Monthly Archives: November 2015

Osborne bashes buy-to-let to boost his City pals


I trust that by now most small buy-to-let landlords will have woken up to the fact that Osborne and the so-called Conservative Party are out to get them.

Before the last election we all feared that Ed and his Band of Brothers would get in and introduce more anti-landlord legislation. We all hoped that shiny face Cameron & Co would ride to our rescue. But as the old saying goes, be careful what you wish for!

The Tories’ Anti-Landlord Legislation – Where we are now

These are the main anti-landlord changes that have been introduced by this ‘Conservative’ Government since they won the last general election, admittedly courtesy of the undemocratic first-past-the-post system…

  • A gradual reduction in the allowable financial costs of purchasing and owning, particularly mortgages, a buy-to-let property. By 2020 relief will only be available at the 20% rate, no matter what your total taxable income.
  • And in Osborne’s Autumn Statement from April 2016, he outrageously increased the Stamp Duty Land Tax (SDLT) by 3% specifically on buy-to-let properties and additional home purchases. So for example, the marginal SDLT on a property costing £400,000 will increase from 5% currently to 8% – on buy-to-let and additional property purchases only. The marginal rate above £250,000 for non buy to let purchasers will still amount to £7500, but for the Evil Buy To Let Investor it will be £12,000.
  • Landlords will have to pay any CGT due on selling an investment property within 30 days, as opposed to the current arrangement where it is in the January following the tax year of disposal.
  • And the tell-tale bit… Commercial Investors with more than 15 properties are expected to be exempt from Osborne’s changes.
  • Finally, although not directly instigated by central government, many local authorities (Labour and Conservative) have introduced compulsory registration schemes for private landlords. They pretend these schemes are designed to root out rogue landlords but in reality they are of course just more money making schemes because they charge landlords for registration.

‘I want to help more young couples buy their own home’

So kindly uncles George and Dave are really concerned about struggling first-time buyers are they? These are the same people who introduced draconian reductions in benefits for people on Disability Living Allowance, introduced a poorly conceived so-called ‘bedroom tax’ and wanted to strip away tax credits from people on very low incomes before any increase in the minimum wage kicked in. True, Osborne backed away from this in the Autumn Statement, but only because of huge opposition from both inside and outside the Conservative Party.

The fact is that PR politicians like Cameron love to use phrases like ‘more help for working families’, ‘getting more bobbies on the beat’ and ‘helping struggling first-time buyers’.

So what is REALLY going on?

It is my firm belief that the Conservatives are just trying to help their friends in The City and dressing it up as wanting to help first-time buyers, by hitting the Evil Buy To Let Investor, who has for years now become completely demonised.

The Tories and others claim glibly that buy to let investors are now the main cause of the unacceptable rise in the cost of owning your own home. No they are not. The causes are complex and based mainly on supply and demand. Not enough homes are being built to satisfy an out of control demand for all kinds of housing, caused mainly by uncontrolled immigration. But at the same time if we just build more homes without the related infrastructure then the country will literally grind to a halt and become a hideous place in which to live. Finally, the reason so many older people have been resorting to buying to let, is the ludicrously low rate of interest they can get by leaving their savings snoozing in the bank or trapped in a poor performing pension fund.

You see, for years now the big City institutions have been jealously looking at the level of returns private investors have been getting in the buy-to-let market. This has naturally choked off money that would otherwise have gone into their pension schemes and rip-off investment funds – where they earn high management fees.

On a personal note, I am not opposed to making life more expensive for people who wish to indulge themselves in second homes. But I am totally opposed to this continued demonisation and financial attacks on people who have bought property to let out as their business. Just increase interest rates and you’ll soon see people backing away from buy to let with all the stresses it can entail.

In short, The City wants a piece of the Buy-To-Let Pie, and Osborne plans to give it to them.

Sign The Petition

A petition has been set up to oppose the planned reduction in tax relief for buy-to-let landlords. I did not create this petition but I have signed it. This link takes you to it.


Are the Conservatives attacking small landlords mainly to benefit The City?

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Landlords and Letting – Landlord Insurances

The demonisation of the private landlord


Have you noticed that recently there seem to be lots of stories about rogue landlords, who fail to repair their property, harass their tenants and carry out ‘revenge evictions’?

This has been coupled with an increasing amount of legislation, aimed at forcing private landlords to jump through more and more legal hoops. Even since 2006 landlords have been forced to comply with government regulations on the handling of tenants’ security deposits. This was of course perfectly justifiable in that many unscrupulous landlords used to unfairly withhold deposits, citing non-existent damage to the property etc.


Local Authority Registration

However, things have progressed a lot from the Tenancy Deposit legislation. Many local authorities have for some time been forcing landlords to register with them. This is ostensibly to ensure that only ‘fit’ persons are allowed to be landlords and to ensure that adequate standards of repair are maintained. But really it’s mainly just another way for local authorities to grab a piece of the buy to let pie because there is alway a fee for this ‘service’.

Bank of England

The Bank of England has been clamping down on self-certified mortgages for buy to let landlords. Sensible stuff following the 2008 Credit Crunch you may rightly say, but it’s just one more thing…And don’t forget that this control on mortgages has no effect at all on very rich landlords and companies who don’t need mortgages.

Assured Shorthold Tenancies and Deregulation Act 2015

But the really onerous legislation was introduced this year, by The ‘Conservative Party’, with the Assured Shorthold Tenancies and Deregulation Act, a mouthful in more ways than one, which came into effect on October 1st.

Principal provisions of this Act are, for Tenancies that start on or after October 1st 2015:

• Landlords must supply a Gas appliance safety certificate
• Landlords must fit prescribed CO and Smoke Alarms in a prescribed way
• Landlords must supply a valid EPC (Energy Performance Certificate) – who the hell reads these!
• Tenants must be supplied with a copy of the Government booklet called ‘How To Rent’
• Additionally, landlords can only serve a Section 21 Eviction Notice after 4 months of the first tenancy
• The Section 21 must be in the new ‘prescribed’ form.
• There will be a six month limit to any Section 21 notice after service.
• If there is any outstanding local authority health and safety improvement notice, no Section 21 notice may be served for at least 6 months.

The judges join in

Recently, I read about a case on Tessa Shepperson’s excellent Landlord Law Blog. It detailed how a judge had decided that a tenant who has suffered a fall or similar in the communal parts of a block of flats has the absolute right to claim off the landlord – unless the landlord can show that he or she had ‘recently’ inspected the property and officially raised the matter with the block Management Company. This is even if the tenant HAD NOT REPORTED THE DEFECT TO THE LANDLORD! So, the implications of this idiot ruling would mean that a landlord would be required to check the property at least once a week – not too easy if the landlord lives abroad or a long way from the property.  And so it goes on…

Now, let’s also remember that all this landlord legislation has been introduced by a CONSERVATIVE government. And most of the anti-landlord rhetoric has been conducted partly during the time of the Coalition and also since the last election – by the CONSERVATIVES themselves.

Abolition of Mortgage Tax Relief for Buy To Let Mortgages

Finally, we come to Osborne’s piece de resistance – the gradual abolition of mortgage tax relief for buy to let landlords – fully effective by 2020. Brought in supposedly to ‘help first-time buyers’. But again the only landlords it’ll really hurt are heavily leveraged ones. The rich landlords or companies with 100s of properties and companies with access to masses of cash will not really be affected at all.


So the big question is WHY? Never mind the self-righteous cant about protecting helpless tenants or ‘looking after first time buyers’ – a group that’s patronised almost as much by politicians as ‘Hard Working Families’. I believe that it’s because The City of London has its greedy eyes set on the residential property market in most parts of England. What they can’t stand is that people with any spare capital rightly prefer to invest their cash direct into property rather than get ripped off by investment vehicles with their outrageous fund management charges. You will probably soon start to hear calls for ‘more responsible landlords’, ‘stable landlords’ and so on.

They are waiting for all the small-time landlords, driven out of business by Osborne’s iniquitous tax reforms to come to them and invest in rip-off Residential Investment Funds, where instead of getting up to 8% on their investment, people will end up with say 3% or so – and we know where the rest will go!

What’s more, many people have been fooled by Osborne’s new tax reforms, thinking that they are well intentioned and being pleased that they will hurt those ‘bloody awful landlords who are making life hell for tenants’. But, after all the changes I believe nothing will change for tenants. It is the iron Law of Supply and Demand, with too many people chasing too few properties, mainly because of uncontrolled immigration into an already overcrowded country.

Stop the demonisation!

I would urge all landlords to write to their MPs and protest at this so-called reform of the tax structure affecting buy-to-let mortgages. And although a small minority of landlords are indeed terrible and need to be tackled, let’s stop this continuing demonization of all private residential landlords. Many are simply ordinary folk who, finding they can only get 1% on their savings in the bank or ripped off by fund managers and their investment vehicles, decided to do the only thing they can – invest in buy to let.


Landlords and Letting – Insurance to protect landlords