As we have been reporting over the past couple of years, landlords have been on Government’s radar with a number of new legislative changes that could impact future profitability.
The most notorious of these has been the new tax regime Section 24, affecting sole trader landlords with mortgages, and the introduction of the 3% stamp duty surcharge on second properties.
Support from MPs for landlords has been thin on the ground – until recently.
Enter Tory heavyweight, Iain Duncan Smith, former Secretary of State for Work and Pensions, and MP for Chingford and Woodford Green.
Back in June, Mr. Duncan Smith appeared on the expert panel at the Landlord and Investment Show at Olympia, where landlords were able to lobby him in person about their concerns.
Their input must have resonated with him because, following on from that, IDS wrote an article in the Sunday Telegraph – excerpted below:
“Finally, it is time to look again at the way we treat private landlords who buy houses to rent.
George Osborne’s decisions to impose a stamp duty levy on the purchase of homes to rent, to restrict mortgage interest relief to the basic rate of income tax and to tax a landlord’s turnover rather than profits have led to landlords scaling back or even leaving the sector altogether.
They are a significant provider of the additional housing we need. We should be encouraging them with devices such as VAT relief on conversions or even capital allowances, not punishing them”.
These sentiments have again been expressed by IDS in a keynote article for the Conservative Home magazine, published today:
In the article, titled “The housing crisis demands a revolutionary new approach“, IDS writes again in support of private landlords and the role they play in housing the nation:
“It is also time for us to reconsider the way we treat private landlords who buy houses to rent. A large number of them are talking about no longer buying to let, and they blame it on George Osborne’s decision to impose a stamp duty levy on the purchase of homes to rent, to restrict mortgage interest relief to the basic rate of income tax, and to tax a landlord’s turnover rather than profits. This, they believe, has led to private landlords scaling back their operations or even leaving the sector altogether. We should all be concerned about this, because private landlords are a significant provider of the additional housing we need. We won’t be able to provide all the housing in the medium term through aggressive building programmes alone. We will need other sources of accommodation, as well.
That’s why we should be encouraging them with devices such as VAT relief on conversions or even capital allowances, not punishing them. It’s no wonder buy-to-let purchases have fallen dramatically. Despite what has been said and written, they’re not enormous property magnates, for the most part, but often people using the market to help provide retirement income in later life or assets to pass on to their children”.
Ian Duncan Smith has added his voice to that of Lord Flight, who spoke out against the tax attacks on landlords at the Tenant Tax Summit in June last year:
To have Iain Duncan Smith speaking up for landlords and writing in influential publications is a great step forwards in the fight against Section 24.
This same regime failed miserably in the Republic of Ireland, to the extent that the Irish Government are now incentivising landlords to invest in the sector!
Let us hope that the Treasury see sense and listens to landlords and key influencers like Iain Duncan Smith and Lord Howard Flight. It won’t just be landlords who suffer, ultimately, if landlords exit the private rented sector – supply will dwindle and rents will rise, so tenants will be affected as well.
Northwood have lent our voice to the Tenant Tax campaign and we are committed to supporting our landlord clients throughout 2017 and ensuring they survive and prosper, no matter what challenges arise!
You can find your nearest Northwood office >>> here.
Northwood is one of the largest and most recognised estate agents in the U.K. and the leading supplier of Guaranteed Rent to give landlords complete peace of mind.
Find us on Twitter @northwoodUK or visit our YouTube Channel.