The chairman of Choices letting agency says the government is wrong to say its proposed tax changes will create a level playing field between buy to let investors and owner occupiers, because the cards are still stacked against landlords.
Simon Shinerock says recent support for the tax changes from financial advisers and Conservative politicians have a hidden agenda.
For example, he says financial advisors make a living selling collective investments, a sector that has lost out to buy to let. “A pension can borrow money and the interest it pays is a fully deductible expense for tax purposes - the same goes for other collective investments. So as an investor, if you put money into a fund that borrows money you don't need to in order to gain the additional buying power with its risks and rewards.”
Shinerock also accused the government of “a similar deceitful theme of sleight of hand” because it is effectively attacking landlords - a generally Conservative-supporting group, he says - in order to appear more ‘middle ground’ and take votes from an increasingly left-leaning Labour party.
“The real crisis is of course a building crisis, we have not built enough homes for our growing population and no amount of fiddling with the balance of power between owners of landlords will make any difference” he warns.
Shinerock also criticises Build To Let, the generic term for institutional investment in purpose-built and managed units for private tenants.
“So far the returns from the [buy to let] sector have been too low to tempt in massive institutional investment, so the plan is to hobble the private landlord, risk the political backlash and at the same time encourage and incentivise institutions to mass build small apartments for the masses” says Shinerock.
“The outcome will be the worst of all worlds. It won't encourage home ownership, it discourages those who want to better themselves and it will leave a generation with nowhere to live apart from unattractive apartments designed by bean counters.”