On the 4th October 2019 at the Property Investor Show, Less Tax 4 Landlords founding director Tony Gimple was joined by Richard Blanco (London Representative,The National Landlords Association), David Cox (ARLA), David Smith (Policy Director, RLA) with the debate hosted by Kate Faulker (BBC TV & Radio personality and Managing Director of Property Checklists). Together they discussed the state of the property market. View on You Tube here.
Each panellist gave their thoughts on the key topics that investors and landlords should consider. Some discussed macro and micro economics, including the impact of Brexit on the property market, whilst others talked about issues such as the abolition of Section 21. There was even a discussion on the pros and cons of Rent to Rent.
The panellists also expressed the view that, given somewhat subdued demand as a consequence of anxiety about Brexit when (and if!) it eventually happens, pent-up demand is building. And, with supply levels in many parts of the UK being so low, this was likely to lead to a market ‘bounce’ in the future for a brief period, although probably not in the longer term.
On tax, Tony Gimple pointed out that 58% of landlords had reported their 2017-8 tax bill was higher than the previous year as a result of S24, with only one in eight consulting a specialist tax adviser for help. It was agreed by all that this was the one area that landlords and investors seek specialist advice as it’s important to get help before future tax changes come into effect.
On the 13th June at the National Landlord Investment Show, Less Tax 4 Landlords founding director Tony Gimple was joined on stage by former Mayor of London, Ken Livingstone; Mortgages for Business MD, Steve Olejnik and Knowledge and Product Editor of the Mail Online’s money section, Sarah Davidson. Together they discussed the Future of the UK Housing Market.
Chaired by BBC politics presenter Andrew Neil, the debate covered a variety of pertinent topics, such as Brexit and tax changes, but house building and the shortage of homes was the topic that dominated most of the debate.
In this video, Andrew Neil asked Tony Gimple the following questions:-
Politics has changed. People come into politics now as a career as opposed to a sense of doing great for the nation. Taxation has become a political issue as opposed to just doing the right thing for the nation. You get exploitation, you get bubbles of population growth, increased immigration and it’s very difficult for politicians of all persuasions to put enough money into what is a basic human resource i.e. somewhere safe, warm and dry and a roof over their head, coupled with that is an anti-private landlord sector. Sometimes planning is too tough, sometimes too easy and we get to a situation now where it’s getting harder and harder to put the right kind of development for the right kind of people on the right kind of land. But at the end of the day it comes down politics swinging every few years between left and right and the pendulum never settling somewhere in the middle and for what is truly the national interest.
Q2) With the failure to continue to build social housing either by the local authorities or the housing associations and the failure of the private sector to build enough homes to buy, this has resulted in one of the most remarkable developments in British housing, that is the rise of the privately rented sector. For most of my life, private rent was in decline, people either rented from the state or they owned their own homes and if they rented it from the state, they may have wanted to own their own home at some stage. They didn’t want to rent privately but as both these sectors have failed to meet the demand, more and more people have been forced to rent privately and so we have a big private rented sector in this country now. Were we ready for that and is it a healthy way forward for the housing sector?
3) It’s easy to beat up on politicians but what should be done that the government aren’t doing?
They should have, not necessarily easier, but definitely more balanced planning rules. It takes forever to get permission. Planners should work in conjunction with developers from the outset saying what CAN be put on a plot of land. It’s then a question of making sure that it’s not so much too easy to borrow money but it’s not too hard either. Some monies, more monies perhaps are put into social housing projects and concentrate on a more national view may help.
4) Mrs Thatcher’s change of rules in 1988 saw the rented sector grow a bit in the 90s but not by that much. The real acceleration of the rental sector has been in this century. This is where we’ve seen the real rise and it’s now more important than the social rented sector in terms of size. As it’s become more important, have we turned against it?
Yes, by the blunt instrument of taxation, the politics of jealousy. not realising just how important the private sector and private landlords are. We’ve got hundreds of clients and out of those, we’re yet to meet a rogue or criminal landlord. We have clients that do everything from halfway house recovering addicts, to high-end properties, to HMO’s and all types of landlords are being hit in every conceivable way. Government and local authorities should be working with the PRS. It can be a partnership for profit. Profit isn’t a dirty word, and every type of organisation even a charity is a business and needs to make more money than it costs to run otherwise you’ll go under very quickly. We should encourage people to buy their own homes and if they are buying an ex council house, then perhaps the easiest way to do it is for the authority to become almost like their commercial partner i.e. they help them build it, help them rent it and maybe take a share of that profit when it’s sold and a certain proportion of the proceeds go back into building the next generation of homes and I believe the right to buy a council home should be based on a real need and not a choice, It’s ridiculous that some people earning over £100k are hogging the council waiting list, that’s not what they’re designed for. if you can support yourself then you should. The PRA should be treating the Private Rented Sector like any other business and not tax it out of existence, which is what’s happening.
Ken Livingstone’s response was, “The Private rented sector is a crucial part of the solution to the housing crisis and the government and councils should be working with landlords, dealing with the bad ones and creating good relationships with all others and giving the landlords a voice to debate the tax issues and the regulation issues. But there doesn’t seem to be any debate going on.”
BBC’s Andrew Neil questions panel of experts (including Iain Duncan Smith MP) on Brexit, Government policy, intervention and the future of the Buy to Let market
On the 21st March at the National Landlord Investment Show, the Rt Hon Iain Duncan Smith MP joined a panel of experts, including Less Tax 4 Landlords founding director Tony Gimple, to discuss Government policy, intervention and the future of the Buy to Let market.
Chaired by BBC politics presenter Andrew Neil, the panel also featured Paul Mahoney (Nova Financial Group) and Sarah Davidson (Knowledge and Product Editor at the Mail Online’s money section, This is Money).
The debate ranged over a wide variety of pertinent topics, such as Brexit and house-building, as well as the obstacles homeowners and landlords currently face.
The three expert panellists were unanimous in voicing optimism for the UK housing market over the next five years, with some of them believing market fundamentals to be strong and supportive, despite apparent political uncertainty in the present.
In this video Tony Gimple was asked the following questions:-
Q1) What impact have you seen the Brexit process have on the property market?
On the BTL business sector actually very little. Nature abhors a vacuum,so whilst demand exceeds supply in the rental sector, those running high quality housing and those who have the ability to recycle capital are continuing to do so. It’s working really well.
Q2) Tax relief cuts, higher stamp duty pressure on margins, is it serious?
It’s only serious if you don’t do anything about it. Over the last 3 years we’ve seen a lot of ‘head in the sand’ attitude. Landlords who are jumping to incorporate are making a huge mistake. Companies get taxed in every conceivable way. Stamp duty is transactional, what comes around goes around, whether it’s window tax, clock tax or shop front tax, it’s nothing new. Section 24, the capping of mortgage interest relief at basic rate, is however starting to have a significant impact. We’re seeing a lot of highly geared less profitable landlords and social landlords who work de facto who are also having to pay taxes in advance, these are the landlords that will be forced out of the market unless they act. Will it have an impact if people do nothing? Absolutely, but it will have a negative impact not only on the people in this room but on the tenants of the people in this room. Where is the money going to come from as a result of having to re-house?
Q3) So what should they do?
Look at what their options are. Are they truly an accidental landlord? If they have one, two or three properties with no intention of growing then maybe in these circumstances they should pay down their mortgages, go for the longer term better quality tenants, maximise the rental yields and maintain the properties so that in these circumstances Section 24 won’t affect them because it only affects mortgage payments. They also need to look at other ways of dealing with inheritance tax. Don’t sell if you can help it. Why on earth would you want to sell an income-producing asset if you’re beyond that point?
If however, you are beyond that point and you’re looking to run this as a proper business, which is exactly what George Osborne’s reforms were allegedly about i.e. professionalising the sector, then they really need to start taking specialist advice and make sure that the people they’re talking to are effectively selling advice that they don’ t already know.
Listen to the full episode for more comments from Tony and the other panellists and to hear why Mr Duncan Smith, former leader of the Conservative party, believes former Chancellor of the Exchequer George Osborne’s economic policies led to “landlords scaling back or even leaving the sector entirely”.
If you missed the debate, you can now watch the full 86 minutes here.
Less Tax 4 Landlords also exhibited at the event, and we were thrilled to meet so many landlords and aspiring property investors on the day. If you connected with us at the event, either at our stand or at one of our Tax Talks, we’ve put together a short article explaining what to expect next.
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