For some people, (teachers and dare I say Tube staff) the summer months are a time of winding down at work, quiet relaxation and holidays with family and/or friends. For the policy team at the NLA however, the last few months have been very eventful.
What are we playing at?
No we haven’t been gripped by Corbyn fever (we will save debates about rent controls and renters having a right to buy for another time) but instead inundated with new government policies on the PRS and correspondence from members asking what the NLA ‘is playing at’ and what we intend to do about the Chancellor’s tax bombshell.
We always welcome interaction with members, and we plan to use many of the examples of the impact on their personal finances they have sent us in our representations to the Treasury. However we might not take up some of the more radical suggestions of lobbying tactics, my favourite of which was that the UK’s leading membership organisation for landlords should never speak to the Government again on any issue concerning landlords until they capitulate.
That is because as well as the fallout from the Budget in the last few weeks we have had announcements on Right to Rent immigration checks, the consultation to replace the Wear and Tear Allowance, and a consultation (sorry, technical discussion paper – which just means we have less time to respond) from the DCLG on ‘Tackling Rogue Landlords and Improving the PRS’. All this from the party we criticised before the election for forgetting to mention the PRS at all in their manifesto.
We saw it coming
Members might be interested in our correspondence with the Treasury. We wrote to the Chancellor before and after the Budget, and the content of the response, from David Gauke MP, isn’t encouraging. In fact, the Minister at one point worryingly seems to think we should be pleased with the Budget in that they didn’t abolish mortgage interest tax relief all-together.
As well as displaying (what we hope is just) a poor sense of humour, he also shows a worrying lack of understanding of the PRS. Firstly he says that: “The Government does not expect this to have a large impact on either house prices or rent levels…”
Err…how do you think landlords are going to afford this massive tax hike? As with any other business, they will absorb what they can, but they will have no choice but to raise more revenue from their customers to cover the shortfall, i.e. raise rents.
The Minister then says that, “Only around 1 in 5 (18 per cent) of individual landlords are expected to pay more taxes.”
What the Minister does not mention is that:
- A large proportion of those 18 per cent are likely to own more than one property, hence face a massive tax hike.
- This move will take more landlords into the higher tax bracket.
The NLA agrees with the Minister that there should be a fair tax system. To that end we think that landlords should be treated on the same footing as comparable businesses and only be taxed on their profit, rather than the costs they incur as a result of making it their business to provide homes for people in the middle of a housing crisis.
Not shouting from the rooftops
We recognise that the loss of tax relief is a very important issue for members, and one that goes straight to the very viability of their business. Notwithstanding the other policy initiatives, it has been the major focus of the policy team for the past six weeks, and will continue to be. There is a lot going on, but unlike some other campaign organisations, the NLA finds it is often counterproductive to give a running commentary of our lobbying efforts.
The NLA is of course meeting both HMRC and Treasury officials to make clear our opposition to the restricting of finance cost reliefs and talk through the ramifications of the policy as it stands, and to mitigate its effects on landlords. This is an NLA briefing paper we provided the Treasury ahead of our meeting.
We have also met with mortgage lenders about its effects on their stress testing and borrowing restrictions, and set up meetings with prominent MPs when the Commons comes back from Recess.
We will, as ever, keep members advised (that is if we haven’t been successful in applying to be a teacher / tube driver).
 Legal disclaimer: that was a joke – teachers and Tube staff both have very demanding jobs and deserve their holidays / rights in the workplace.