Campaigners against tax changes to have case heard next month

A legal campaign to overturn the UK Government’s decision to alter mortgage interest tax relief that residential landlords can claim will be heard next month.

At the end of September, there will be a hearing to determine whether of not there will be a judicial review of the move to reduce tax relief from 2017to 2020.

Challenge

Both landlords and organisations have warned that the move could put off existing buy-to-let landlords coming into the sector. In addition, it could hit existing landlords, who could be left with little choice but to pass on this additional costs to their tenants, in the shape of higher rents.

Campaigners Steve Bolton and Chris Cooper said that they will meet with new housing minister Gavin Barwell on the 9^th September, when the issue will be discussed further.

In a statement, the two campaigners said, ‘we will obviously be raising our serious concerns about the impact, making him aware of our legal challenge and doing the best job we can to help him become a supporter of our cause within Government.’[1]

Costly

The Scottish Association of Landlords and the Residential Landlords Association have both warned that these tax changes will make it easier for rogue landlords to provide sub-standard houses to tenants, due to increased costs.

Recently, a recent YouGov survey for the Council of Mortgage lenders suggested that 34% of landlords plan to reduce their investment in the sector as a direct result of the changes.

John Blackwood, of the Scottish Association of Landlords, said, ‘we know from our regular branch meetings around Scotland that landlords are already seeing increased costs as a result of tax changes. As well as impacting on individual landlords, we are concerned this could make it harder to tackle the current housing crisis by making it more difficult to attract much needed investment.’[1]

‘With the uncertain investment environment that has been created by the Brexit vote, at least in the short term, the last thing anyone in the housing sector needs is tax rises which will only make things worse,’ he continued.[1]

‘Furthermore, we are concerned that if costs increase, this could open the door for rogue landlords who don’t follow the rules on either tax or safety and quality standards at a time when real progress is being made at driving these unscrupulous players out of the market.’[1]

Campaigners against tax changes to have case heard next month

Restrictions

Lettings group Belvoir also said that the changes are likely to deter landlords from making further investment, which in turn will restrict the supply of available properties.

Managing director of Belvoir, Dorian Gonsalves, said, ‘Gavin Barwell, the new Housing Minister, takes swift action to unpick the disastrous tax policies that were introduced by the previous Chancellor George Osborne. We believe that the government should be taking steps to incentivise private landlords to invest in Buy to Let properties, as this is what will bring rents down.’[1]

‘If the government wants to make housing more affordable the only way to do this is to increase the supply of properties on the market. It is completely counter intuitive to restrict supply with tax changes and then not expect rents to rise. Gavin Barwell has an opportunity reverse the situation and create an environment where there is an oversupply of rental properties. This can only be achieved by incentivising landlords and making the rental market more affordable for tenants,’ he concluded.[1]

[1] http://www.propertywire.com/news/europe/uk-buy-let-tax-2016081912280.html