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.

politicians must love this. there are not enough houses becausr there are 70 million people with infrastructure for 50 million. right to buy and refusal to pay more tax means it wont change.

if anyone actually wanted to fix it, taxes would go up, there would be incentives to renovate places, companies forced to move jobs to cheaper areas, having more than two kids outlawed, strong population contr ol, public transport investments outside london and so on. none of those things wil happen becauae even the shriekiest landlord hater wont vote for higher tax.

Ohfortuna - the only benefits I can see to phasing it in rather than doing it instantly is that it gives landlords more time to structure their tax affairs to evade the extra tax ie signing properties over to spouse, children, parents etc. It is much more beneficial to those owner occupiers who want to buy their first home or trade up to a family home if it is implemented immediately as it will stop prices shooting up, possibly even create a small downward movement in prices.

the only benefits I can see to phasing it in rather than doing it instantly is that it gives landlords more time to structure their tax affairs to evade the extra tax ie signing properties over to spouse, children, parents etc

well I guess all those MP's with property portfolio's have to be appeased dont they

Exactly Ohfortuna.

It’s a pretty rubbish situation to be in - being priced out of buying a family home because you were born after the early 1980s. Buy to Let became a thing with the deregulation of finance in the mid 1990s and property prices shot up from about then onwards. People should not have to put off starting families because Landlords have pushed up the price of buying a family home so much.

Nevertheless the supply of btl property is going to fall dramatically and that will force rent levels up .This is basic economics and the law of supply and demand.

Your economics are rather too basic, as you’ve made an odd assumption that BTL stock that is sold will not remain as housing stock.

This is unlikely given demand in the market. The likely outcome of highly-leveraged BTL landlords who cannot operate without subsidy leaving the market is: (a) some properties will be bought by first time buyers, reducing demand and (b) some properties will be bought outright or near-outright by those with capital who want to invest in an appreciating asset that provides a reasonably steady income, without needing any borrowing costs to be serviced by their tenants.

As far as I can see the biggest beneficiaries of BTL rather than outright-owner landlords are the banks.

Another benefit of landlords selling up is that in the main the property has not been cared for in the same way as an owner occupier would. Minimal upkeep, old fixtures and fittings etc. This makes them less desirable. Whilst searching for our first home in SW London recently we noticed a lot of ex BTL properties sat on the market for longer and had bigger reductions. Estate agents were a lot more willing to tell us to put in a "cheeky" offer on these sorts too.

Preposterously, BTL landlords want people to think that if a landlord sells a property, it will cease to exist. Wrong! If a landlord sells a property, it will continue to exist and to provide the same accommodation, but under different ownership. There will be no loss of housing.

Given the shortage of property I can substitute my poor housing benefit tenants with more affluent ones.

Housing benefit rates are well below market rates.

I understand fully that the property won't disappear.

More affluent ones tend to demand better living conditions in nicer areas. As well as doing up the properties to meet more affluent tenant expectations, you’ll have to pick up the property and move it to a nicer area. More affluent tenants are also the ones who will be able to buy a property, once landlords stop pushing up the prices.

You also mentioned above that you are planning on renting to Eastern Europeans instead of local housing benefit tenants - you’re screwed if Brexit stops freedom of movement then.

All my properties are in a limited company now. I'm big enough that it's worth my while to do it this way and avoid the tax issues should i return to the U.K. in the future.

The biggest issues with the housing market in the Uk is the ability of foreigners to buy housing stock and the high rent paid by HB. I have had other LLs tell me I'm stupid because I don't charge the maximum set by HB. I'm not greedy. I want to charge an amount that my tenants can afford and enables me to maintain the property to a high standard. Anything in addition to that is greedy and doesn't help anyone in the long run.

I also don't see the poor suffering from the changes. I see the people just above the thresholds for help having a very hard time.

I’m not a landlord but this is classic ‘politics of envy’ territory of the type stoked by left wing swp types.

The housing market is not the fault or responsibility of private landlords. Can’t buy in London? Stop whinging and buy somewhere else... the uk isn’t bordered by the river Thames...

Can’t buy in London? Stop whinging and buy somewhere else

The housing crisis doesn’t stop at the M25, you know.

While I wouldn’t put the blame for that housing crisis on BTL landlords, the massive boom in BTL hasn’t helped. You can’t really expect people to have massive amounts of sympathy for landlords who present their business as benevolently housing the poor, while trying to convince non-landlords that losing tax relief is brutal persecution.

If you are in a limited company you can afford not to charge the maximum rent.

If you are not in a limited company it is no longer possible to be so generous.

I do not think the OPer is cut out to be a landlord, with its fluctuating income levels and changing tax reliefs. If she was coping, she would not be resorting to blackmailing her tenants with financial penalty.
The simple solution for her is to sell her properties to someone who can cope with owning them.

As a LL I'm philosophical about the removal of tax relief, we've had plenty of warning, we do the figures and either put up or sell up. Only time will tell what effect it will have on the rental market.

I can also understand the frustration of those wanting to buy, I look back at our first house which we bought 20 years ago, DH & my salaries for junior professional jobs were £25k each, the property (a modest 3 bed ex council house but in a wealthy commuter town) was £116k. Today that property is on sale for £460k so to have the same salary/house price ratio you would need a salary of £110k each. No wonder people are pissed off.

I can see why it is easy to blame BTL landlords and can't deny there maybe some truth in it but I would make a few points.

1. The big LL's with the largest stocks (and hence the biggest problem in the argument against BTL) already hold their protfolio in a company setup and are therefore blissfully unaffected by this change. Cynically you would say the Tories have cleverly turned the 'frustrated' on the 'have a go small landlord' whilst not harming the pockets of their buddies (who are the biggest problem) at all. And indeed if the little 'have a go's' are forced out, good news for the big corporate landlords who cash in even more!

1. I had a good experience renting several properties in my time, that does not mean all LL's are great, if you had a bad experience the same also applies and as with life generally you tend to hear more about bad experiences than good. My current tenants are overseas lectures on a fixed term contract, a chap who could buy but thinks the market will fall in our area (so is renting in the meantime) and someone who has moved for work but does not want to buy until they are sure of their job. None of these people would or should qualify for social housing and they do not want to buy even if they could, opportunities outside of buying and social housing are needed.

for

1. Bil I have holiday lets too, whilst they are exempt as you say they are a whole different ball game, more rental yes but a lot more set up and on-going cost and work! And and you're in the SW which is a good start but generally the factors that make a property ideal for a low income family are not the same as those that make it an ideal holiday let.

Yes Dazed I made that point upthread about penalizing small landlords while leaving large players untouched. People get stupid as soon as they read the words Buy to Let and start waving the pitchforks. Blissfully unaware that anyone with more than a couple of properties will be using commercial finance and a company registered overseas. So the Tories get to claim they are taking robust action, swing a few votes and all without costing themselves any money. They don't even need to build more social housing!

The older I get the more disillusioned I become with the stupidity of millions of people.

wise words from the last two posters. that is exactly the plan and the landlord haters are being.cleverly misdirected.

doesnt excuse any bad landlord but the small ones are easily driven out.

My great strength is that my properties are mostly of a high standard and we'll located.
I have been upgrading my properties since 2014 and as many of them are located in a sea side town I can avoid s.24 without bothering to incorporate on these.

So I've replaced housing benefit tenants with the polish and tourists.

I shall be seeing my accountant next week to look at any other measures I could take.

It's a great shame that I can't house people on housing benefit but the numbers don't work .It's also a very frustrating market to operate in.

You are pissing me off OP with your arrogant attitude.

I am a tenant myself who wanted to enter a housing market 3 years ago with 20% deposit and lost 17 bids against Btl buyers. 17!!! I wasted nearly a year offering on different properties and was outbid well over asking prices. If not for btl, I would have a home on my own long time ago. Btl taxation and finance have always been too generous and this is why I never managed to outbid a landlord cause my mortgage was restricted by income multiples unlike btl.
I am buying now in a different cheaper city. My mortgage on a detached house will be £200 lower than my current rent on a terraced shite. What prompted my decision was my landlord increasing rent year on year to bring it to the market value. His idea of a market value is one that amazes me always. A privately managed house which I continued to rent for 7 years, with no arrears at any point, in his consideration deserves same rent as those advertised by agents who take at least 15% for basic management. His last increase met my opposition. I simply did not sign the contract. I do not pay higher rent either. He never issued me with an eviction notice. Why not? Fear of voids? But living with the prospect of that is not fun at all!

S24 is a brilliant idea but I regret it is phased out over 4 years and parasites like you have still plenty of time to exit. You are facing exactly that. I just love your idea of exiting your charity business and entering dead commercial property business.

This is why you OP will not be able to increase rent and will be forced to sell:

1. you are facing 5-fold tax bill, that will destroy your well planned business 😂, if your tax bill rises from £100 to £500, you are just a laughing stock. If your tax bill rises from £1000 to £5000 you are screwed. No way you are going to get £4000 extra for your shite council estate property.
2. number of FTB increasing steadily as number of BTL properties for sale increase, these are usually much sought after 2 or 3 bed homes in not the best areas. Something swallowed up by BTL market. I can already see a glut of ex btl houses for sale
3. benefit cap, i wont be explaining, you know that as long as tories form a government, the cap is not going to be reversed
4. brexit - more EU expats leaving than coming, more Brits leaving UK while they still can;
5. economy/ brexit - highly likely that we will face crash and huge inflation, possible high interest rises to rescue pound. The economy is predicted to shrink 8% on an average. This will roughly mean 20% unemployment rate. More people leaving than coming. More empty properties.
6. people will rather relocate elsewhere than pay you the money they don't have
7. increasing rent will force those who enjoy the freedom of renting out of their choice to consider buying

You are screwed op! Just don't embarrass yourself

The intention of the OP posting here is to try to blackmail the government into reducing her tax bill. Her message to government is: "I will hurt your Housing Benefit recipients, if you make landlord owners pay the same taxes as owner-occupiers".
If she no longer rents to HB tenants, as she now claims, why is she complaining she will need to charge tourists more for her holiday lets?
PS Perhaps that seaside resort where you own will be happy you are no longer bringing in lots of HB tenants to populate it.

It's not me that is screwed it's you renters.

YOU WILL BE PAYING THE TAX IN HIGHER RENTS SIMPLE!

I have 3 cottages in Cornwall that have been derelict for years.I'll get them up and running and life will be sweet.

Have a nice day.

My five fold tax bill is about to be reduced dramatically and do you know why??

It's because I'm renting to tourists and I get full relief on my mortgages

Not only that I double my income.

If I stay with housing benefit I get punished.So naturally it's good bye housing benefit.

I don't need any sympathy from you lot.
I'm not screwed you are.Have a nice day.

@bil66 your cottages in Cornwall will need to be finished to a MUCH higher standard if you intend to let them to tourists. Many LL in Cornwall are shying away from holiday lets unless they are already incredibly affluent as the running costs are sky high.

Also, if you register as a company you will be liable for business rates on these properties. If not you will still be required to set up a commercial waste contract.