Prominent market commentator and buying agent Henry Pryor has been involved in a Twitter spat over whether the changes to mortgage interest tax relief will actually impact on a significant number of buy to let investors, and whether it constitutes a ‘Tenant Tax’.
Campaigners against the changes to mortgage interest tax relief, which comes into effect this week and involves a phased reduction of the relief each year until 2020, have dubbed the change a Tenant Tax in a bid to gather wide support.
Pryor argued on Twitter that the mortgage interest changes would firstly effect only a minority of landlords and secondly was specifically targeting them - not tenants. Therefore he suggested tagging the measure as a ‘Tenant Tax’ was inaccurate and disingenuous.
“Lots of respectable people are going to tell you there’s a Tenant Tax coming in on Thursday. There isn’t” Pryor tweeted. He went on to tweet that publicity surrounding a ‘Tenant Tax Awareness Week’ currently going on was “complete nonsense” which “may unsettle a lot of tenants quite unnecessarily.”
Pryor told his near-23,000 Twitter followers that he was deleting his account with online forum Property Tribes because of his opposition to the approach taken by the forum’s founder, Vanessa Warwick.
He went on to tweet that a claim by the Residential Landlords’ Association claiming that up to “a million families face rent increases” because of the tax change was “complete pants” and was nothing more than “scaremongering - at best.”
After the exchange, Henry Pryor told Letting Agent Today he had a lot of sympathy for the landlords impacted by the changes that have and remain to be introduced, and he accepts that many will find their sums don't add up and some will have to refinance or sell up.
“However, I have an issue with the some of the claims being made” he insists.
“Stamp duty may have increased for those buying a property to let out but this is a cost that could be given to the seller (as is happening at the top of the market) and is a cost that can be off-set against any future capital gains tax or indeed (for the moment) carried forward against any loss” he says.
He goes on to call the description of the mortgage interest tax relief change as the ‘tenant tax’ a “public relations stunt” that may unnecessarily worry some renters.
“The changes being made to the landlords’ ability to off-set finance interest charges against income may be unfair, may be politically motivated and may be worthy of challenge but it does only impact seriously on landlords with mortgages.
“I believe that only one in three landlords has a mortgage and only a proportion of these are highly geared. The majority of landlords will not be able to argue for a rent rise or seek to terminate a tenancy and blame the tax changes. At least they won't be able to get away with doing so” Pryor concludes.
%20-%20IMAGE%20Client%20Accounting%20%E2%80%93%20what%20are%20your%20options.jpg)
%20(002).png)
.png)
.png)
%20(002).jpg)
Join the conversation
Jump to latest comment and add your reply
I haven't read the 'spat' but it seems as if, as with so many attempts at human communication, emotion has been allowed to take precedence over logic and pragmatism. The governments tinkering with the PRS is politically motivated and their public facing arguements are disingenuous. Henry Pryor agrees the changes are unfair but makes a slightly pedantic point about those opposed to the changes characterising it as a 'tenant tax'. The trut is it makes no difference what commentators say about these changes or what they call them, the outcome will depend on supply and demand factors. If supply goes down and demand goes up then rents will likely rise, call it whatever you like. In my view though the private landlords, generally core conservative supporters, have been picked on and betrayed by their own party. I think these changes strike st the heart of aspiration and the desire for financial freedom and are an ill advised attempt at social engineering, we shall of course see how this develops, people are resourceful and they never cease to surprise me how ingenious they can be.
The spat involved several people connected to the issue and Pryor is the one being disingenuous, a government apologist willing to peddle whatever nonsense they feed him. Even if you follow his/govts own belief that 'only 1 in 5' are affected, thats a staggering 425,000 landlords! How many tenants is that likely to see rent rises or evictions?
You can repeatedly ask Pryor the same questions and never get an answer: why does the IFS call this 'plain wrong'? Why does the IEA call this 'a schoolboy error'? Why does he refuse to acknowledge BOTH versions of its failure in Ireland? Why the belief that tenants wont be paying higher rents when the market alters on changed circumstances? Where will all the evicted live? And if theyre not being evicted, why do councils everywhere say they are in ever greater numbers? Why does he not recognise a landlord selling usually equals a tenant eviction?? His attitude and unwillingness to recognise these facts do his 'credibility' no good at all.
I have heard of this man and heard him speak once on the radio. He doesn't seem too bright so I wonder why he is seen as some kind of expert. The experts on this are the IFS, ICAEW, the iea and the CML for starters. Also two former members of the MPC, Professor David Miles and Dame Kate Barker have spoken out against it. The crux of the matter is that profit = income - costs. The idea that you cannot deduct the main cost of a business when calculating profit is a nonsense. That wouldn't change if only one person in the country was facing this bizarre new tax regime. As James, above, has said, however, even given the Government's underestimate of landlords affected (they haven't included base rate taxpayers who will become higher rate taxpayers because their finance costs will artificially inflate their 'profit' and they will be taxed on a fictitious income), it would still mean more than 400,000 landlords. As this will be the landlords with the highest finance costs, naturally, they will have the most properties (apart from those who have a few expensive properties with high mortgages on them), and it is estimated this is likely to affect 4.6 million tenants. The term 'tenant tax' isn't perfect; I would call it a tenant and landlord tax, but that's a bit wordy. So far I have increased my rents by 10% in preparation for this tax, whatever you want to call it, and this tax will come from the tenants, go into my bank account and then be sent off to HMRC. So in this way it can be seen to be a tenant tax, with me as the tax collector, although as time goes on I will expect to also have to absorb some of the costs. It will be a shared burden between landlord and tenant and will cause havoc and misery in the PRS. To defend it when you understand it is to be an idiot and/or a liar.
Rents are already rising unfortunately as with everything if the base cost increases so does the end price. THIS IS DOWN TO TORIE POLICIES THE PARTY THAT LIKES TO TAX THE SMALL PEOPLE TO DEATH
Even the landlords not affected by Section24 will increase rents . If you seen a neighbour sell a house for 175000 would you take a 150000 for yours if they were the same? Same as if the neighbour rented the house for 850 PCM are you going to rent yours for 600pcm
Institutionals will be high rents to get the yields for the shareholders and this is what the government is pushing in and getting rid of the small landlord for.
It remines me of the large superstores which crushed many small shops and can now dictate what prices it pays to the supplier
Does Henry work the the Tories he should join the Treasury he would fit in well same tunnel vision rubbish
Perhaps "tenant tax" is the wrong phrase to use however this will inevitably have an impact on tenants, be it through rent rises or Landlords being unable to afford to maintain their properties as they would like.
call it what you like,this government are clowns.
I have been forced to increase my rents by 10% and have already done so.!
If my agent fees are passed on to me,I will have to pass these costs on too!
Thanks to the clowns!!!!!!!!!!!!!!!!!!!! in fact any increase will be passed on.
I am in business and treated unfairly by the clowns and have to fight back.
It's not a Tenant Tax just a partial removal of tax relief which first time buyers don't get. The use of Tenant Tax is deeply flawed and is an attempt by highly leveraged landlords with risky business models to mislead the public. Most decent landlords have nothing to worry about just those debt junkies who continue to take all equity out of their properties to buy more and have no way to repay the debt.
Sec 24 should eventually provide a more sustainable and healthy rental market.
I'm sure you have already considered and rejected the idea that interest is an expense of doing business and that disallowing it for tax relief or individuals only, not companies is unfair and unprecedented but I'm equally sure the facts are irrelevant to the thinking.
One other thing, if there is a crash and prices go down will you shed a tear for the poor Landlord? Thought not, people live in income not capital growth, you could even say the paper value of a property is pretty irrelevant, it's the net income people use to buy stuff in Sainsbury's
Oh dear, 1664. Been at the 1664 again, have we? Have you learned anything about Schedule B and imputed rent, and why homeowners don't get tax relief? You do realise landlords dont get tax relief on their own homes, so are already on a level playing field with owner-buyers? And at the risk of asking too many questions, why is it I have to buy a car personally with no tax allowances but rental companies can claim their finance costs... any ideas?
The truth of the matter is you don't like allowing houses into the equation. In fact you're quite self-centred and discriminatory because you want to deny renters the right to have a rented property. Where do you suppose they should live if landlords aren't supplying their needs? I only exist because people keep ringing me up asking me to rent them a house - yet there are thousands of affordable ones on the market round me. Ever wondered why they're not being bought??
With prices at 7 times salary levels in some places + banks denying mortgages to many youngsters and those with temporary and zero hour contracts it is not surprising many cannot buy and have to rent. Demand is increasing not falling - though eu citizens returning home might empty some properties.
He's an idiot. On what facts does he base the comment "I believe only 1/3 of landlords have a mortgage" ? Both my properties have mortgages. The rent wI'll go up 25% over 3 years to restore my income to pre tenant tax levels.
Apart from 1664 who's always looking for an opportunity to enjoy the misery that others (tenants) will suffer through S24, there's little I can add to the comments others have said. I'd ask one question of Mr Pryor though.... Please could he provide a list of all the goods and services that have had a tax increase that hasn't been passed on to the end user??? It shouldn't take him long.
As I was directly involved, please allow me to say what actually happened.
I received a confrontational approach from Henry Pryor on twitter yesterday morning which I responded to trying to assist him.
I sent him a couple of links but he said they didn’t answer his questions.
I told him that Property Tribes was only an information sharing channel and allows all views to be heard and that he would be welcome to post them on Property Tribes, if he had concerns about the Tenant Tax campaign causing distress to tenants, because he said that they were reading about it on PT. By that same channel, he could also use his opinion to reassure them via the same medium they were reading about it on.
He informed me that he had ALREADY deleted his account and he wanted to debate it all on twitter, despite him already having claimed that tenants were reading it on PT, so it’s unlikely they would see it on twitter?
I explained that I was struggling to answer his questions in 140 characters, and he took that to mean that avoiding being held accountable to his questions.
Now to an important piece of missing information. I then phoned him and asked him politely how I could assist his understanding of the campaign. During a 25 minute phone call, he explained that I was damaging my brand by giving credibility to a false campaign. I explained that I am just an information sharer. I thanked him for his concern over my personal brand and that I had taken on board his views that the Tenant Tax is the wrong name for the campaign and that I was not involved in choosing the name.
He wanted hard statistics about how many landlords would be affected, but I explained to him that part of the problem was that no impact statement or research had been done by Government, and I suggested that he contact the Treasury to ask them why they hadn’t done an impact statement.
That seemed to satisfy him or he didn’t have the guts to tell me otherwise. He subsequently claimed I had “ducked out of the argument because I didn’t have the good grace to admit that I had lost it”.
I did not duck out of any argument and I had the good grace to call him and try and resolve his issues with me in an amicable and professional matter and believed I had done so. I wonder why he didn’t mention that when contacted by reporters?
Henry Pryor saying he deleted his account because of his opposition to my approach is the same as saying he’s deleted his Sky account because he didn’t like or agree with what the newsreader reported.
No one forced him to read Property Tribes just as no one forced him to watch Sky News. He could have got the same story from the BBC or ITV.
He attacked the messenger, not the message and I was polite and civil towards him. It’s a shame he didn’t afford me the same courtesy.
I also explained that the Tenant Tax campaign is being run by a group of industry stake-holders and that the coalition were behind it, and that Property Tribes was the information sharing channel for the week’s campaign. I am not Property Tribes just as Simon Shinerock is not TODAY.
The very fact that I asked him to share his views on PT shows that it is nothing more than an information sharing channel and the same people who he was concerned about could be communicated with there. My view does not come into it, otherwise than, as a landlord, I support the fight against S24, and the even bigger picture is that if the government succeed here, then what next attack on the landlord community will they come up with?!
Thank you for reading this lengthy post and please do refer to the twitter stream for verification.
Well done Vanessa, a clear and concise reply. I think that Henry didn't like being told that his view was not shared by the majority of Landlords on your forum. Easiest way out of an argument? Walk away. Your (almost!) impartial response was a perfect antidote to his attempt at headline grabbing. Of course, it is not really a Tenant tax, it is clearly a Landlord tax aimed at financed individuals. The impact to tenants is the point being underlined as he well knows which is already hitting & will continue. I think that most Landlords are very clear on this point. The point being conveniently ignored by Henry is that rents will inevitably rise through this unfair tax. Maybe he has too many wealthy clients for whom S24 will not have the slightest impact, but we will see those same individuals jump in and follow on as rents rise, it's a double win for them. I think that the lack of an impact statement was a key error on the part of the government and this will come home to roost over the next few years as rents rise and stock levels decline.
Anyway the good news? Government are so tied up in Brexit negotiation we can expect less meddling in the housing market whilst the beaurocrats are busy rewriting policy for years to come.
Please login to comment