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Following the result of the Judicial Review procedural hearing result, the Tenant Tax coalition have re-grouped and are set to ramp up activity on the political lobbying front.Steve Bolton shares some exciting new developments and urges all landlords to remain focussed and committed to the cause.As Steve mentioned, the Tenant Tax Coalition are planning a "Tenant Tax Awareness Week" from the 3rd to 9th April 2017. Please put that date in your diary and stay tuned for further up-dates about how you can get involved.TAKE ACTION - Send this link to all your landlord friends and share on Facebook and other social media channels. Section 24 Letter and Report to your MPUP NEXT - Industry reactions to the Judicial Hearing result Part 1SEE ALSO - Section 24 - Letting agent perspective - ARLA NOW 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**
It's just so obvious that section 24 will not work with the homelessness it will cause for the poorest and most vulnerable.The Councils are going to be in big trouble and the cost of bed and breakfast will go through the roof..How the Government and Charities like Shelter cannot see it is beyond my understanding.Are they wilfully blind or is this evidence that MP's really are stupid??
I've written to my MP but it achieved nothing.it's a pity that i'm going to be forced to evict my poorest tenants....I hope the Government and Shelter are held to account when it all goes wrong.
Bill, there is one problem with the 'people will end up homeless' theory though....houses don't just disappear.
Same number of occupiers. Same number of houses. Nobody likes voids. It really is that simple. People will buy the houses sold by landlords and they will live in them, freeing up other houses in turn. Yes, there might be some short-term B&B stays/people sleeping on sofas as the rebalancing takes place but this is not a long-term problem. For the same reason, I doubt that raising the rents is a viable proposition either.
The housing stock is increasing all the time, and before too long, corporate landlords will start to establish themselves with quality build-to-rent developments springing up (and as a tenant, I have to say that I see more competition as a great thing, but that is probably a topic for another post!). With Theresa May talking about interest rates having been too low for too long, I think it's only a matter of time before we see interest rate rises from the "independent" Bank of England. As I understand, it the soon to be implemented Basel III rules will see your finance costs significantly increase. And it's also hard to see how Brexit will improve things for landlords. To me, it seems like the writing is on the wall for buy to let, especially leveraged buy to let. If house prices fall significantly, many landlords may well find themselves staring bankruptcy in the face. I am already seeing a lot of chain-free typical FTB/BTL properties coming on the market in my area.
In my opinion, the smart money started making plans to exit BTL last year when Clause 24 was announced. It is clear that the government see BTL as ripe for further taxation, regardless of what happens to clause 24. Rightly or wrongly, landlords are pretty unpopular with the general public right now, as far as I can see.
As a prospective first-time buyer I shall watch with interest the further developments. I think that unless we see significant backtracking on C24 in the autumn statement next month (and this is unlikely IMO), I think landlords have to start planning to work *with* Clause 24 as it is going to happen.
i agree with some of your interpretation of what will happen as S24 is implemented. I think the effect on LHA tenants will be more significant (number affected & severity / duration of impact & cost to tax payer) than you, and I don't think large corporate LLs will be as good for tenants as you seem to, but we will see.
As a prospective FTB, what area are you based in? How much are the sort of houses that you would like to buy now & how far would prices need to fall for you to become a willing buyer?
Talk about wishful thinking, think this will be a case of reap what you sow. This policy will never last. So houses don't dissappear and more are always being built, clearly yes but households are forming faster than houses are ever built so your one sided theory fails instantly. I don't have voids and have already put rates up (still below market value), which I have not done during any tenancies in the past.
If someone can't pay that rent they'll have trouble looking elsewhere because market rent is always higher than what most landlords are charging, that is set to change. Some of my tenants sold there houses on retirement to come rent a flat that is much easier to lock up and leave while they go and spend their equity from a lifetime of work and paying a mortgage. Good for them but they will never be able to buy another house now, they need the prs and chose to enter it. Many others can't buy or have no intention of buying, I thought seriously about renting myself and have done in the past.
Quite simply your view of how this will all pan out is very blinkered and bitter economics will make you and the government think differently quite soon. Homelessness is already rising, there are far more people looking to rent than houses available, is that hard to understand. We have a problem and before landlords were buying, builders were building, now they are slowing down so the problem gets worse. There should be no stamp duty for landlords buying new builds to rent but backwards thinking and lack of economic knowledge over ideology vote buying is compounding the problem.
There's plenty of house to buy so why are people like you not buying now when landlords have pulled back? It won't last as foreign investment is coming back as the pound has dropped. That inflation on the horizon won't do you any favours in getting a mortgage. Get off the fence and act like most who own had to at some point, I know plenty of ftbs who are now buying, they wish they'd done it earlier though.
Just some food for thought.
Just one point as most of it was addressing that particular poster, but the statement that market rent is always higher than what most landlords are charging doesn't seem make sense. Surely market rent IS what most landlords are charging and that's why it's the market rent?
If I were to evict all my tenants and put the properties back on the market I would be getting around £500 a month more. Market rent is what new rentals are going on at but average tenancies are now several years and most people value a good tenant and don't raise rents much if at all during a tenancy. This is why average rents will rise considerably and why rent controls would actually mean most tenants paying more rent and that cost going up yearly. Maybe this is what Osborne wanted, everyone paying more, time this nonsense was scrapped and the people it's going to hit wake up and realise what's really going on.
Thanks, there's a lot of sense there. Although I don't think it's a simple case of looking at what some properties can currently achieve and assuming that if many more properties were put on the market then they would all achieve that same rate. What people can afford/are willing to pay is not always the same as what a landlord hopes to achieve.
Rented properties tend to house more people than owner occupied ones, so a decrease in the rented sector is likely to lead to more homelessness.
Many LLs keep rents under the market rates for good tenants to try to retain them, so there is some room for rents to be increased.
There are places where build to rent developments are going on, but HB forms a floor which stops prices dropping. The nearest one to one of my properties is likely to raise the value of that property. As a house it is not in direct competition with the flats being built. If you truely wanted to open the housing market to competition you would need to abolish HB and most planning controls. I do not support that and not just because they help me make higher profits (despite not letting to tenants on HB or building new properties myself).
Interest rates have been too low for too long. Most of the Basel III rules that the EU decided to adopt have already been implemented. Recent changes are likly to force reductions in LTVs. In the short term Brexit seems to be reducing the value of the pound, which will probably cause inflation to rise, which will reduce the real value of debts such as mortgages. In the long term it will likely make the country richer to everyone's benefit.
Most LLs will not be affected by section 24 as most LLs do not have mortgages. It was clearly targetted at the larger, highly leveraged LLs that the BoE considered a potential threat to the financial system. Some of them will be hit very badly, but they are a minority.
Just reading the bloggs and its good to see a FTB makeing comments
My own view is LHA Tenants are going to find huge issues Rates are on hold aand rents are going to rise and in genaral this group would never ever get a Mortgage to buy a home
There is just not enough social houseing
Genaration rent will get help and I am sure it will be via Rent Control and better Long Term Tenancey Agreements
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.
First of all many of my properties are rented to housing benefit and the LHA rate is well below market rates in my local area..However I have not evicted the LHA tenants as I know they will struggle to find decent properties elsewhere and believe it or not I see alot of them as my friends and I dont want to ruin their lives.I have properties in more affluent areas and I make most of my money on these.In a sense the affluent area properties subsidise some of my LHA properties.None of my lha properties make a loss-they do atleast cover the mortgage..For example I get 425 for one flat which is really worth 650 but I leave the tenant alone because he is seriously ill and moving him could kill him.I have single mothers who have come from abused backgrounds and I have supplied them with good quality property at very low prices.Most of my tenants have been with me for a very long time so evicting them is something I dread.Do not think that all landlords try to get every penny.They do not.
When section 24 comes in I think that landlords with marginally profitable properties will sell up.This means that properties in the south east with low yields are more likely to be sold than the ones up north.The stock of rented accommodation available will fall.
Also i will be forced to swap tenants from the poorest to the more affluent who can afford the higher rents.
There will also be a massive shift away from BTL (long term tenancies) to short term tenancies (Airbnb, holiday lets).This will further reduce the housing stock available to long term renters.
As I said in my opening post there is serious trouble on the horizon for the poorest tenants and I would have thought it was obvious and Shelter in particular would come to their senses.