A firm of specialist solicitors claims that one in five landlords say they will be “out of business due to government tax break cuts” announced in the Budget by Chancellor George Osborne.
The government announced in July that it would reduce tax relief on buy-to-let mortgages from 45 per cent to 20 per cent in April 2017 and would change wear and tear tax relief from April 2016 to apply only to exact costs incurred, instead of a standard 10 per cent.
Now Access Legal, which describes itself as a specialist firm in landlord law, says the measures may drive 20 per cent of landlords out of the sector in the long term, based on the responses of 2,000 landlords questioned in a survey last month.
The firm claims some £9.9 billion is spent by landlords annually on repairs and covering rent arrears, and suggests “every landlord in the UK is out of pocket by £6,600 covering these costs, every year.”
The survey also shows a majority of landlords feeling that they should not be made responsible for conducting the Right To Rent immigration checks, and that the laws surrounding the private rental sector should be less tilted in favour of tenants.
Around three quarters of respondents stated that they did not feel their money was safe with letting agents, and 43 per cent “have dropped their letting agents to save money and avoid safety issues” according to the firm.
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Buy to Let landlords have had it too good for too long. It is time they put something back.
More importantly, they compromise the housing sector for owner occupiers, which is a bad situation for those other than buy to let landlords.
Mark,
What you write 'sounds good' yet does not stack up.
How does the provision of rental housing compromise the housing sector for owner occupants? Assume 20% of the investors where to sell. Who will be buying? Other landlords who do not have a tax issue? First time buyers who suddenly have the credit score and the deposit?
The announcement will make the Generation Rent campaign feel better yet will not increase the supply of housing that Shelter feels we need. The tenants who were living in the 20% that gets sold will need to find new housing. If there is a 20% reduction in rental housing will the shift be balanced by new owners?
The tax change is phased in over 4 years starting from 2017. Rents will naturally go up over the period anyway. Most landlords will continue to be owners. They will use bigger deposits and just pay less interest.
As LL need to increase rent to meet new tax oblidations , i would think that the first thing they will do is reduce availabilty to very needy social housing tenants...these people certainly wont be turning into OO any time soon. LL have only had it "good " due to low interest rates, when they go up the party wil be over for many overnight, with the new tax proposals in just means a whole lot more Landlords AND tenants will be suffering a whole lot sooner. Landlords provide a service at market rates, owner occupiers have the upper hand in terms of No CGT, a very generous tax free rental income from rent a room, and no tax to pay on rent ing out garages etc...... LL are battered with income tax on profits (soon to be on turnover ...money they actually dont have ) then CGT when they sell. Landlords are legally obliged to make sure gas and electrical systems are regularly inspected and are safe , OO dont have this obligation.
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