A controversial proposal for a £300m tax grab on landlords appears to closely follow a policy suggestion put forward by activists in the Generation Rent group.
A few days ago Generation Rent chief executive Ben Twomey wrote in the I newspaper: “The Budget has never been more important for tenants. Mortgage interest relief needs to be withdrawn from holiday lets, encouraging landlords to prioritise homes over holidays and enable renters to stay in long-term tenancies.”
The proposals - as reported yesterday on Landlord Today - followed an apparent government leak to The Sunday Times.
The paper said: “The Chancellor [Jeremy Hunt] is to launch £300m tax raid on second home owners who make money from holiday lets in an attempt to make the [income tax cut] sums add up. He will abolish a series of tax perks for landlords who rent out their properties to short-term holidaymakers rather than long-term tenants.
“Although it represents another tax grab by the Conservatives, Hunt will argue it will help tackle the housing shortage in coastal areas and holiday hotspots such as Cornwall and the Lake District, where landlords are converting to holiday lets to benefits from generous tax perks, depriving local people of housing.”
Generation Rent also clearly believes it has influenced the government. Generation Rent deputy chief executive Dan Wilson Craw tweeted from his own social media account: “This would be a huge victory for Generation Rent and our thousands of supporters across the UK.”
The property industry representing landlords and letting agents has robustly criticised the ideas.
Nathan Emerson, chief executive of the main agents’ trade body, says: “Propertymark are extremely concerned to see reports within the news of a rumoured £300m attack on landlords within the budget, all at a time when many have already left the sector and many more are just about holding on.
“Just like traditional homeowners, inflation and interest rates have hit landlords with force and there needs to be recognition from the UK government that to provide high quality homes, whether they be short term lets or longer-term housing, the system must be workable.
“It is unacceptable there is constant aim being taking at landlords to the point the viability of the entire system is becoming seriously questionable for both existing landlords and future investors.”
There is also sharp criticism from the National Residential Landlords Association
“The Chancellor needs to address the chronic shortage of long-term rentals by attracting new landlords to the market. Squeezing holiday lets is not the answer. He should follow the advice of the Institute for Fiscal Studies and reverse punitive tax hikes which have stifled the supply of the homes renters desperately need” says chief executive Ben Beadle.
“Scrapping the stamp duty levy on the purchase of additional homes would see almost 900,000 new long-term homes to rent made available over the next 10 years. This would lead to a £10 billion boost to Treasury revenue as a result of increased income and corporation tax receipts.”
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They should rename them the communist party and as for labour ... god help us all
Socialists or Communists will never vote for them. Conservative became Blue Communist, no courage or back bone to stand up to Generation of Dummies. Conservatives think rent reform will get them votes, it is not going to happen. When government takes all the reward away, no one will want to work to succeed. We all fail.
“The problem with socialism is that you eventually run out of other people's money.”
― Margaret Thatcher
Khan is placing more of my taxes up the wall helping renters agains landlords who just want their property back. I can’t believe the numbers of 11k or so of S21s are so low. Out of 4 million households or so?
Some of my landlords friends don’t really know what’s going on regarding Rental Reform. I think the majority of people are sleepwalking into this.
You are right Nick, nobody really knows what is going on with RRB because they keep changing their bloody minds on everything.
The legal uncertainty that the Conservative "reforms" have created coupled with the threats from the Labour Party to make everything even worse for Landlords is causing a number to leave their properties empty. I think Nick is right though that some landlords are unaware of the seriousness of the situation and are carrying on oblivious to the consequences.
I have kept a property empty since June. Won't rent it and 'couldn't sell' without giving it away so I decorating. Hoping to put on the market in the next few weeks.
I am moving towards selling, too, Nick.
I'm dressing the flats up - with new, good bedlinen etc.
My house is empty. So not going to bother dressing it. Will speak to agents but I don't think they need dressing in my area!
The fact that your house is empty Nick can be good when it comes to selling as clutter puts buyers off - you've only got to look at the "House Doctor" episodes on Youtube to see that.
However, they do, of course, furnish the show apartments on the new builds.
From Khans own figures in the other article for which they’ve disabled comments for some reason - 11.5k evictions last year out of 2.7 million rental households - which is 0.4% of renters.
Hardly an epidemic, and the majority of those evictions will undoubtedly not be “no fault” at all. I would guess a significant majority are people wanting to get social housing who have been told they won’t be considered unless they get evicted. You don’t hear people like Khan addressing the fact that most evictions are actually down to councils encouraging renters to seek eviction.
They are trying to corner us like rats 🐀, then an evictions ban and rent increase ban will come in 😱😬. It’s obvious where this is going.
Totally agree. It's why I engaged a solicitor once I started reading that White Paper. I never finished that either!
On the bright side, the SNP and their little Green helpers have had to throw in the towel on their attempts to freeze evictions and rents. Any harm to English landlords and tenants is likely to be equally short lived once such harm becomes undeniable.
Whilst evictions are still extremely difficult, rents can now be increased by up to 12% for current tenants who won't agree to pay more to meet market rents and by whatever an existing or any new tenant is prepared to pay on new tenancy agreements.
I very much doubt whether any sensible Scottish tenants would regard the recent changes to the Scottish prs legislation as having helped them in any way.
Only rogue tenants have benefitted, no doubt their reward for being loyal SNP supporters!
Khan Judas we fund him and he betrays us. Everyone’s C/tax hammered to support his mad ideas, £571.00 of my c/tax Bill alone goes to him and increasing all the time.
Interesting that no comments accepted on this site for second article regarding Mayor Khan funding activists to fight evictions.
LLs who have moved from long lets to short lets are likely to just sell up. GenRent will get what they want - no LLs - and still have nowhere to live! Kicking LLs out of the PRS without something to replace them will just result in more hardship for tenants.
Hunts tax grab to add to khan’s and Councils Licensing Schemes how many more are living off our backs, No hope of anyone earning anything themselves.
Don’t forget the National Landlord Investment Show this Wednesday 6th March, Olympia West Kensington London. They will be all there on the day the lot of them come & have your say make your views know.
Will anyone bother turning up to it at all? Surely there's no new landlords, and existing aren't investing?
Socialists live on the backs of others.
This is pure madness, taxing AirBnB and short lets will only do two things:
1. Drive up the costs of a weekend away to ridiculous levels
2. People will then just climb on a plane for a weekend away somewhere warmer
Upshot is there will be less revenue in the system as a load of people will lose their jobs from restaurants, pubs, entertainment venues, cafes, etc etc.... Does not help anyone does it Jezza
The law of unintended consequences. Something this government has no concept of.
Steuart: ‘ unintended consequence’ not sure, I’m beginning to think they are ‘entirely intended’! Who knows.
Headless and chickens spring to mind
Or turkeys voting for Christmas
I swear the chancer of the exchequer, apologies I mean the chancellor of the exchequer’s red briefcase is literally just a big red version of Das kapital now days. Karl Marx would be proud of Jeremy hunt the landlords.
At this point us landlords are just now political footballs, the politburo (all politicians red and blue) would rather deflect blame on to us for the housing crisis than admit their idiotic predecessor‘s shambolic town & country planning act in 1947 amongst other things caused the shortage in housing in this country.
Generation Rent and the government seams to lack the most basic understanding of why LL's have moved from long terms lets to short terms lets in areas where these are viable. Its the result of increased tax, increased regulation and the governments removal of the ability to deduct mortgage interest as a cost business (which is allowable in every other kind of business).
If they now increase taxation on short terms rents, their is nothing that ensures these the LL's will return to lettering the property long term.
The government needs to "stop that stick approach to LL's and try the carrot" instead. We need actions that incentivise LL's to stay in the sector and rent long terms, returning mortgage interest take relief and other taxes for example may help change the "get out of the industry mind set" that most LL's current have..
So true, I honestly think they see all the landlords flocking back to long term let’s 😂😂😂 it’s like an early April 1st.
Apart from saying that this Government is pointless I will wait to see the budget until I get all hot and bothered. They change their minds so much I think lets wait and see what actually is in the budget is the best way forward.
I will quote George Galloway though and say the conservatives and Labour are different cheeks of the same arse.....and we know what that part of the anatomy produces!
From a purely housing point of view isn’t it a no brainer to flip the tax situation and remove relief on holiday homes and reinstate it on residential lets.
Yes, but they will just remove it for both 🤷♂️💵💰
People use Airbnb because they face either hovels or extortionately priced hotels, whilst this will free up housing it will also increase unemployment as people think " I'll be blowed if I am spending £400 for a week then rain in Torquay when I can go to Croatia for a fortnight all inclusive."
This is the trouble when you listen to spoilt children to write your tax policy.
Removing Stamp Duty would free up larger homes from elderly people who want to downsize but can't. Increasing the IHT threshold would stop people who have relatives with houses in our cities getting clobbered just because of time.
Reversing S24 would bring fresh investment into Housing but no Gove has no clue.
Rumour has it that the Tory's are now planning to replace Maggie T statue in parliament with one of Karl Marx.
Wait till Kier Stalin gets in waving his little red head (Angela Rayner) flag about.
These politicians (blues and reds) need to be reminded FREE markets are the foundation of successful countries.
Marxist policies have failed in every country that they have been enforced Dave.
Talking of Angela Rayner, George Galloway has vowed to take Angela Rayner's seat at the next General election.
@ Ellie
These are strange times indeed. I never thought Galloway would get my support. Fortunately I do not live in the flame-haired one's constituency, so I do not have to hold my nose and give him my vote! LOL
The NRLA have taken aim at the barn door and, as per usual, missed. 😡 They think scrapping the levy on SDLT will persuade landlords to buy. 🤔 Scrapping S 24 and retaining S21 might if Labour were not waiting in the wings. 😠
The activists should be careful for what they ask for! Soon there will no landlords left and they will be out of a job!
There are no perfect solutions to housing. Either you spend billions building social housing which will be an albatross around the neck of local government as most public servants can’t run a bath as opposed to managing a large housing portfolio or you allow a free market ( with minimum safety standards) and allow the customers make deals with the suppliers. It’s patently obvious that the middle ground isn’t working. Easy to fix but hard to sell without annoying the entitled do gooders. Ultimately the customers ( tenants) would prefer to live somewhere that’s safe and reliable rather than the uncertainty we have now after 10 years of government intervention and best intentions and we all know where good intentions lead.
There is a reasonable Solution that was working for the last 30 Years. Put things back as they were . And do nothing.
Remember before the Governments, and Councils Attacks on Private Landlords . 85 % of tenants were happy with their lot. There were plenty of Rental Accommodation for families as well as individuals. Landlords could make an acceptable Return on Investment. Now In the areas I work there is nothing to rent . And rents have increased.
Spot on Stephen, previous to introduction of section 21 by Maggie Ts then tory government in 1988 properties to let especially in London were virtually non existent for real fears of property owners back then of being straddled with a lifetime sitting tenant on council controlled rent and it seems we're now heading back to the future.
The faux-Tories believe that they can buy the votes of tenants. They can't.
What they can and will do, is lose the votes of landlords.
Exactly. I tweeted them on Friday about M&S winning their appeal against Gove. M&S said they should lead on policy and not give in to pressure groups. I likened it to the RRB.
Don't worry folks, it'll get even worse when labour gets in!
With the proceeds of sale from selling 3 flats I have put some in a bank paying 4.75 percent and the stock market. I have already made 20 percent on the stock market. So who would be a landlord with all the worry and vilification!
I have put money into Aviva. I am up 13% since June and another 3% received for the dividend. I have also Berkshire Hathaway which is up since 7% in 3 months. Amongst others. I have also created some fantasy portfolios with some big growth stocks. I have made huge gains. So will keep experimenting until I get my sale proceeds.
Well done Margaret and Nick good luck to you
My son was a landlord in partnership with my Wife and me. A couple of years ago he decided it was too much hassle and now puts most of his savings into stocks and shares ISA. Tax free and no effort or hassles.
Well if your property is vacant that can be good. Another restriction the Council has come up with if your license has expires you cannot use Section 21.
Also if they decide that you should be licensed and are not you have acquired a Sitting Tenant. Anything for badness.
About to become an accidental landlord just because I'm moving in with Partner. Only want to retain my property for security and rent out. Feels like the Govt are punishing me from building a new chapter in my life. Any advice would be highly recommended. Been residential home for 16yrs. F.A is saying don't sell and it's in a wanted London area, commuters dream.
Find a good local agent, not one of the big boys though
I agree with Andrew and pick a SAFEagent.
Sell it. Don't take the risk of not getting it back. Having an ombudsman awarding compensation for all sorts and fines.
Selling it might be the best way forward, as Nick says, particularly as you could sell it free of capital gains tax. I believe that once you let it there are tax implications if you subsequently go on to sell it. I am not a tax expert so can't really give much advice about that.
However, if you do want to keep your property, then make sure that it is written into the contract that you have lived in it as your main residence and reserve the right to return to live there, or something to that effect.
Also consider perhaps renting to students as it is possible that they may not have security of tenure in the future.
CGT will be proportioned over the time you have owned it, lived in it as your principal residence and rented it.
What about a lodger? They can have only one room and I suppose it’s easier to ask them to leave if you decide to live again in your property.
The rent might not be that high but if you don’t have to pay a tax on the income, it’s worth it.
And you could keep an eye on your property plus if the property is in London ,you could be as choosy and picky , I mean selective, as you want.
That sounds like a good idea Nikie, but you would have to make sure that the lodger didn't claim that you were not living there and that you had a main residence elsewhere.
However, if new accidental landlord only owns one property, then might be OK with the lodger idea.
I agree with Ellie. Rent to students or student nurses etc. if it's in a suitable area.
Use a small, local, owner managed agency, not a big corporate staffed by fresh faced graduates with zero experience or common sense.
Having already suffered everything the new legislation in England threatens for over 6 years, renting out is still better than selling out and selling will always be available as a last resort.
However, since you currently have full cgt relief, you should perhaps sell it now to a company set up and wholly owned by you to minimise any future cgt bill on a later sale.
I'm no longer buying in Scotland but I'm definitely not starting to sell, even at 74.
Sell it, this is a really bad time to get into the landlord business. If you don’t sell it you may well risk loosing it to the state.
AJR. Have we lost it to the State already with the restrictive laws of licensing Schemes, everything that’s gone wrong with the PRS has been deliberately caused by Government to make it happen for their friends Big Boy to take over the Market.
Anyway it no use saying build more the Big Boys are doing it already but the wrong type in the wrong places only in prime location to make a killing pack-in high rise flats with Government support with Schemes to offload them to gullible buyers getting saddled with a life sentence.
So the answer is to remove the Policy’s that brought this situation about, now what could be simpler than that, remove the causes and any shortage would disappear like a miracle and people get their confidence back instead of being smothered.
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