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The problem with having a thoroughly inexperienced Chancellor and a properly \u2018woodenheaded\u2019 Prime Minister, is that they are learning the job \u2018on the hoof\u2019 and we are all going to pay a hefty price for this ineptitude.<\/p>\n
More \u2018floaters than a sewage farm\u2019<\/strong><\/p>\n In advance of this autumn\u2019s Budget, the Treasury is casting out more \u2018floaters than a sewage farm\u2019 and in doing so, is trying to assess the reaction to their proposed tax plans, which no doubt will be thoroughly indigestible, but their hope is that it will help fill a self-engineered \u00a340-50billion hole in the government finances.<\/p>\n The latest proposal is to tax landlords via National Insurance charges on rental income, which supposedly could generate \u00a32billion for the Treasury\u2019s coffers.\u00a0<\/strong><\/p>\n The \u2018straw that would break the camel\u2019s back\u2019<\/strong><\/p>\n Although this is relatively de minimis in terms of the UK Budget (which is \u00a31.279trillion), it is none-the-less, the \u2018straw that would break the camel\u2019s back\u2019 for the lettings industry, which has become asphyxiated by the following, relentless legislation and regulatory changes, imposed over the last ten years:<\/p>\n .\u00a0 Mortgage Interest Relief restriction, 2017-2020<\/strong><\/p>\n Landlords can no longer deduct full mortgage interest as an expense.<\/p>\n .\u00a0 Stamp Duty Land Tax surcharge, 2016<\/strong><\/p>\n An extra 3% surcharge on additional property purchases.<\/p>\n .\u00a0 Reduction in wear and tear allowance, 2016<\/strong><\/p>\n Old 10% wear and tear allowance replaced with actual costs.<\/p>\n .\u00a0 Energy efficiency standards, 2018<\/strong><\/p>\n Rental properties must have at least EEPC rating.<\/p>\n .\u00a0 Right to Rent checks, 2016<\/strong><\/p>\n Landlords must check immigration status of tenants \u2013 a legal compliance burden with penalties for errors.<\/p>\n .\u00a0 More stringent safety standards, 2020-2022<\/strong><\/p>\n Mandatory smoke and carbon monoxide alarms.<\/p>\n .\u00a0 Electrical safety standards, 2020<\/strong><\/p>\n Stricter fire safety regulations in HMOs.<\/p>\n .\u00a0 Tenants Fees Act, 2019<\/strong><\/p>\n Landlords\/agents can\u2019t charge most fees to tenants (i.e., letting\/admin fees etc.) shifting costs to landlords<\/p>\n .\u00a0 Deposit cap, 2019<\/strong><\/p>\n Security deposits capped at five weeks rent.<\/p>\n .\u00a0\u00a0 No fault\u2019 eviction reform, 2019<\/strong><\/p>\n The Renters (Reform) Bill will abolish this.<\/p>\n .\u00a0 Longer notice periods, 2020<\/strong><\/p>\n This was introduced as a result of the Pandemic.<\/p>\n .\u00a0 Prudential Regulation Authority stress testing, 2017<\/strong><\/p>\n Tougher affordability tests for Buy-to-Let mortgages including portfolio landlord rules.<\/p>\n .\u00a0 Higher mortgage rates, 2022<\/strong><\/p>\n Rising Interest Rates squeezed profitability.<\/p>\n .\u00a0 Renters Reform Bill, imminently<\/strong><\/p>\n Introduction of open-ended, periodic tenancies and creation of National Landlord register.<\/p>\n .\u00a0 Talk of high energy standard by 2028<\/strong><\/p>\n Private Buy-to-Let landlords comprise 12% of all homes in the UK and 93% of them are individuals or groups with just 6% operating through a company.<\/p>\n The \u2018golden goose which lays the golden eggs\u2019<\/strong><\/p>\n Given that 19.4% of all dwellings in the UK are privately rented, with 17.5% socially rented and 61.7% of homeownership, you would have thought that the government would want to do everything possible to protect the \u2018golden goose which lays the golden eggs\u2019\u00a0 \u2026.\u00a0 wouldn\u2019t you?<\/p>\n As such, 31% of all private landlords are planning to scale back their portfolios and almost 90% have cited regulatory or tax changes as the primary reason.<\/p>\n Over the past few decades, successive UK governments have under invested in social housing resulting in a significant shortfall.<\/p>\n Right now, local authorities and the Housing Associations, cannot meet demand so that the private rented sector absorbs millions who can\u2019t afford to get onto the property ladder and would otherwise rely on social housing, of which 1.2million families are currently on this list.<\/p>\n Rents are rising relentlessly by 10%<\/strong><\/p>\n With private landlords now determined to sell up and flee the sector, the net effect is that supply of rental properties is shrinking, and rents are rising relentlessly by 10%, making them even more unaffordable for the vulnerable.<\/p>\n As if the foregoing isn\u2019t bad news enough, currently, the build rate of new homes is roughly 200,000 per annum and well below the 300,000 per annum target of the government in the Labour Party\u2019s manifesto.<\/p>\n Reliable analysts have predicted that over the next five years only 840,000 will be completed which will be 42% short of the 1.5million target guaranteed by the Housing Minister.<\/p>\n \u00a0<\/strong>What do people do when they are uncertain \u2026 they do nothing!\u00a0\u00a0 <\/strong><\/p>\n We all know that the Chancellor is trying to fill a \u00a340\/50billion hole in her Budget but these \u2018floaters\u2019 of draft legislation are serving to undermine confidence in the markets and what do people do when they are uncertain \u2026 they do nothing!<\/p>\n \u2018Suck it and see\u2019 policy<\/strong><\/p>\n This method of \u2018suck it and see\u2019 policy is having a devasting effect on decision making across the housing sector and this can only exacerbate the shortfall of tax return for the Treasury from transactions which have failed to materialise as a result.<\/p>\n The government, with their terminal myopia, seems to conveniently forget that the private rental sector is vital to providing homes for those who can\u2019t afford to get onto the property ladder. \u00a0As long as they can\u2019t build appreciably more social housing, they need to pay due respect to this sector, instead of treating Buy-to-Let landlords, as pariahs.<\/p>\n Everything that this government seems to do nowadays, across the board, somehow always turns to the \u2018brown, unfragrant, sticky stuff\u2019 and as the say, \u2018none so hopeless as those that do not bother to read the room.\u2019<\/p>\n","protected":false},"excerpt":{"rendered":" The problem with having a thoroughly inexperienced Chancellor and a properly \u2018woodenheaded\u2019 Prime Minister, is that they are learning the job \u2018on the hoof\u2019 and we are all going to pay a hefty price for this ineptitude.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-3503","post","type-post","status-publish","format-standard","hentry","category-property"],"_links":{"self":[{"href":"https:\/\/www.glentree.co.uk\/blog\/wp-json\/wp\/v2\/posts\/3503","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.glentree.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.glentree.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.glentree.co.uk\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.glentree.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=3503"}],"version-history":[{"count":3,"href":"https:\/\/www.glentree.co.uk\/blog\/wp-json\/wp\/v2\/posts\/3503\/revisions"}],"predecessor-version":[{"id":3507,"href":"https:\/\/www.glentree.co.uk\/blog\/wp-json\/wp\/v2\/posts\/3503\/revisions\/3507"}],"wp:attachment":[{"href":"https:\/\/www.glentree.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=3503"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.glentree.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=3503"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.glentree.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=3503"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}