The text of a letter one of our readers has sent to his MP following our article yesterday.

Dear Ed

As a conservative voting member of your constituency (I live in Ardington) I wanted to write to you on a subject that very much concerns me.

Together with my wife we are among the millions of private Landlords in the Country who provide accommodation to the private rental market.

We own 5 flats in Oxford which we have invested in over the past several years and rent out, typically to public sector workers in critical roles at the University or the  JR.

I wanted to bring to your attention just how badly the changes introduced by the Chancellor damage the proposition for private Landlords with a small number of properties.

Here is a short illustration of the “before” and “after” situations once the new regulations have been fully phased in by 2020 for 40% tax payers, which is typical for property investors and landlords in Oxfordshire.  I have used 4% mortgage interest rates as an illustration.  Although current rates are lower than that this is a more realistic medium term rate.

As you can see from the illustration above, this pushes the after tax annual income for a landlord down from £1334 for a typical rental property (like the ones we own) to just £134 which is basically unsustainable.

The tax changes mean that as a Landlord running a small business I am being taxed on my “revenue” not my “income”.  This is totally regressive and against the basic principles of fair taxation.

What is the inevitable outcome of this change?

• Rents will increase disproportionately as Landlords seek to offset their costs
• Landlords will skimp on maintenance and other costs and the quality of accommodation provided will go down
• Many private landlords will get out of the sector
• Reasonable quality affordable housing will become more difficult to access as a result
• There will also be fewer property transactions from BTL buyers (resulting in lower SDLT receipts)

I would really encourage you to lobby Philip Hammond to reverse this poor piece of tax legislation which will impact negatively on both Landlords and tenants.

Regards,

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Thank you to Rob for sharing the text.  I recommend that other readers follow Rob's example and lobby their MP as we suggested yesterday.