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.

[bil66]

I have been making preparations for these tax changes since 2015 and evicting housing benefit tenants since that date

[Believeitornot]

Of course it's very convenient to blame landlords for the lack of house building and the dramatic rise in population

There are plenty of over priced empty properties bought up by landlords sitting empty.

Hundreds thousands of families aremade homeless because they cannot afford extortionate rents.

So I would say that over greedy landlords are part of the issue.

Well actually it’s structural. Housing is seen as an asset to make money from when in many cases it just isn’t. That’s why we need more homes in the social rented sector to balance it out.

Plenty of housing associations manage to make profits building affordable homes while charging rents. It is more than possible, even in London.

However the government wants the private sector to build and rent out property. That’s where you get the problem.

[Personwithhorse]

Allowing immigration of 300,000 people a year caused the housing crisis - where do you suppose they are living.

Also this caused Brexit as successive governments refused to listen to people’s concerns.

This will mean fewer BTLs but many people who cannot afford to buy will still not afford to

People with bad credit will be very unlikely to find places to rent

It is shortsighted to stop landlords from claims expenses for repairs and maintenance is these may well be cut back.

[bil66]

Leaving properties empty is financially a very expensive thing to do due to the council tax and finance costs

At the end of the day landlords form a very small proportion of the overall housing stock and they have filled the gap where governments have failed to build.

Now they are under attack and that will not result in falling house prices but a significant rise in rent levels.

[RingtheBells]

I thought everyone knew about these changes and I don’t use the rental market either by renting or owning BTL, how is it not known by people, it’s been on the news and in newspapers

[Personwithhorse]

Another issue is AirB&B in places like London with high demand these are being let out at a much higher rate than monthly rent. It also creates problems for neighbours with noise/bad behaviour.

I think this should be taxed out of existence, and I have read that action is being taken in several places to ban it

[Believeitornot]

Allowing immigration of 300,000 people a year caused the housing crisis - where do you suppose they are living

Please do prove this.

[Believeitornot]

I’ll add. The issue with the housing market is not that there is a shortage of houses.

I think in 2014, there were 28 million properties and just under 28 million households. Something like that.

The reason that people are calling for more houses to be built is to reduce prices, by increasing supply. not to increase supply for people who have nowhere to live. That’s different.

There isn’t enough affordable housing. So the value and rent levels needs to drop down. The government can push for more building but actually they need to reduce price levels in other ways.

They lack the will because many landlords will be pissed off at the lack of income.

[GETTINGLIKEMYMOTHER]

Personwithhorse, landlords can still claim expenses for repairs and maintenance - if they've actually spent the money.

There was previously an automatic 10% 'wear and tear' allowance, which has now been scrapped.

[JassyRadlett]

At the end of the day landlords form a very small proportion of the overall housing stock and they have filled the gap where governments have failed to build.

It’s 21% of the housing stock and rising by about 1% a year. Not a ‘very small proportion’.

Of course, not all of those are highly-indebted BTL landlords whose business models aren’t sustainable without subsidy.

[GETTINGLIKEMYMOTHER]

One thing nobody has mentioned is that it's estimated that a fair number of landlords don't bother to declare their rental income anyway. Anecdotally I have heard of many cases, and not long ago I heard from a 3rd party of doctor A telling doctor B that she was mad to be declaring her rental income - 'We never have!'
This was told by the (shocked) doctor who does declare it, to my 3rd party.

Anyone with a mortgage who still thinks they can get away with it, may well find themselves in trouble, given the massive new data-collating computer system available to the taxman.

Anything, inc. S24, which makes it harder for LLs to evade tax, has to welcome as far as I'm concerned. Especially given that some £30 billion of taxpayer money is spent annually on housing benefit, a good part of that going into the pockets of private landlords.

[bil66]

So if there were no landlords is that a good thing? What would happen?

[NeonMist]

personwithhorse my observations are that the air bnb phenomenon is a product of the housing crisis, driven by sheer survival need for some, and greed for others.
So in London, one person I know air bnb's her rental property to cope with the ridiculously high rent, another to manage her high mortgage once her financial circumstances changed. A third person is doing it to supplement her lifestyle (greed?): she earns loads, is mortgage-free, and has 2 btl properties that she rents out at the highest possible rent

[GETTINGLIKEMYMOTHER]

Bil, of course there will still be landlords, but IMO many of the highly leveraged ones who can't manage without subsidies from the taxpayer, will sell to LLs who can - or to owner occupiers.
Why should anyone get a taxpayer subsidy to help them pay for what in the end will be a valuable asset?

It's all very well to say that rents will have to rise, but from what I've seen in the outer London area I watch closely, is that many LLs asking 'optimistic' rents frequently end up with lengthy voids, which will eventually cost them considerably more than asking a reasonable rent - and getting the place let - in the first place

[AllyMcBeagle]

Why should anyone get a taxpayer subsidy to help them pay for what in the end will be a valuable asset?

Exactly. And if the OP is so concerned about how s24 will affect poor people, the Government can use the money they've saved by ending this tax break and target it directly at those people rather than giving it to greedy landlords.

[bil66]

Rents seem to be struggling in London but that is not the case in the south west.

The bottom end of the market is in very high demand.

At the moment the tenants that can't find accommodation end up in travel lodge at 3 times the cost paid for by the tax payer.

[JassyRadlett]

So sell up? Your property will be bought either by a first time buyer who has been squeezed out of the market by the better-financed, or by a landlord with capital (who make up the majority of landlords) who isn’t reliant on taxpayer subsidies to fund their asset acquisition.

[bil66]

Or restructure my business so I get all the tax breaks and just carry on.

[mostdays]

If landlords raise rents to the point that they are unaffordable, landlords won't have any tenants. At that point they'll have to either ask for a rent that people can pay, or give up on being a landlord.

[PutTheChocEggDown]

There is a sort of dog whistle stupidity on MN about LLs / renting property. I understand that a lot of people have been stung by bad LLs and I think that the law should be tightened around inspection of properties / longer notice times / fines for LLs with unsafe properties.

But the fact remains that most of the bigger landlords with multiple properties are using commercial finance and will not be affected AT ALL by this. There is a need for short term accommodation for many people including students, overseas workers, contract workers, holiday makers.

This is simply a Tory gov targeting lower middle class landlords ('Who do those oiks think they are, bettering themselves, getting above themselves!') while the poor / envious jeer in approval. Meanwhile the big players quietly move in with their commercial finance and snap up whole streets of repossessed houses. Including many of the Tories pushing this through. What could they possibly gain?

[FadingSomewhereInHollywood]

If your tax bill is going to increase 5x because of this you must be paying an astonishing amount of interest that's not a sustainable business model if the only reason you were making a profit was because of government subsidies that owner-occupiers were never entitled to.

I hope if you restructure your business and trade through a Ltd company you remember that you have to pay capital gains tax and stamp duty on the transfer of the properties...

[WomanWithAltitude]

Now they are under attack

You mean, "now they are no longer being subsidised by the government", surely? No other group has been pandered to in the way that BTL landlords have been.

[JassyRadlett]

Or restructure my business so I get all the tax breaks and just carry on.

Go for it, but do plan ahead for if/when that loophole is also closed.

Is your restructure (and continuing acceptance of subsidy) incompatible with lower rents? I’d be curious to understand that.

[bil66]

I won't have to pay any cgt as I'll be entitled to incorporation relief and stamp duty can be avoided by running my business as a partnership before hand .

There are lots of other options but I don't wish to give a tax planning lecture.

Do you all take the view that investors that own hotels and make a profit from trading and also make a gain when they sell the business should be entitled to do so or do you think it's just the btl landlord that should be penalised.

What do you think of Alan Sugar who probably has billions in commercial property.Is it ok for him to profit from this type of asset.

Very interested to hear your moral views?

[OddBoots]

There does need to be a return to effective rent controls and a much faster rate of home building if that means a fall in property prices then so be it.