There appears no change in government policy on changing buy to let tax breaks - at least not yet - despite a successful protest rally held in London yesterday.
Thousands of landlords and others seeking a possible judicial review of George Osborne’s changes to mortgage tax relief for buy to let investors, gathered in central London at a rally organised by Steve Bolton and Chris Cooper, the two landlords mounting the challenge.
"So many landlords are sleepwalking into disaster" Cooper warned the attendees.
Bolton and Cooper say section 24 of the Finance (No. 2) Act 2015 includes the proposed restriction of mortgage interest tax relief at a basic rate, even for higher rate-paying landlords, and regard this as an infringement on buy to let investors’ rights.
The rally yesterday heard that the National Landlords Association would donate £10,000 to support the judicial review if it went ahead.
NLA chief executive Richard Lambert told protestors that “we have yet to see an argument which would convince us to change our mind about the judicial review’s chances of success - but we have to recognise that there is always the possibility that we may be wrong.”
However, despite some signs of backbench Conservative unease at the measures, there is no sign of a government U-turn before any legal challenge.
There is no firm date yet for a decision on whether a judicial review can go ahead: if it gets the green light, it is likely to take place in the late autumn or winter.
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We were lead sponsors of the Wirral Council Private Landlords Forum yesterday, where we had around 100 local landlords gather to hear speakers talking on a range of subjects effecting the PRS. I spoke about Section 24 as I felt there was still a lack of knowledge or understanding of the implications of this appalling legislation on landlords.
My estimate was that about 20% of landlords in the room had not even heard of S24 and a further 40% were unaware of the implications for their business. People who read these type of blogs, us property nerds, have been discussing this for over 12 months. However, despite the great work of Steve and Chris et al the message has not filtered down to smaller scale landlords, particularly those who self manage.
Most striking of all was the sense of unfairness of the plans. The very rich (supposedly those targeted by the measure), companies and RSL's are unaffected. The middle earning investors who planned for their future now find these plans in ruins through no fault of their own.
After the budget all the discussion was on the change to SDLT and S24 seemed to get lost in the background. There is the referendum later this month and it is rightly dominating the airwaves and no doubt will do for months afterwards. Getting the mainstream press to discuss anything else at the moment is very difficult.
I am sorry to say that I think the NLA are correct in their assessment of the chances of a judicial review. However, I believe Chris and Steve are right to try and push the matter more to the fore of landlords minds. The more publicity the better.
If we are to get any change it has to be by working together to influence politicians (particularly Conservative ones - if only because the next election is planned for after implementation of S24). The Government is not listening so I suggest targeting specific MP's (and Councillors) in their constituencies. Let them feel the anger this generates. Make sure they are aware of the damage this will do to individuals and businesses, often built up over many years. Explain to them in person how this will not achieve the intended results for the housing market. Tell them you will have to raise rents to offset the obvious losses.
I don't suggest we take to the streets (we are not the French, after all). However, The Conservatives championed localism as an ideal. Organise locally and show our politicians the strength of feeling about this.
Lets all support the judicial review process. But also start agitating for change at the local level. There are enough private landlords out there who can flex their political muscle if we act together. Agencies like the NLA, ARLA etc. can then play a vital role in bringing the diverse groups together to try and stop this before it destroys the plans and dreams of many ordinary men and women.
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