensive to rent than buy.

I don't think landlords selling up will push prices down because they form such a small proportion of the housing stock but I could be wrong.

I think the opposite will happen. Universal Credit once it has been properly introduced with a cap of £500 pm for a single person will lower rents as landlords will be forced to rent to lower payers or leave their property empty/sell it . A lot of rents have been inflated by State subsidies eg working tax credit

We only became landlords because we were military and sent overseas. When we moved back we decided to keep the property because the family there thought of it as their home. We haven't increased the rent in the 8 years they've lived there as they are good tenants and it's not money making for us. We need to do some calculations once the tax rules change. If we start making a monthly loss, we will have to raise the rent or sell. I do agree that something needs to be done regarding BTL empires, however in our case it is possible that a family could lose their home of 8 years. Whilst we aren't in it to make a profit, we also aren't a charity and if the tax on the rent combined with the interest only mortgage charges means we make a loss then we'll have no other choice.

Nice attempt to sell your "they are trying to stop me making as much BTL profit" campaign as some kind of low-income social justice thing.

@4yearsnosleep This is one of the points I was making. If being a landlord becomes financially unviable due to gradual withdrawal of relief then hopefully LL's will sell. This will of course cause some upheaval but better for economy/society in long term.

I think you should contact the council's and ask them just how bad the situation is for the poorest. It's already at breaking point so much so that when tenants fall into arrears the council's pick up the bill to prevent the eviction.They simply don't have anywhere for them to go.

There are many better options than universal credit especially from eastern Europeans who pay more ,treat properties with respect and always pay their rent on time.

Landlords do not need universal credit.Those days are gone.

I know it's true that rents are currently falling in London but that is not the case in the south west and I am referring to the bottom end of the market not the top end.

Unfortunately I doubt our tenants will be in a position to buy and there are no similar houses to rent in our area (it's residential, not a BTL area.) The lowest 3 bed in a worse area is £150 p/m more. We are likely the exception rather than the rule, but I do worry if we have to sell, she'll be stuck. I'll be happy to be rid of it and pay less on our own mortgage tbh

Stating that you’re not making a profit is rather disingenuous when the value of the property is increasing year on year, and the mortgage on it is being paid in the meantime. Whilst there may not be excess funds every month after all landlord related expenses are paid, if you were to sell now after 8 years of renting out the house, there would be a profit.

The premise of this thread is hilarious. The poorest will survive as they do now, with a struggle to bridge the gap between housing benefit set at LA rent levels and vastly inflated market rents set by private landlords.

We’re about to move house, rent on a similar sized home would be £500/m more than our mortgage offer which is crazy - we have a decent income but a family on an average wage would not be able to afford that. If more private rental stock is sold maybe those families will be able to buy.

The change only affects higher rate taxpayer landlords with mortgaged BTL properties. That is a very small part of the market but likely very concentrated in London and the SE where hopefully there will be downward pressure on house prices as a result.

A landlord would not normally make much more than 200 pcm on a flat and that is after interest but before other costs.

The example you use is not typical.