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Say no to George before housing crisis

A new website has been launched to fight back against the attack George Osborne made in the Summer Budget on the UK lettings market. 

Two Peterborough landlords have combined forces to create www.saynotogeorge.co.uk and demonstrate the potential effects that the Chancellor’s limitation on mortgage interest relief will have on buy-to-let investors and many others in the country...

UK private landlords provide housing to nearly four million members of the population and generally do a fantastic job with high standards despite increasingly tough legislation. 

Unfortunately in recent years we have been vilified by some charities and the media, who don't understand the work we do and who have presented landlords in an extremely distorted light.

Perhaps as a result of this misinformation, the Chancellor announced in the Budget the astounding news that he was abolishing landlords' rights to offset 100 per cent of finance costs of running our businesses and limiting this to 20 per cent. 

This is unheard of in business and goes against all logic and reasoning. He presented the change in such a misleading way, though, that many landlords have still not realised how devastating this will be for their businesses.

To confuse matters more, the Chancellor has said that he is concerned that BTL investors will destabilise the housing market when they can’t meet mortgage payments due to interest rate rises, but this makes no sense. 

Lenders allow for interest rate rises in affordability calculations when they grant mortgages. 

It is, ironically, this tax change that stands to make landlords' mortgaged property unviable and therefore do exactly what the Chancellor says he wants to avoid.

In addition, he says he wants to ‘level the playing field’ for first-time buyers, and again this change will not help them at all.

It’s not just us saying this; some of the country’s top economists, including the Directors of the Institute of Fiscal Studies and Institute of Economic Affairs have stated that the proposal does not make sense and that only building new housing will help first time buyers.

It seems then that the Chancellor has perceived us as a soft target for topping up the country’s coffers without thinking through the consequences. Say No To George has been created to show what the possible or likely outcomes will be from this tax change. 

I’ve heard people say that rents can’t go any higher and they’re not linked to operating costs, but they are wrong. 

George Osborne has thrown a curved ball in here by abolishing the basic business principle of PROFIT = INCOME – COSTS

With this tax change many landlords will pay a tax rate higher than 100 per cent of their net profit, which is absurd. Where will they find the money to pay these bills? They will have to either increase rents substantially, or if unable to do so, will need to dispose of properties thus evicting tenants. These are the plain facts.

Our campaign is to get this proposal scrapped before it dramatically exacerbates the country’s housing crisis.

Right now we have more people living in B&B accommodation than we have had in years and once again unemployment is on the way up. If this proposal comes into law what we have now will seem like a walk in the park!

We urge everyone to sign the petition and to write to their MPs, Brandon Lewis (the Housing Minister), George Osborne and David Cameron. 

We simply must say NO to George.

*John McKay is a landlord and founder of Peterborough Property Investors Group, also known as PetPIG. He says he will be obliged to increase rents as a direct result of the Budget tax changes as soon as interest rates rise.  

  • Simon Shinerock

    I fully support this campaign, it has been clear for a while that the PRS is now a Government target and would have been in an even worse mess if Labour had won the election.

    On first sight it's ironic that a Tory Governement should mount an attack like this, after all landlords are their core voters and there are a lot of them, so what is really going on?

    Well if you look deeper what you see is a massive housing crisis caused by an exploding population and an inadequate building program. Although David Cameron talks about encouraging the aspiration to home ownership, in reality that ship sailed years ago.

    No, the current dilemma facing Governement is how to quickly build enough homes full stop and just as in the past, short cuts and compromises will be made.

    In this case, institutional build to let is the prize and because of the relatively low returns in the sector, the strategy is to create a unequal playing field that kills off the competition from private landlords while encouraging institutions.

    Cheap money, subsidies, favourable tax treatment will all be on the table for the funds who build in volume and the private Landlord is seen as a necessary casualty.

    So the most effective way to fight back will be to suggest ways private Landlords can be part of the solution and use some of their resources to fund the building of new homes, for a decent return of course.

    It's going to be a tough battle to win, negotiating a fair deal for private landlords will need a lot of support and a persuasive argument but first we need to expose the situation for what it is

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    Thank you Simon. If you care to look at the Property Section of today's Telegraph you will see that the Daily's are waking up to the forthcoming explosion of rising rents and homelessness that will be caused by the Chancellor's proposed tax change.

    http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/11816726/Buy-to-let-tax-My-five-properties-were-my-pension-now-my-tax-bill-will-jump-38pc.html?fb_ref=Default

  • Simon Shinerock

    Thanks Mike, let's see if we can get some real pace into this issue, I will be speaking to everyone I know to lend their support and helping with the campaign where I can.

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    I just cannot believe this. As an elected Conservative councillor, this move has left me feeling sick, bewildered and betrayed. My first property was in Peterborough, and my now full-time occupation has grown substantially over 18 years through hard graft and good service. I now face a bleak future, if not actual bankruptcy then a complete destruction of my business, life and retirement plans.

    I have signed the petition, joined property118's campaign, and as a trainer for the National Landlords Association am backing their superb campaign all the way. This ridiculous and ill-conceived plan is an embarrassment and will negatively impact not just me but my tenants, many of whom have low rents and have been with me in excess of 10 years. How can I evict people I've got such good relationships with? Why would I want to?!

    George has completely missed the point on so many levels. What about those who have the money but don't want to buy? Encouraging home ownership is fine but saying you'll do it by putting existing tenants in danger of huge rent rises or eviction isn't the way to do it!

    We can only hope we can all make enough noise for enough time that this crazy idea gets scrapped, but I doubt it very much - the complete lack of consultation shows how dedicated George is to pushing this through regardless of consequence.

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    I cannot believe what is happening to us landlords. It will Financially squeeze us out. Our properties will remain to be picked up by the the corporate landlords. Well done George you are looking after your chums. And tenants it can be argued will not be looked after as well as Us Smaller landlords. I doubt that with George's plan of raising 702 billion to the coffers as a result of this decision we can change his mind but please please sign the petition perhaps we can dilute the decision somewhat.

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