Neil O’Brien MP Has Plans for More Landlord Taxes and Mortgage Hikes

David Lawrenson of LettingFocus is astounded that the government may want to inflict yet more taxes and higher mortgages rates on landlords.

Neil O’ Brien MP HAS Plans for More Landlord Taxes and Higher Mortgages

If you have been reading about how the Queen, Lewis Hamilton and Apple Corporation among many others use offshore tax havens to avoid paying tax, you’ll be quite fed up with how you have to pay  any tax at all, as these other folks don’t seem to be troubled by HMRC, safely in their tax havens.

And you’d have thought that the Conservative government had tortured ordinary landlords enough with a slew of increased taxes in the last three years, but alas and incredibly, it seems they have not.

We have seen three big and separate changes that have decimated landlords’ earnings. In case you have been asleep for the last couple of  years these were:

  • The move to charge us tax on our net income instead of profits. No longer can we deduct the interest cost of loans against our rental income, in future we will just get a tax credit equal to the basic rate of tax. This had the effect of bumping hundreds of thousands of landlords who were previously basic rate income tax payers into the higher rate of tax – a huge rise in their tax bills. The main get-out option is to convert your investments into a company structure, but this comes with huge capital gains tax and stamp duty consequences for existing owners, thus rendering it a non-option for many current landlords.


  • A special premium stamp duty tax rate of an additional 3 per cent on property purchases for buy to let (second properties) on top of the ordinary rate.


  • A special capital gains tax rate. The standard rate of CGT is 10 per cent for basic rate income taxpayers while for higher rate and top rate income taxpayers it is 18 per cent. Landlords, however, pay a much higher 18 per cent if they are basic income rate taxpayers or 28 per cent if they are higher or top rate income taxpayers.

Buy to Let Landlords Are Getting Out

The early scraps of evidence from the last 12 months is that all these taxes have hugely reversed the level of investment in buy to let.

Partly this is the function of the tax hikes and partly the tougher lending environment. But also, Brexit is doing damage too leading to the flow of migrants from the EU to the UK to go into reverse. They can now earn more if they go back home where the Polish and other central and eastern European economies are in a much stronger state than the UK, with its falling currency and uncertain future outside the EU.

The rush to beat the stamp duty tax deadline introductions initially led to a hike in investment in the months leading up to April 2016, but that is becoming a distant memory now.

But incredibly, one Neil O’Brien MP, who funnily enough, was previously an adviser to landlord nemesis, George Osborne in the Treasury, is now calling for curbs in the market for second homes that would extend to buy to let. The idea, reported in The Times on 4th November, is getting traction in a government running scared of Jeremy Corbyn.

Part of the plan would involve getting the Bank of England to make buy to let home loans even harder to get by tightening eligibility criteria and hiking interest rates.

Mr. O’Brien is also calling for more “tax breaks for young families” partly to be paid for, it seems, by hiking capital gains tax on landlords even further and  whacking them with even higher taxes on rental income and stamp duty land tax.

See article link to The Times here:

Landlords Are Groaning

After the tax s**t storm that landlords have been through in recent years, I can’t believe I am reading this.

Landlords will groan at mortgage plans because they know that the eligibility rules for mortgages have already been tightened a great deal, making getting financing very hard these days. The special stress tests applied by mortgage lenders makes it especially hard to get larger higher loans to value mortgages.

Plus now, there are new underwriting rules for “portfolio landlords” which have led to a reduction in the number of lenders still playing in this end of the market, thus allowing the few existing lenders left to take advantage of less competition to hike interest rates and mortgage fees  higher.

For more on this see our blogs here:

…..and here:

And as to the proposals for yet more taxes, surely after all the recent tax rises we have already had to digest, hasn’t the buy to let landlords already suffered enough? I am simply astounded.

The fact is that the Tories are frankly terrified of the rise of Labour. the blue corner has at long last finally recognized that housing is a big issue for the young and have decided that one solution is to cripple buy to let landlords.

This is madness.

Their objective ought to be to look at ways of getting more houses built in areas that need them – mainly London and the commuter owns around it – and build the right type of houses too.

There are many things that they could do, but many of the sensible policies would involve standing up to vested interest groups like the big housebuilders – and they are reluctant to do this because the power of this group is considerable in terms of a massive lobbying machine and party support.

I hope the buy to let landlords’ representatives at the likes of the RLA and the NLA are doing all they can to counter these daft ideas for more pain to be inflicted on landlords.

If not the private rented sector could collapse. And who will then house people who cannot afford to buy and who cannot get a council house or housing association place?


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