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.

Thank you @themusicisoutsid3

I generally try not to increase rents dramatically or unjustly, and won't be doing so with s24 as none of ours are mortgaged. In long term rentals (which we very much prefer) rent only increases with inflation, and I am happy to accept less than the full market value for a good, proven tenant, and also offer longer tenancies which landlords with BTL mortgages can not offer. A lot of landlords with BTL mortgages (which I experienced whilst running my lettings agency) increase rents by over 6% per year, due to not only inflation but also because of the interest on their fucking mortgages, and because of sheer greed.

Thanks for your reply, @blaaake.

This is a very fair tax change, and it will help stop BTL buyers having an unfair advantage over owner-occupier buyers. I do hope basic rate tax relief is also removed, like MIRAS was completely removed, as this would further level the playing field.
I applaud the government for tweaking the tax rules in this way.

Blake - presumably, as you added to the portfolio you inherited - you also bought to let? Now what was it you said that made you...???

musicisoutside I have 22 properties which I rent out as a business. Increases are handled very sensitively.

I compare current past year expenses to the averages past five years of expenses and the expenses used to calculate the rent at the start of the tenancy. If in line with expectation I increase rent by the annual CPI index rate. If expenses aren't in line I take a further look at why. If expenses are lower there is no increase in rent and if way out of whack I have decreased the rent. If expenses are higher then depending on the amount I split the increase between 2-3 years. My goal is to have existing tenants have transparency over why their rents are increasing above CPI and to make increases as reasonable as possible. The HMO rules increased expenses significantly and I've done what I can to keep that cost down. The admin on my side is considerable so yes there is an 'upcharge' of £15/hr of my time dealing with all the paperwork. It's a very reasonable hourly rate considering I'd be paying much more to hire someone to sort out the admin for me.

Ive got long term tenants and a long list of people who want to rent to me. I don't use agencies and don't need to. I am a bit unconventional in that I don't keep the deposit beyond 30 days and my tenancy agreement includes my service schedule as well as what is and isn't considered wear and tear. If a tenant has a ripped carpet that's on me and I don't want a delay in them calling me. Also, the HMO inspections are onerous. Every single tenant should be made aware if the unit they are renting is subject to these rules as the inspection process can be a nightmare if you don't have good vendors who can cover multiple parts of the process.

emilie If they wanted to make it fair they should allow owners to deduct interest from their gross income. This is what they do in America and it enables parity with rental markets.

Instead the legislation they will bring in is discriminatory against small British LLs. For foreign LLs it's no problem for them to buy a place and rent it out. They will be able to deduct the interest in their own country.

Also, as a company I can still deduct the interest. It's makes zero difference to me. I'm over for a week this month and looking at up to 40 properties to buy with the goal of renting them out or selling them once updated. All the places I'm looking at have been passed over. These are places which are £50-90k in the NW. Many of them are very close to Liverpool city center. Seriously excellent value for money and I'd live in any of these areas myself. Nearly all my tenants receive HB as they have low incomes. If they purchased they wouldn't qualify for HB and they would be much worse off.

@dazedandconfused18 I didn't get a mortgage on any of them darling so I've not criticised myself, don't worry yourself about that

The government could not afford MIRAS, which is why it was abolished. Reinstating it would bankrupt the country. There is only one feasible way to level the playing field, and that is to have tax equality between BTL and owner-occupier mortgages.
Also, somone I know looked at the photo of that billboard poster and they want the ASA to enforce its removal, since it is blatantly dishonest.

It's not possible to level the playing field unless you have the same tax rules. Now in formed as a company I'm in a much better position than I was before. I get the interest relief and any income paid as dividends is subject to lower taxes than before.

Truthfully what they should do is remove the stamp duty except for the mega mansions making it 1% for £1m+ and 3% for £5m+. The personal capital gain exemption should be changed so you pay capital gain taxes on gains over £500k per property. With the £500k limited to once the home has been resided in for at least 3 years. If shorter than 3 years you should have to pay capital gains tax on any gain made upon sale.

That's much more equal and would really help reduce the costs of moving.

If you think the government is going to allow you to have all those hundreds of thousands of ££££s, you are due for serious disappointment. There is no way they are just going to set the tax rules purely so you do not pay any tax on your properties.

Sorry, thought you meant CGT on any property, not your personal home.

The government could not afford MIRAS, which is why it was abolished. Reinstating it would bankrupt the country

Lol. We have a central bank, meaning it can manipulate the 'money' supply however it wants. The only ways we are going to go bankrupt as a country are if our public services are given away or sold at a discount to foreign powers for their profit, or if the market believes the £ is not worth what we think it is. Oh shit, we're fucked aren't we?

We have one BTL property. We are classic accidental landlords, as we began renting our house when we couldnt sell it. It's a relatively cheap property, and was mortgage free. We bought our current house and the deposit came from remortgaging house no.1.

Our tenants are a family - a SAHP and a professional. No idea about their personal circumstances but they are definitely not on the Breadline, and are mid/late forties (so presumably could have benefited from lower house prices two decades ago).

In the catchment area to our school (which is large - rural so. C3 miles) there are NO houses currently available for rent. There are also c 30 houses for sale, ranging from £120k upwards. We do not live in an expensive area.

We are considering selling our BTL (if we can in the current market! ) as it is not financially brneficial to keep it with the new tax changes. Not sure where our tenants will go. Inpresume they don't want to/ can't afford to buy, or they would have bought one of the many houses available.

When talking about the rental market, it would be helpful if govt (and MN!) would acknowledge that the housing market varies across the country and from city to rural. There is life outside London/the SE.......

Blake, but where, darling, in the words 'buy to let', does it say they need to be bought with a mortgage. Not what did you say you were again?

Timtims You say accidentally let your house because you could not sell it (presumably because you were asking too much for it). If you decide to sell it again, will you will reduce the price so that it will sell this time?

New investors to btl will purchase via limited company where full relief on interest charges is still available so s.24 is nothing more than a short term tax grab aimed at the small btl investor

When people say they 'couldnt' sell their house, what they so often mean is that although nobody was prepared to pay the price they were asking, they wouldn't reduce it.

I have 2 neighbours like this. Houses have both been on the market for well over 18 months. Neither is likely to end up as an 'accidental' LL though - 'Oops, one of my houses is rented out! How on earth did that happen?'

I'm still not sure why this is affecting the OP.
"I have been making preparations for these tax changes since 2015 and evicting housing benefit tenants since that date"
"So I've replaced housing benefit tenants with the polish and tourists."

Sounds like they've been doing their part to make it impossible for people on low income to find affordable accommodation since way before now.

bil, where are all these new purchasers you mention? As far as I can see, the market is on its knees and prices are falling.

Take a look at Burnham on Sea as 1 example.

12 months ago a 1 bed house sold for around 75k now the same property sold for over 95k.

If the government want to tax me out of existence if I house people on benefits I simply will not do it

With tourists I get to offset all my interest costs and have a much less stressful life managing them

Next I'm going to set up a company to manage my properties but not necessarily transfer my properties into it.That will reduce my income.

Third I will pay alot of my holiday income into a pension fund as it's fully tax deductible.

Fourthly I may incorporate or perhaps sell some of my lower end properties as I hate managing them.

Fifth I am going to leave the country and enjoy myself abroad where the cost of living is a fraction of UK prices.Somewhere in South east Asia

getting People can't sell by dropping the price if they don't have enough cash to pay off the mortgage. It can have tax implications too if the difference is considered income.

A business owner can't easily declare bankruptcy and for non business owners declaring bankruptcy wrecks your credit score making renting much harder. Renting out instead of selling until they can afford to sell is a much better option.

www.mirror.co.uk/news/politics/cost-temporary-housing-risen-1000-12498333

The above link shows that the cost of temporary accommodation has increased over 1000 per cent

I wonder why that is??

It's because scum bag landlords like me have seen the light.

The title of my post is already coming true and the tax bills haven't arrived yet.

Just think when they do the sh*t is really going to hit the fan.

Ok, lets say they decided to scrap the whole thing.
You'd stop renting to "the polish" and tourists and go back to renting to low-income people, would you? Of course you wouldn't.

I'm sure it's very sad that some (not all) of the government gravy train has dried up for you, but you'll get over it.

Rent and house prices are only what they are because that's what people paid for them. If no-one could afford more than £5 for a house, then houses would be £5. Its simple market economics. That's why the phrase is "the market rate". There was never a law that said "you are always guaranteed to not have to charge less rent than you do now."

If all BTL landlords are forced to sell because their tax breaks are gone, and they cant afford NOT to sell, then they'll sell at the prices people can afford to pay. If everyone sells, then the prices will be lower because there will be a lot of property on the market. People who are buying property to live in rather than resell don't care if the price keeps dropping because they aren't buying it as an investment, they're buying it to live in.

Frankly, your frothing with rage and naked greed on here about the tax breaks on your 40 properties dropping is only cementing my view that this change is well overdue.