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Hammond urged to 'delete all and start again' on buy to let taxes

New Chancellor Phillip Hammond has been urged by an industry trade group to reset the government’s approach to taxing the buy to let sector.

His predecessor George Osborne introduced a raft of controversial tax changes for the sector - notably a three per cent stamp duty surcharge on the purchase of buy to let properties, the phased reduction of mortgage interest tax relief, and changes to the Wear and Tear Allowance - and now the Residential Landlords Association wants a rethink.

The RLA says that these measures are forcing some landlords to sell up and are stifling investment by others, making it more difficult for many people to find suitable housing and will push up rents for those in rented accommodation.

“Access to decent, affordable homes to rent is vital to supporting a flexible labour market, and ensuring that young people and families have a place to live” says Alan Ward, chairman of the Residential Landlords Association.

“Whatever the new government does to support home ownership, demand will continue to increase for homes to rent. The new Chancellor has an important opportunity to reverse recent punitive tax changes and support the majority of landlords who are providing good housing to their tenants to invest in the new homes we need.”

The RLA represents 40,000 private sector residential landlords in England and Wales.

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    Well George Osbourne could not really have gone back on his doing so what an opportunity

  • phil dillon

    And add CGT to that list as well no reason Property should be 10% more than everything else.
    Osborne was a complete fool and he has cocked up the Economy big time. I have no idea what Hammond s credentials are but lets hope he has the balls to undo this ridiculous attack on PLS

  • Brit Sixteen Sixty Four

    Yes landlords may not like the changes but they are extremely popular with a country as a whole and especially first time buyers.

    Just think of the first time buyer perspective. Landlords targeting all the typical first time buyer properties, they have take advantages, more money. Then landlords are bailed out after the credit crunch with record low mortgage rates yet keep on putting up rents despite having lower costs. The priced out first time buyers then spend all their wages on rents and can't afford to save enough for a house deposit.

    I don't often agree with George Osbourne but he was right to curtail the unfair advantage of buy to let after the damage it is doing to society.

  • phil dillon

    Brit you clearly have no grasp of micro economics

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    Brit, it isnt the situation in the north. Get yourself a house for 20k plenty to choose from

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    I think Brit is failing to see the inevitable consequences of the tax changes, maybe intentionally, maybe not. Firstly there is no unfair advantage with BTL as economists repeatedly explain. BTL is taxed higher where an owner occupier is not, the mortgage rates are higher and greater deposits are needed. The list goes on.

    However many, many landlords (myself included) never increase rents on a tenant in situ. This has now changed due to S24 of the 2015 Finance Act. Tenants that have been with me for over 8 years have now had their first rent increase and there will be annual ones all the way through to 2020 and beyond whilst C24 hangs over us.

    When a much milder form of this punitive tax was tried in Ireland rents shot up by 40%. Osborne knew this but didn't care. He is just after the tax and to hell with the poor tenant that will be paying it.

    I recently asked an economist if he could give me a list of products and services that have not increased in price when the tax has increased. His response was that the question was like an exam question for Economist Undergraduates... along the lines of 'Describe a business where the cost of the product or service does not increase when tax is increased'. The answer is a monopoly because such a business would generally charge the maximum it could, i.e it is market led. A normal business is cost led. Well, being a landlord is definitely not a monopoly so rents will go up. They have to. If landlords choose to exit the market it just supports higher rents.

    Then we have the knock-on effect of the impact on house building. Landlords will not put down deposits off plan and that hurts builders cashflows. This in turn means less output and that supports higher house prices.

    I'd suggest that Brit may support Osborne's tax attacks but needs to carefully consider the damage that will result.

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