The so-called housing charity, Shelter, targeted Ludlow Thompson a few months back, asking its supporters to block the letting agent’s telephone lines so that they could not go about their normal business.
Shelter accused the agent of ‘discrimination’ against those on benefits. At the time, many landlords felt Shelter's actions were deplorable and the new Landlord Alliance – which, since its inception, has attempted to combat Shelter’s many attacks on private landlords - wrote to Ludlow Thompson to offer support.
In addition, many landlords spoke up on various forums to defend the lettings agency against Shelter's ill-informed and wrong-headed attack.
Given this support from landlords, it has therefore been galling this week to see a director of Ludlow Thompson, Stephen Ludlow, referring to private landlords receiving £7bn in ‘tax relief’ on mortgage interest implying that landlords are doing really well and receiving this ‘gift’ of relief from the government.
Unfortunately, this plays right into the hands of Shelter and other anti-landlord organisations and individuals.
In fact, landlords do not receive ‘tax relief’ on finance interest; this is a misnomer which has facilitated the Treasury's attack on landlords and is completely false. As the Institute of Chartered Accountants of England and Wales, the Institute of Fiscal Studies and common sense confirm, it is unjust, absurd and unsustainable to tax a business without allowing it to offset the costs of creating that profit.
Finance interest is often the main cost of the business. Removing this does not remove a relief, it contravenes generally accepted accounting practice and effectively imposes a tax on non-existent profit.
As landlords, we were able to recognise that Shelter’s accusation that Ludlow Thompson and other agents and landlords ‘discriminate’ against those on benefits was weak and ill-conceived. It would have been nice to have this understanding reciprocated, especially as landlords are letting agents’ main ‘paying’ client group (even more so with the tenant fees ban coming in).
Given this, agents would do well to be more circumspect in the future and not misrepresent the government’s heinous tax treatment of private landlords.
Dr Rosalind Beck is a property writer and landlord based in South Wales. You can read her latest report by clicking here.