Posts with tag: tax changes

Buy-to-let landlords call for change in Autumn Statement

Published On: November 21, 2016 at 10:05 am

Author:

Categories: Landlord News

Tags: ,,,,

A new investigation has revealed that the overwhelming majority of buy-to-let landlords in the UK want to see more support from the Chancellor in Wednesday’s Autumn Statement.

Research conducted by Martin & Co found that 92% of investors feel the Government is now anti-landlord and is calling for changes.

Tax alterations

Certainly, the recent alterations have made life much more difficult for investors. In some cases, the 3% stamp duty surcharge, changes to mortgage interest tax relief and scrapping of wear and tear allowance have driven some landlords from the sector.

Last week’s announcement that the Bank of England is to get new powers to regulate lending to buy-to-let investors is another blow.

Further data from the research shows that 74% of investors want to see Stamp Duty scrapped in the Autumn Statement, while more than 50% want proposed changes to mortgage interest tax relief abolished.

Difficulties

Ian Wilson, chief executive of Martin & Co, observed: ‘The Government seems to be set on making life as difficult as possible for property investors, while ignoring the fact that landlords provide essential rental properties in locations where there are housing shortages and no realistic ability to buy.’[1]

‘People are relying on the private rented sector to supply property, so we need the Chancellor to back our landlords and encourage them to continue to invest and provide a vital pipeline of homes for people who simply cannot afford to buy,’ he continued.[1]

Buy-to-let landlords call for change in Autumn Statement

Buy-to-let landlords call for change in Autumn Statement

Pivotal

Eddie Goldsmith, chairman of The Conveyancing Association, believes that the Autumn Statement is a pivotal moment for the housing market in the UK. He feels that former Chancellor George Osborne’s policies has created a, ‘perfect storm.’ If this continues, Goldsmith feels that this could, ‘reduce transaction levels to rubble for many months to come.’[1]

‘It may be too much to hope that the 3% extra charge on additional property stamp duty will be abolished, but such a move-as well as a u-turn on next year’s mortgage interest tax relief changes-would be most welcome,’ he added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/11/investors-are-fed-up-with-governments-anti-landlord-policies-want-chang

Letting agent refutes one in four tax quit claim

Published On: November 18, 2016 at 2:57 pm

Author:

Categories: Landlord News

Tags: ,,,

This week saw a concerning report stating that up to 25% of buy-to-let investors could be driven from the sector, as a result of existing and proposed tax changes.

However, a leading letting agent has moved to quash this prediction from the Residential Landlords Association.

Misleading

Ajay Jagota, head of North East lettings and sales firm KIS, feels the data is misleading and incomplete. He argues that it does not take into account regional variations.

Mr Jagota said: ‘I’m not disputing that these tax changes will affect landlords and that the ultimate losers will in all likelihood be the tenants whose rents go up to cover those costs – but this poll is less accurate than the polls which missed Brexit and the election of Trump.’[1]

‘We work with a similar amount of landlords to the total number who took part in the survey, and not one of them has even hinted to me at any point this entire year that they are thinking of selling up. Other major agents I’ve spoken to have said the same thing. So where are these one in four landlords who are packing in?’[1]

Letting agent refutes one in four quit claim

Letting agent refutes one in four quit claim

‘Self-selecting’

Continuing, Jagota said that the survey reflects, ‘1,000 probably self-selecting landlords,’ who in reality do not show the thoughts of the majority of investors.

‘There’s a wider issue here that some eye-catching headline figures are once again failing to accurately reflect reality on the ground. It happened in the 2015 election, it happened in the EU referendum, it happened in the US presidential election – but it also happens in housing,’ Jagota noted.[1]

Concluding, he said: ‘As a local agent you know the micro details about community you serve which will be missed by – even the Office of National Statistics would miss. You can even see when an individual street is on the up. But you are then told that statistics show how things are entirely different from what you’ve seen with your own eyes.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/11/letting-agent-rips-into-landlord-survey-of-buy-to-let-quitters

 

Around 25% of investors will quit sector following tax changes

Published On: November 15, 2016 at 9:41 am

Author:

Categories: Landlord News

Tags: ,,,

A new survey of 1,000 buy-to-let landlords has revealed that around one quarter are thinking of quitting the sector as a result of recent and forthcoming tax changes.

The research conducted by the Residential Landlords Association highlights stamp duty surcharges and restrictions on mortgage interest tax relief as the main features.

Rising rents

This follows a previous study that showed that 56% of landlords plan to raise their rents, in order to cope with the tax alterations.

David Smith, policy director at the Residential Landlords Association, 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.’[1]

‘Ahead of the Autumn Statement (next week), we are calling on the new Chancellor to consider the evidence, reverse policy and support growth in the rented sector,’ Mr Smith added.[1]

Around 25% of investors will quit sector following tax changes

Around 25% of investors will quit sector following tax changes

Tax burden

The call from Mr Smih and the Residential Landlords Association comes on the heels of another call from Laura Lamb, director of The Mortgage Company.

Lamb feels that the stamp duty surcharge should be aimed at portfolio landlords, as opposed to amateur ones.

‘Responsible lending is very important and I fully support that but stress-testing mortgages rates at 5.5% interest rates with a rent cover of 145% is just ridiculous and will massively limit lending,’ Lamb observed.[2]

‘I would focus more attention on offering more assistance to those trying to buy. The Government has introduced the Help to Buy ISA but it’s only available if you are purchasing a property under £250,000. Most first-time buyers in London and the south are looking at purchase prices in excess of this so they instantly lose out,’ she concluded.[2]

 

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/11/a-quarter-of-buy-to-let-investors-will-quit-warns-grade-body

[2] https://www.lettingagenttoday.co.uk/breaking-news/2016/11/hands-off-buy-to-let-mortgage-chief-tells-the-government

 

NLA calls for landlords to protest over tax changes

Published On: November 10, 2016 at 3:33 pm

Author:

Categories: Landlord News

Tags: ,,,

The National Landlords Association has carried on urging the Government to abolish tax changes imposed by the previous Chancellor George Osborne.

In particular, the Association is trying to get support fighting against the scrapping of mortgage interest relief. It has launched an e-postcard campaign trying to get landlords to follow suit.

Campaign

The NLA have asked landlords to send one of the two e-postcards straight to the Chancellor and the Treasury through its website www.rethinktenanttax.org. This campaign has been purposely designed to run in the lead up to Phillip Hammond’s inaugural Autumn Statement, due on the 23rd November.

Richard Lambert, CEO at the National Landlords Association, said: ‘Despite more than a year’s worth of campaigning, the Treasury still won’t accept the disastrous impact that Section 24 will have on landlords and their tenants. It seems that all our words and figures haven’t got through to them, so we’ve decided to make it clear as possible-by drawing them a picture.’[1]

‘With the Autumn Statement just around the corner, this provides the perfect opportunity for landlords to make their voices heard and to relay the message that the proposed tax changes will only make housing problems in the UK worse.’[1]

NLA calls for landlords to protest over tax changes

NLA calls for landlords to protest over tax changes

Tax brackets

Recent research from the NLA revealed that 440,000 basic-rate tax payers will move up a tax bracket from next year, when the changes come into force. Landlords in London, the East of England and the West Midlands are feared to be impacted most.

31% of landlords in London will move up a bracket, as will 30% in the East and 28% in the West Midlands.

Lambert concluded by saying: ‘This policy will push 44% of basic rate tax-paying landlords into a higher bracket, forcing them to either sell up and end perfectly happy tenancies, or increase rents. We want the Government to minimise the impact by applying the rules only to landlords who take out new buy-to-let loans from April 2017.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/11/nla-urges-landlords-to-lobby-parliament-over-tax-changes

 

Tax Hikes on Landlords Won’t Help First Time Buyers, Says the Public

Published On: October 25, 2016 at 8:27 am

Author:

Categories: Landlord News

Tags: ,,,,

Tax hikes on landlords will not help first time buyers get onto the property ladder, according to members of the public.

Tax Hikes on Landlords Won't Help First Time Buyers, Says the Public

Tax Hikes on Landlords Won’t Help First Time Buyers, Says the Public

Less than 20% of the public believe that higher taxes for landlords will help aspiring homeowners buy their first property.

These figures come from a survey conducted by YouGov for the Council of Mortgage Lenders’ latest publication, Homeownership or Bust?

Of those that said that something should be done to make it easier for young people to buy their first homes, less than 20% said that the Government should introduce tax hikes on landlords.

The study completely undermines the argument made by the former chancellor, George Osborne, that tax hikes on landlords will make it easier for prospective first time buyers to purchase a home.

Landlords are currently facing several changes to their finances, including: Being taxed on their income rather than profit; a reduction in the amount of mortgage interest that can be offset against tax; and a 3% Stamp Duty surcharge on the purchase of additional properties.

The Government has compiled a guide for landlords on how the changes to mortgage interest tax relief will affect them: /government-guide-tax-relief-changes-residential-landlords/

Commenting on the findings by YouGov, the Policy Director of the Residential Landlords Association (RLA), David Smith, says: “These figures back up all that we have been saying.

“Recent tax hikes on landlords will serve only to drive up rents and reduce supply, making it more difficult for people to save for a home of their own.”

He urges: “With the wider public now in agreement, we call on the Chancellor to use his Autumn Statement to reverse these counter-productive measures.”

The new Chancellor, Philip Hammond, will deliver his first Autumn Statement on Wednesday 23rd November 2016.

Hammond has already received calls to scrap Osborne’s tax hikes on landlords from various industry bodies, such as the Society of Licensed Conveyancers.

Conservative Peer Attacks Tax Hikes for Landlords

Published On: October 17, 2016 at 9:18 am

Author:

Categories: Landlord News

Tags: ,,,,

A senior Conservative peer has accused the former Chancellor, George Osborne, of exacerbating the housing crisis through his tax hikes for landlords.

Conservative Peer Attacks Tax Hikes for Landlords

Conservative Peer Attacks Tax Hikes for Landlords

Lord Flight, who previously served as the Shadow Chief Secretary to the Treasury, has written an article on the Residential Landlords Association (RLA) website to warn all those in the sector that tax hikes for landlords will “drive up rents” and “drive out investment in the sector”, at a time when 1.8m new homes to rent are needed by 2025.

Lord Flight referred specifically to decisions to tax landlords on their income rather than profit and the higher rate of Stamp Duty on additional homes.

In his article, Lord Flight highlights evidence from the London School of Economics that challenges the previous Government’s claims that landlords are buying homes that first time buyers could have purchased. He also points out statements by the Institute for Fiscal Studies that landlords are taxed more heavily than homeowners.

The peer calls on landlords to lobby their local MPs, informing them of the damaging impact that the tax changes will have on the supply of affordable homes to rent, and encourage them to seek changes in the new Chancellor’s Autumn Statement on 23rd November.

Recently, the Society of Licensed Conveyancers called on the Chancellor, Philip Hammond, to scrap Osborne’s Stamp Duty reforms in next month’s Autumn Statement.

Commenting on Lord Flight’s article, the Chairman of the RLA, Alan Ward, says: “Lord Flight’s analysis is correct. When we need almost two million more homes to rent by 2025, recent tax changes will choke off investment, increase rents and make it more difficult for tenants to save for a home of their own.

“The new Chancellor has an important opportunity next month to correct the previous Government’s changes to the way the rented sector is taxed. We call on him to seize this opportunity with both hands.”

Worryingly, landlords have revealed that the changes to mortgage interest tax relief are most likely to discourage them from investing further in the property market.

Which tax hikes for landlords are you most concerned about?