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A quarter of landlords are either selling or have sold property as a result of extra taxes being levied on the private rented sector.This was the result of a survey of over 800 landlords by the Residential Landlords Association and follows a previous one which found that 56% of landlords faced having to increase rents over the next 12 months to cope with the tax changes.These include taxing landlords on their income and not just their profit, restricting mortgage interest relief to the basic rate of income tax and a 3% stamp duty levy on the purchase of new homes to rent.Commenting, the RLA Policy Director, David Smith, said:“The RLA’s findings are a worrying sign of the potential trouble ahead for tenants as a result of the previous Chancellor’s tax rises. Any reduction in supply is going to make it more difficult for them to find a place to live and will inevitably drive rents up.“Ahead of the Autumn Statement we are calling on the new Chancellor to consider the evidence, reverse policy and support growth in the rented sector.Among the measures the RLA is suggesting that the Chancellor introduces are: scrapping the stamp duty levy where landlords invest in property adding to the net supply of housing; reducing Capital Gains Tax to the new lower rate of 20% where a landlord sells a property to a sitting tenant; and ending the anomaly that means VAT can be reclaimed for the construction of a new home for owner occupation but not for renting.The RLA points to figures produced by Professor Michael Ball of Reading University which show that supporting an increase supply of homes to rent is good for Government revenue. According to Professor Ball’s research each private sector home to rent nets the Treasury an average of £1,000 a year in tax, more than homes in either the social rented or owner occupied sectors.We are already seeing evidence of this on the social web. Some recent comments from the Tenant Tax Facebook page:A comment by portfolio landlord Angela Bryant:Another recent headline:Please share your thoughts if you are thinking of selling up as a result of Section 24.
SEE ALSO - A million landlords forced to increase rentsUP NEXT - Section 24 - landlords must take action nowDON'T MISS - 12 Section 24 questions landlords need to askNOW WATCH:
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
we have not seen the start of S24 yet
Learn Change and Adapt ?????
It is hard to agree with RICS on the cause of any potential looming rental property shortfall
S24 doesn't result in any houses being knocked down. Sure, some will change ownership, but none will be knocked down
It might delay some building given that BTL has been a voracious buyer of new builds in recent years. But that is exactly what S24 aims to do - to stop BTL outbidding / outbuying FTB and homeowners on new builds. A reset in the demand profile (based on access to funding and the price) is the obvious outcome of S24. There might be a similar affect on renovations.
But given that the government already stated that it will miss the new build target for the period to 2020, I would think it reasonable to say that the lack of building is way ahead of S24 in any sensible assessment of any cause of shortfall.
Building new housing units that are smaller, or are apartments, or are part of some 'community' type development, or are leasehold might satisfy some demand, but as it does so, it makes exisiting family homes - you know, the nice, well built 30's semi with a decent garden and a garage for example - more desirable longer term imo.
I was once told by a man much wiser than me 'never sell freehold property' The more I see of the shambles that passes for the UK's housing policy these days, the more I realise he is still right.
I often see this argument but the people buying those btl being sold will likely be other landlords or ftbs, so the long term tenants will have less choice while new households are created filling the gap. No the buildings aren't knocked down but the supply of people needing housing is ever expanding and ftbs are likely to be those who live at home saving a deposit so every landlord that sells up arguably creates one more set of tenants bidding for one less rental property. It's fairly obvious where this will lead.
The cynic in me wants to say that a lot of the demand at the low end of the price range (i.e. LHA stuff) is being removed from the market by being forced into B&B / Travelodges by the freezing of LHA rates.
I`m now just biding my time till the Autumn statement in 8 days time.
The message may have got through to the Chancellor and more or less normal service can be resumed. But keep up the pressure I agree . He will have the bulk of it in place by now . But last minute changes may be entirely possible to his well laid plans. Lets hope so ......
Sec 24 only going forward but not retro active. Thats possibly fair one could argue . Stamp duty cut to 1.5% for investors. Hurts but doesnt halt us investing. Latest H.B caps lifted . They are a disgrace. LHA rates unfrozen. Level the playing field and stop discrimination against those least able to protect themselves .
That`s all I want for Christmas .
If I`m given that, then I shall in return, not sell and thereby give all my tenants the home they are in ( figuratively speaking of course )
Jonathan Clarke. http://www.buytoletmk.com
I want the same as you for Xmas too
Retrospective Taxation never works
It would have been better to ban BTL in personal names going forward
We could all plan better in the long run
Agree with your point on S24 rules on new properties but I think thats far to sensible for this govt!
1 in 4 Landlords to exit due to Section 24... yet in the Rightmove survey only 38% of Landlords are well informed about the implications of Section 24.
As much as I am against S.24, there seems to be a bit of headline grabbing going on here.
Whilst not selling my properties. I can just afford the hit of S24. I am certainly not buying anymore.
If my tenants want to buy them (which they are not interested in) they can make me a reasonable market price offer. Otherwise I will continue to pay down my mortgages for these for my pension.
I will look at other income streams maybe buy to sell. With S24 and landlords becoming the devil of society i'm finished with Buy to Let.
Even if S24 was scrapped tomorrow i would have serious concerns about it returning in the future with a Zero mortgage interest relief. That would cause serious damage.
I really would love another housing crash over S24 I really do,
I think your last words sum up how I feel
If we dont have a crash i will be very suprised indeed