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Stop the mass UK tenant evictions and forced rent increases caused by Section 24

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In April 2017 the government will be implementing a series of swingeing tax changes to the private sector rental market. The changes are so extreme and so far reaching that the government are forcing landlords into a situation in which they have no choice but to do one of two things:

1.             Evict their tenants and sell up.

2.             Increase rents.

THIS IS GUARANTEED AND DEFINITELY GOING TO HAPPEN!

According to recent figures this will mean that around 8.2 million people in England alone will be affected.  Many councils rely on the private rental sector to fill the gap in their own crippling housing shortage. The majority of these houses will disappear in less than two years putting an almost impossible task on the shoulders of local councils to find alternative housing for tenants. Alternative housing does not exist. Expensive B&B and hostels are the alternative if the tenants are lucky but these are already full to bursting. The landlords that do decide to continue will be forced to increase their rents by at least 40% and some by nearly 200%. Putting these houses completely out of reach of local council benefit tenants and making life financially impossible for working tenants.

And with the anticipated increase in EU migrants into the UK before the implementation of Article 50 next year the situation is only going to get worse.

According to industry expert Dr Rosalind Beck  this tax reform will see tenants on housing benefit evicted and placed in ‘temporary’ accommodation whilst many landlords will be bankrupted concluding that  ‘the cost in human misery is incalculable’. 

The government knows this is going to happen. They have been told many times by financial and industry experts of the impact that this policy will have on tenants but their own impact report on this policy did not even mention the impact on tenants.

The Irish government implemented similar taxes in 2009 and then had to reverse their decision once the negative impact on people in rental accommodation became obvious. So the government can see what is coming and are choosing to do nothing.

According to Dame Kate Barker, a government advisor on housing “we are now seeing the real signs of strain in the housing system, so we’re seeing the number of people in bed and breakfast accommodation picking up and we’re starting to see the number of homeless people start to rise”.

Dr Kristian Niemietz, Head of Health & Welfare, Institute of Economic Affairs told the government that these tax changes were ‘a step in the wrong direction’.

Professor Philip Booth is a Professor of Finance, Public Policy and Ethics at St. Mary’s University put it quite clearly when he stated: “Osborne is either being deliberately dishonest or simply does not understand the issue" and "To put it quite bluntly, this is an elementary undergraduate public finance error that should not be made in the Treasury".

The Royal Institute of Chartered Surveyors has recommended that the government reconsider the proposed changes to mortgage relief as a means to halt, and reverse, the exodus of small scale investors leaving the sector.

This is not a desperate attempt by a greedy landlord trying to protect their profits. These tax changes are brutal, unethical  and make absolutely no ethical or financial sense. It has been shown time and time again that these proposed changes will not do what the government are saying they will do. They will not make affordable housing available for first time buyers.  The best way to do that is to ask the mortgage companies to ask for less of a deposit. The specific purpose of this change in tax is to drive the small landlord out of business without any consideration for the consequence to the tenants. We can only speculate as to why that is.

Completely by coincidence and, in no way related, of course, the government is advocating a “Build to Rent” scheme with a number of corporate property development companies (none of whom are affected by this new change in tax rules) and who have all previously communicated their intention to move into the private rental sector (many of whom, coincidentally, are Conservative Party donors). But, according to Dame Barker, (also a Board Member at Taylor Wimpey): “Britain cannot build the 300,000 homes it currently needs to keep up with demand”. So what are the Government going to do with the evicted tenants whose private sector landlords can no longer afford to rent to them? The government, so far, respond by quoting unprovable statistics and repeated untruths about the negative impact of the private sector landlord but they have not addressed the issue of the impending mass homelessness.

This is an humanitarian disaster waiting to happen. The government need to repeal Section 24 and stop the withdrawal of tax relief on the small private sector landlords in order to avoid the mass homelessness and increased rents that this policy is, without doubt, going to create. 

 



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