Labour’s shadow housing spokesman has urged the Government to detail how it will stop landlords raising rents to offset changes to buy-to-let taxation.
Mortgage interest relief changes being introduced next April will change the way landlord profits are taxed, and many reports and surveys have found that rents will increase to cope with the rising costs.
But Lord Beecham wants to ensure this doesn’t happen.
He has tabled a written question to the Treasury in Parliament: “To ask Her Majesty’s Government whether they intend to introduce plans to prevent landlords of residential properties from recouping the cost of changes to the taxation of rents of such properties which will come into force next year; and if so, how.”
The Treasury is yet to respond but we are not sure landlords will welcome the Government monitoring the rents they charge and how that would even work in practical terms.
Well Lord Beecham why not resolve the problem yourself and build a couple of million additional houses and charge £5.00 a week rent? That should help with the pressures of supply and demand.
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Thin end of the wedge of rent controls. Don’t these people (our so-called leaders) understand how compounding one stupid move (banning tenant fees) on top of another will only lead to more landlords pulling out of the PRS leaving fewer rental properties for a rising applicant market to choose from?
I was going to write ‘Unbelievable’ but unfortunately it’s only too believable given what we’ve seen already this year – and all this from a Tory government !!
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Did he know Castro?
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Our political leaders both Conservative and Labour are systematically killing off ( using unfair punitive taxes and legislation ) the “Ma and Pa” private residential lettings business to make way for a more professionally run operation run by large institutions and investors.
A recent study showed that only 4% of institutional property holdings in the UK are residential, compared to 22% in the US and 44% in Holland. But thanks to the momentum behind PRS property, UK residential looks set to make up some ground, with Knight Frank predicting that institutional investment in PRS alone will triple to £50bn by 2020
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I would like to table a written question to ask how do such stupid and brain people get to run the country or to be in ‘opposition’?
ah yes becasue most of them are life long career medlers with no practical or knowledge based thought in their heads.
Last time a rent cap was introduced was in the Rent Act 1977 with the rent office setting the rent. It was a disaster. You had protected tenancies. Properties were sold/tenants kicked out where they could be as it was not cost effective but when the tenant could not be kicked out you then had the Vons buy up these unsellable properties for knocked down prices and then encourage the tenants to leave with hand grenades.
The act was repealled in 1988 with the Housing Act taking over which was good for all concerned and redressed the balance to be more equal between landlord and tenant.
What we are seeing now and in recent years in a swing back towards being unfair and potentially uneconomic to landlords. A rent cap would be a step into the dark ages. It would kill the private letting market. Who would be a landlord if you could not put up the rent to market rates, could not remove a tenant as they are on a protected 5 year tenancy which they could break at will, who cannot recover expences as other business can do so but a landlord cannot.
Its madness. Seriously retarded thinking.
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As both an owner of an Independent Letting Agency and a Landlord I am deeply concerned at the on-going Landlord “bashing”, changes in Tax benefits, hikes in Stamp Duty, banning Lettings Fees and the list goes on. I am not sure what the Government plans to do with all the tenants currently living in PRS properties when a large proportion of BTL Landlords sell up. With stock going down and applicants for properties going up the law of supply and demand surely means rents will increase. I wonder if Lord Beecham owns any properties himself? As an investment BTL is no longer looking attractive. Gone are the days of yields over 7%. If rent caps are introduced to stop us from recouping the losses due to tax changes and bans on letting fees I for one will be re-possessing my properties, selling them and investing back into the stock market or simply cash funds. With almost 20% of our population in rented accommodation the Government are about to have a huge homeless issue on their hands (worse than we already have). If they are encouraging institutional investors into the market do they think for one minute that they are going to sit back and watch their investments lose money? They will have shareholders to report to and those shareholders will want the maximum return on their investments which means the maximum rents will be applied and rent increases will be market driven – as some of the comments mention above the people in Government and in opposition simply don’t live in the real World.
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There is a limit however to how far rents can be increased before tenants simply fall into arrears. Thus rents are self regulating, if Landlord costs are going up, so will rents, but only to a point. It doesn’t need further Government intervention.
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There are alternatives to the UK!
For one, invest in Florida.
Property prices are historically low following the crash and are now rising. No mortgage interest tax, no personal income tax, sensible property taxes, no inheritance tax, no benefit in kind tax, low fuel taxes $2.00 per gallon, no small business tax, 6% sales tax, no VAT.
Florida welcomed a record 105 million tourists in 2015.
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From 2017 onwards, there will actually be a completely different landlord dynamic in the PRS.
Landlord type 1 – Unencumbered
Landlord type 2 – Incorporated
Landlord type 3 – Highly leveraged sole trader landlord who will be forced into higher rate tax bracket as a result of Section 24.
The first two categories of landlord will not be affected by S24, and therefore will not be “forced” to raise rents.
It is only the Category 3 landlord who will be in this vulnerable position and the other two types of landlord can easily under-cut them.
The category 3 landlord will also be most affected by the PRA which kicks in next year.
I discussed this at length with Stephen Johnson, M.D. of Shawbrook Bank:
http://www.propertytribes.com/changing-landlord-dynamics-rent-rises-t-127627410.html
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Absolutely nothing to do with the shadow housing minister how much I charge to rent my property out for, or any other member of the establishment, this is a democracy not a communist country, can’t leave landlords and letting agents alone can they.
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danandsan17
Correct, you can charge as much as someone is willing pay in rent, until the government change the law!
The UK is not a Democracy!
A system whereby small numbers of people, in our case MPs, govern many millions of others, is not democratic. The extent of our self-government is a mere cross in a box every four or five years.
Sometimes as many people do not vote at all as vote for the party which ends up in power. Usually more people don’t vote for the party that gets in than do. For example in 2010 while over 10 million voted for the Conversatives, over 15 million voted for other parties. Furthermore, 35% of those eligible to vote simply didn’t. From this we can surmise that in fact a minority of people in the UK actively wanted to be governed by the Conservatives.
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