Labour's rental cap etc

[loose cannon]

What gets my goat is the fact there are streets and streets of empty houses in run down areas ! Nobody wants them because there is no local work ! Even though most of those houses could be filled with people that don't or have no desire to ever work ! we need to build more houses ? Should fill the empty rotting ones first
I'm sorry but the existing houses should be the first port of call for people that don't work yet demand a roof over there heads, I don't give a rats bottom if they don't want to leave London to move to Dudley, if you don't can't won't work then I'm sorry to say that you get what your given, patch up the empty houses and move the work shy feckless into them I'm sorry but you give up any rights to live in your home town if you don't put f all in, but we can't upset them now can we because there important to the well being of oh sorry I can't think of anything !

[230TE]

As someone who has no chance of being able to buy a house in the foreseeable future I'm sh**ting bricks over this proposal. It's hard enough already trying to find a landlord who will allow pets: the main effect of artificially disconnecting rents from property values will be to persuade a lot of landlords that there is no future in property rental, end result is that I end up living in a cardboard box under a flyover with the wife and dogs. At which point Labour will introduce a packaging tax and I'll really be screwed. It's the sort of policy that only a Leftist living in a £2.7m house in Hampstead, bought with an inheritance, could come up with. Unfortunately it is likely to appeal to a lot of people who will only see the short-term benefit (Cheaper rents! Yippee!) and can't work out that the landlords who remain will front-load the monthly rental to compensate for the three year cap. Much more of this and even France will start to look an attractive option. At least the French have recently tested most of Labour's bad economic ideas and discovered they don't work.

[Mario149]

I don't even think you're going to see cheaper short term rents. First thing I did yesterday was email my letting agent and ask her whether the market rates for the flats we let out had gone up since their tenancies started. We let at least one of ours slightly below market rate for quick occupation, but if Labour win and decide to introduce this cap and the market rate has increased, to protect our medium term income from them we might have to give notice and start a new contract (possibly with new tenants) at a higher rate. Or at the least not allow tenants to renew if the legislation is already in effect as we wouldn't be able to charge what the flat is worth to the existing people, which seems like madness: turning down good tenants who want to stay and pay market rate. Admittedly this is london and one bed flats so somewhat different to other situations, but still.

[Countdown]

The best way to cut rents would be to reduce HB.

[piquet]

it's a stupid idea that's designed just to be popular, but like the mansion tax one way or another much greater taxation on the buy to let market is coming in the next few parliaments and once started it will only go up.

At the moment they are seen to be like the bankers, making a fortune on everybody's misery. I know its not true but that's the perception. Houses prices and rents keep going up someone (apart from the government or the public) must be to blame, lets tax those people.

So buy to let landlords aren't popular, they can't run away with their assets as their fixed here, they're making money, there's not some huge number of them to be a huge an effective backlash.

I would suspect fixing rents is stage 1, stage 2 once the rents are fixed is something like removing tax relief on interest and furnishings or a 5% levy on rents, something that means only the buy to let landlord suffers but can't pass it on

[Guybrush]

Countdown said:

The best way to cut rents would be to reduce HB.

Of course that's the obvious way, but that avoids a class war 'them-and-us' element which Labour loves to play.

[Guybrush]

Mario149 said:

I don't even think you're going to see cheaper short term rents. First thing I did yesterday was email my letting agent and ask her whether the market rates for the flats we let out had gone up since their tenancies started. We let at least one of ours slightly below market rate for quick occupation, but if Labour win and decide to introduce this cap and the market rate has increased, to protect our medium term income from them we might have to give notice and start a new contract (possibly with new tenants) at a higher rate. Or at the least not allow tenants to renew if the legislation is already in effect as we wouldn't be able to charge what the flat is worth to the existing people, which seems like madness: turning down good tenants who want to stay and pay market rate. Admittedly this is london and one bed flats so somewhat different to other situations, but still.

A great many landlords will do this. Labour doesn't care about unintended(?) consequences, only how it appears to their shouty unthinking lefty target market.

[jogon]

Countdown said:

The best way to cut rents would be to reduce HB.

Yep. How many houses could you build with a £25billion annual budget.

[Derek Smith]

Rent control has been tried many times in the past so hardly new. In fact, this move was quite predictable.

[98elise]

piquet said:

I would suspect fixing rents is stage 1, stage 2 once the rents are fixed is something like removing tax relief on interest and furnishings or a 5% levy on rents, something that means only the buy to let landlord suffers but can't pass it on

Removing "tax relief" on interest would cause just about every HA to collapse. All businesses can offset the cost of finance against tax. You are only taxed on profits, not turnover.

Edited by 98elise on Tuesday 28th April 10:14

[AyBee]

I was also pleased to hear that they were removing stamp duty for first time buyers.....up to £300k! If they want to help out first time buyers, help them out, but don't stick a fking cap on it. £300k wouldn't buy you a reasonable 1 bed in a nice area of SW London. Why should I be penalised just because I live in SW London? fking morons!

[jamiebae]

AyBee said:

I was also pleased to hear that they were removing stamp duty for first time buyers.....up to £300k! If they want to help out first time buyers, help them out, but don't stick a fking cap on it. £300k wouldn't buy you a reasonable 1 bed in a nice area of SW London. Why should I be penalised just because I live in SW London? fking morons!

I spotted this one yesterday, surely it's designed to neutralise any house price fall from BTL landlords selling up by encouraging first time buyers to take up the slack.

My sister and her OH are trying to buy at the moment in Sussex, even there £300k isn't enough for a reasonable house in a nice area, for £250k you're in a 2 bed flat or a ropey area.

[AyBee]

jamiebae said:

AyBee said:

I was also pleased to hear that they were removing stamp duty for first time buyers.....up to £300k! If they want to help out first time buyers, help them out, but don't stick a fking cap on it. £300k wouldn't buy you a reasonable 1 bed in a nice area of SW London. Why should I be penalised just because I live in SW London? fking morons!

I spotted this one yesterday, surely it's designed to neutralise any house price fall from BTL landlords selling up by encouraging first time buyers to take up the slack.

My sister and her OH are trying to buy at the moment in Sussex, even there £300k isn't enough for a reasonable house in a nice area, for £250k you're in a 2 bed flat or a ropey area.

BTL landlords won't sell up though, they just won't re-let to existing tenants. There will be many ways to get around the rules, most of them not being in favour of the tenant. I also don't understand all this crap about landlords having to tell new tenants what the old ones were paying:
"Rent is £1500"
"But the last tenant only pad £1200"
"Ok, go and find a similar place for £1200"
"Oh"
Both the rent cap and stamp duty reduction are ridiculously badly thought out and designed with the aim of getting votes. At least if Labour get in and bring the economy down again, I might be able to afford a nice 2-bed instead

[jamiebae]

Anything that adds either cost or hassle to managing a BTL will put some people off though. There are a lot of people like me who have property as a sideline and if it becomes a pain to manage then they'll just get out. Remove tax relief on mortgage interest and it's going on the market tomorrow, make it harder to put the rent up or change tenants then I'll weigh up my options. At the moment none of this looks too bad as I see it, but I'll be putting a call in to the letting agent just to check what their view is.

[oyster]

How about just netting more of the unpaid tax on BTL profits?

Tax at source via the lettings agent and then landlords could claim back tax against losses or expenses via their annual returns, instead of the other way round.

A lettings agent friend was telling kme recently that hardly any of their landlord clients even bother filing a tax return. Tax evasion is rife.

[jamiebae]

oyster said:

How about just netting more of the unpaid tax on BTL profits?

Tax at source via the lettings agent and then landlords could claim back tax against losses or expenses via their annual returns, instead of the other way round.

A lettings agent friend was telling kme recently that hardly any of their landlord clients even bother filing a tax return. Tax evasion is rife.

Doesn't help if people self-manage though. I had to fill in a form and get authorisation to not have tax deducted at source so I think this does happen to some extent.

[98elise]

oyster said:

How about just netting more of the unpaid tax on BTL profits?

Tax at source via the lettings agent and then landlords could claim back tax against losses or expenses via their annual returns, instead of the other way round.

A lettings agent friend was telling kme recently that hardly any of their landlord clients even bother filing a tax return. Tax evasion is rife.

How does your lettings agent friend know the tax affairs of his landlords? My Agent certainly doesn't know my tax affairs. I've nothing to hide, but they are simply not in the loop.

I doubt anyone committing tax fraud would freely admit it to their estate agent.

[MKnight702]

Grumfutock said:

Along with the stamp duty, and all the other danling carrots they are putting out, my question is how are they paying for it all?

They won't pay for it, it will be up to the next Conservative Government to work out how to reduce spending to cut the deficit, then Labour can bleat about how the nasty Tories are bashing the poor and get re-elected by the sponging classes who have "rights" but know nothing about "responsibilities".

[BoRED S2upid]

These policies just aren't thought through and most are London specific. I haven't increased the rent for 3 years in London they probably increase every 6 months! Likewise with the mansion tax 2 million pound houses! There isn't one within a 50 mile radius of us! In London there are probably hundreds.

Labour should have had a London section of their manifesto. And in London we are going to do ...

[Countdown]

oyster said:

How about just netting more of the unpaid tax on BTL profits?

Tax at source via the lettings agent and then landlords could claim back tax against losses or expenses via their annual returns, instead of the other way round.

A lettings agent friend was telling kme recently that hardly any of their landlord clients even bother filing a tax return. Tax evasion is rife.

Perhaps a quicker way would be to compare Council HB records against Self Assessment returns (as in check which Landlords are filing SA returns). In theory it should be quite straightforward as the data is already collated as part of the National Fraud Initiative.