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Graham Awards


Repeal Section 24 is key political priority says industry leader

A leading lettings industry figure says politicians should have the repeal of Section 24 as a major priority.

Section 24 removes a landlord's right to deduct the majority of their costs, including mortgage interest and arrangement fees, from their rental income before calculating their tax liability. 

Allison Thompson, national lettings managing director of Leaders Romans Group, says this is key for politicians now starting their party conference season.


She says Section 24 is directly responsible for higher rents which contribute to hardship and homelessness.

“Over 29,000 landlords signed a recent petition calling on the government to reverse Section 24, but the government confirmed they would continue to set mortgage interest relief against rental income only at the basic rate of tax” she says. 

“Due to substantially increased costs - not only of property finance, but of energy and building materials - this change is much needed.”

Thompson adds that politicians should also give greater priority to the creation of dedicated housing courts. 

“Landlords are facing widespread and serious delays in the courts when seeking to regain possession of their properties” she comments.

“This will be exacerbated in future if the Renters Reform Bill is enacted, removing Section 21 of the Housing Act and replacing it with Section 8. 

“A dedicated housing court would be the best way to address this serious backlog.”

One of her colleagues - Michael Cook, group managing director of the Leaders Romans Group - goes even further and wants the abolition of the Renters Reform Bill .

He says it’s “ill thought-through and would be detrimental to both landlords and tenants.”

He says: “The removal of Section 21 is unnecessary and damaging. Our research shows Section 21 is rarely used for ‘no fault evictions’ and, as Shelter has said, the abolition of Section 21 won’t end unfair or no-fault evictions where they do occur. 

“It is proposed that Section 8 of the Housing Act will replace Section 21 but this will create less, not more security for tenants. It will also mean many more cases going through the courts which is costly, stressful and prone to considerable delay. 

“We know there is widespread concern as to how the courts will facilitate effective possession hearings under these new grounds.”

He says another feature of the Bill - moving all assured shorthold tenancies onto a single system of periodic tenancies - would significantly reduce security for both landlord and tenants, spelling the end of long term contacts and replacing them with just two months’ notice. 

Cook says: “Abolishing clear fixed term tenancies seem to contradict the government’s objective to provide families the ability to put down roots in local communities with the security of knowing they have certainty of tenancy for in most cases one year, but often two or three.”

“Any detrimental changes to the sector could force landlords to leave the sector which would impact on supply, force rents up further and exacerbate homelessness.”

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  • icon

    Repealing Section 24 would help enormously. With much higher interest rates rent rises are going to have to be huge for at least 3 years for portfolio landlords to get back into a position where repairs can be comfortably afforded. Many will be taxed on a loss for at least a period of time as rent can only be increased annually. It must be remembered that although portfolio landlords are a relatively small percentage of landlords we house over 50% of tenants.

    The RRB needs to preferably be scrapped or at least be majorly fine tuned. Numerous problems are coming to light with the original proposals. Section 21 is more beneficial for tenants than the proposed changes to Section 8. Getting rid of Section 21 is only really beneficial to Local Authorities who will no longer have a duty to provide help for so many people.
    Fixed tenancies work well for seasonal workers and students. Without them it will be very hard for those tenant groups to find the right housing in the right locations at the right time. Some other tenants and landlords like the certainty of a series of fixed term tenancies while others like the flexibility of SPTs. As a landlord I predominantly use SPTs and find my tenants tend to stay for several years. When they decide it's time to go I don't take it personally. It's just an opportunity to give the unit a facelift and reset the rent to market level. On the whole if good tenants want to stay long term they can. Whether it's on a SPT or series of fixed term tenancies. Landlords don't just randomly decide to evict decent tenants. We probably don't rush to evict mildly annoying ones either.
    One of the dangers of the new tenancy proposals is that tenants will take what is intended as a normal let and treat it as a holiday let. With Councils trying to clamp down on holiday lets it seems counter intuitive to make it possible for standard BTL to be treated this way against the wishes of the landlord.

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    Of course, the repeal of Section 24 and the scrapping of the Renters Reform Legislation would increase supply of properties for tenants in the private rental sector.

    However, it seems to have been this Government's aim to REDUCE the size of the private rental sector with the Renters Reform bill being a continuation of the punitive tax regime. They wanted to reduce the number of people who rent and force them into owner occupation, and force private landlords into letting to those who could never get onto the housing ladder. Going back to assured tenancies was one way of achieving that aim.

    Assured tenancies (without Section 21) were introduced under the Housing Act 1980. It was eight years later that shorthold assured tenancies were introduced under the Housing Act 1988. The removal of security of tenure which was a feature of assured tenancies was a move to INCREASE the size of the private rental sector - and it did do that because a very large number of private landlords had not been prepared to let self-contained flats and houses as assured tenancies.

    Perhaps the important question is what is the Labour party's aim? Do they want a good sized private rental sector with high supply of private flats and reasonable rents, or do they want landlords to pull out and to follow the Tory aims which already have resulted in low supply and high rents.

    High supply of private flats automatically increases the standard of private flats, too, because landlords can't let them otherwise. You don't need all the government standards and controls.

  • John  Adams

    The fact is we are expected to behave like a business but are not treated as such when it comes to tax. If other businesses had the same tax arrangements the country would collapse over night, instead we are in slow motion car crash as investment in Housing up sticks and leaves ironically it seems Hunt is going to encourage that by expanding ISAs...

  • icon

    In the areas I work in that used to be full of affordable Private Rental Property, Now there is virtually nothing . Why . The Government anti Private Landlord Policies forcing Private Landlords out.
    It is bad enough having to cope with interest rates Rising from 2% TO 8% . But section 24. makes it almost impossible .


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