Private landlords gain £26.7bn from UK taxpayer, says campaign group

cepheus

Generation Rent says private landlords benefit from subsidies worth the equivalent of £1,000 for every household in the country

The call came as the Labour MP Frank Field said there should be an immediate review of public spending on housing, to increase building and reduce the UK’s housing benefit bill. “Instead of building more homes, taxpayers’ money is used to push up housing asset prices,”

Generation Rent calculated that landlords, who house 4.75m households in the UK, are earning £77.7bn a year: £42.3bn in rent and £35.4bn in rising house prices. Through income tax on rent and capital gains tax on sold properties, it estimated they were handing £8.9bn to the taxman.

The campaign is calling for an additional landlord levy of 22% on rental income, which it said would recoup the £9.3bn housing benefit bill and should be used to fund 90,000 new council houses.

I'm sure many will disagree, but this 'money for nothing culture' is simply outrageous, especially when it serves to undermine the rest of the economy. With more money flooding in via flexible drawdowns, which could easily be reinvested in the property sector, surely the situation is going to get worse?

jjlandlord

People don't have to listen or pay attention to every loonies in the country.

Their figure is made up and does not correspond to anything.

The group’s figure is made up of £9.3bn of housing benefit paid on behalf of low-income tenants, £1.69bn through the “wear-and-tear” tax relief landlords can claim on their properties, £6.63bn of tax that landlords do not have to pay on mortgage interest payments and £9.06bn of tax landlords do not pay on their annual average capital gains.

Assuming that these numbers are not 'estimates' plugged out of thin air:

Housing benefit is paid to tenants. If they think that this is costing too much why don't they propose to abolish HB?
If they suggest that the money be used to build social housing it would still be paid by the taxpayer.

The rest are just the standard expenses that any and all businesses in the country are allowed to offset their taxable profit with.

Are people that gullible?

antrobus

jjlandlord wrote: »

....Are people that gullible?

Yes.

(S10CL)

Graham_Devon

Was discussed on 5 live earlier.

The concensus from landlords was that they would increase the rent by around 30% to cover any such increases in taxation.

The government would have to fund this increase through benefits, otherwise they would have thousands of people suddenly homeless to re-home.

Infact, rent contorls were discussed to...and again, it would appear the first answer would be for landlords to increase rents to cover any loss in profits. The answer, for everything, it seems, is to simply increase the rents....and it really did appear that incredibly simple.

The overarching point was "meddle with the system to take anything back, and we'll pass the costs onto those you are trying to protect...therefore, don't mess".

Just shows, protection really is needed if this is the mindset. (Not saying it's the mindset of all landlords).

Thrugelmir

cepheus wrote: »

I'm sure many will disagree, but this 'money for nothing culture' is simply outrageous, especially when it serves to undermine the rest of the economy. With more money flooding in via flexible drawdowns, which could easily be reinvested in the property sector, surely the situation is going to get worse?

Who created the culture of dependency on the State?

jjlandlord

Graham_Devon wrote: »

Infact, rent contorls were discussed to...and again, it would appear the first answer would be for landlords to increase rents to cover any loss in profits. The answer, for everything, it seems, is to simply increase the rents....and it really did appear that incredibly simple.

Even leaving that aspect aside, rent controls does not help people find a home to rent, it just encourages people not to move once they have managed to get one.

Because, of course, the issue is that demand exceeds supply.
If anything, rent controls actually increase demand and reduce supply!

Graham_Devon wrote: »

Just shows, protection really is needed if this is the mindset.

How come?
This is the mindset of all businesses: They will try to pass on their costs to their customers as much as possible because they are commercial businesses, not charities.

Anyone running a business would do the same.

If you want to prevent this you must increase competition, which here means boosting supply, ie. the exact contrary of what is proposed with rent controls, etc.

If they want to help people they should understand how economics works first instead of dreaming up policies based on ideology.

Graham_Devon

jjlandlord wrote: »

How come?
This is the mindset of all businesses: They will try to pass on their costs to their customers as much as possible because they are commercial businesses, not charities.

So Tesco's has the mindset of "jack up prices, it's OK, if people can't eat, it will be up to the government to give them vouchers to spend in Tesco".

The overarching point was that they can jack up the rents to cover their increased costs. The government will then have a problem on their hands....evicted tenants as they can no longer pay the rent.

The government will then have to home them....they can't, they don't have the houses to do so, so it will be back to the private sector.

CLAPTON

Graham_Devon wrote: »

So Tesco's has the mindset of "jack up prices, it's OK, if people can't eat, it will be up to the government to give them vouchers to spend in Tesco".

The overarching point was that they can jack up the rents to cover their increased costs. The government will then have a problem on their hands....evicted tenants as they can no longer pay the rent.

The government will then have to home them....they can't, they don't have the houses to do so, so it will be back to the private sector.

yes, if supermarkets knew that the government would be stupid enough to give vouchers for food then supermarkets could indeed allow prices to rise rather than have to reduce prices to improve sales.

that is why most government intervention, however, well intentioned, usually acts to the detriment of all.

compare food prices today without socialist intervention
with rents with massive and rising state intervention.

jjlandlord

Graham_Devon wrote: »

So Tesco's has the mindset of "jack up prices, it's OK, if people can't eat, it will be up to the government to give them vouchers to spend in Tesco".

Tesco's business model is to compete on price by squeezing costs and offering generic products.

A landlord could adopt the same business model but I already foresee the critics...

In any case, Tesco would always sell so that they make a profit overall, or go out of business. If people could no longer eat because of that it would indeed be up to the government to step in one way or another because the whole country would be facing WWIII or something...

Graham_Devon wrote: »

The overarching point was that they can jack up the rents to cover their increased costs.

I covered that in my previous post: It is a supply issue.

Loughton_Monkey

Thrugelmir wrote: »

Who created the culture of dependency on the State?

Karl Marx?

The current situation is, I agree, very dire.

As some posters have already pointed out, squeezing the landlord (however you do it) will achieve only two things. 1. It will put severe upward pressure on rents until significantly more houses are built. 2. With the result that the taxpayer ultimately pays a lot more to subsidise the huge numbers who enjoy 'free rent'. As an adjunct, it will also financially 'rape' those who are relatively rich and who currently choose to rent at their own cost - possibly dragging many more people into the dependency net.

Remember, too, that mortgage rates can only go up. When that happens, it will add to the same problems.

It is a function of today's "Nanny State" that any other practical method of solving the crisis would be considered unacceptable. For example, any concept of chucking up 500,000 or more homes quickly (like pre-fabs after the war) and/or cheap high-rise would be quickly criticised as 'creating ghettos' or 'kicking the poor into slums'. Other concepts, such as a 4 year 'wait' for EEC migrants to be eligible for UK benefits would be considered 'racist'.

As would the concept (used by many countries) of virtually stopping [non EEC] immigration in favour of the more logical system of allowing as many people as possible to come here to work, but only by granting a work permit and matching residence permit (renewable annually), rendering these people as legitimate workers, but without any concept whatsoever of enjoying UK benefits such as free education, free health, unemployment benefit, tax credits, housing benefit or any other 'welfare'.

When I worked in USA, Korea, China, Taiwan, I would have been laughed out of court had I requested a passport, let alone any free health, education for kids, or benefits of any kind. But they want their tax!

CLAPTON

Graham_Devon wrote: »

Was discussed on 5 live earlier.

The concensus from landlords was that they would increase the rent by around 30% to cover any such increases in taxation.

The government would have to fund this increase through benefits, otherwise they would have thousands of people suddenly homeless to re-home.

Infact, rent contorls were discussed to...and again, it would appear the first answer would be for landlords to increase rents to cover any loss in profits. The answer, for everything, it seems, is to simply increase the rents....and it really did appear that incredibly simple.

The overarching point was "meddle with the system to take anything back, and we'll pass the costs onto those you are trying to protect...therefore, don't mess".

Just shows, protection really is needed if this is the mindset. (Not saying it's the mindset of all landlords).

the landlords are wrong ; they would not be able to increase rents by 30% (if they could why haven't they done that already and made much more profit).

what would happen is that some people will refuse to pay and accept lower standards of housing.

landlords would find they couldn't let so would have to reduce their prices.

of course rents would increase if an insane HB system paid more rent

one of the major problems is housing benefit, as it isn't related to what people are prepared to pay but what an insane, economically illiterate state is willing to pay; sadly supported by all sorts of well intentioned idiots.