For the last thirty years, the Government have passed responsibility of housing the masses from local authorities (i.e. council housing) to the estimated 1.5 million British buy-to-let landlords.
However, since 2015/16, Tameside landlords have faced increasing tax burdens as each year goes by; with the removal of mortgage interest rate relief on income tax (Section 24), the introduction of the three per cent surcharge on stamp duty, and the reduction of the letting relief on capital gains tax.
The eradication of higher rate mortgage interest relief (also known as Section 24) announced in 2015 by George Osborne has been estimated to add a further £1.9 billion nationally to landlord’s tax liability.
And by 2021/2, when the full extent of the Section 24 relief kicks in, that income tax liability will rise for Tameside landlords.
Whilst raising money from landlords is an easy target, and the tax receipts attractive, it does make the landlords financial burden even heavier.
This doesn’t even take into account additional liabilities such as Capital Gains Tax, the three per cent additional duty on top of the prevailing Stamp Duty Land Tax and VAT.
Ambiguity and a lack of certainty is the foe of all investment, which has been seen with Brexit. Now, just as things are starting to get rosy in Q1 with the pent-up demand released with the so-called ‘Boris Bounce’, the last thing we need as a ‘collective’ property industry is for the government to see landlords as a constant cash cow.
This new Tory government must acknowledge the value the majority of private landlords offer by housing in excess of 9.45 million people in the country.
Westminster needs to take a balanced approach to the significant issues of possession (especially with the impeding removal of section 21 evictions), taxation and all rental properties needing to be at least an ‘E’ energy efficiency rating; to connect the value the private rented sector offers the country by effectively housing over a fifth of the population.
Once again it is the image of the minor few corrupt landlords who are impacting the vast majority of compliant ones (of whom I ensure each of the landlords I do business with is amongst). Housing is of course an important foundation of our country and indeed Tameside as a borough, so it is always crucial to ensure that it is properly and thoroughly regulated. However, the hammering that the compliant landlords receive in such cases is also detrimental to prospective tenants who are in need renting these buy-to-let properties.
I am therefore pleading for Jonathan Reynolds, Andrew Gwynne and Angela Rayner, the Labour MP’s covering Tameside, to utilise their skills to highlight and take a more holistic approach and attitude to the private rented sector; tackling issues which affect a Tameside landlords’ capability and capacity to strategically run an effective buy-to-let business.
For more information on riding the wave of government negativity towards landlords and becoming a successful investor within the Tameside borough, please do give me a call on 07709 505 442.