I awoke this morning and was surprised to find myself alive.
The first fingers of daylight crept around the edge of the curtains which, when I opened them, revealed the imminent arrival of the sun in the guise of a large orange smudge above the London skyline.
I marvelled at the burnished dome of St Paul’s and the remarkable existence of the Shard and the invigorating presence of a whole host of other familiar landmarks that I had, quite simply, not expected to see again.
I went and made coffee, delighted to find that the power was still on and that something as routine as making coffee was a joy still allowed to me.
I dressed in clothes I had never expected to wear again, passed neighbours with whom I hadn’t expected to exchange ‘Good mornings’. I bought a croissant from a local shop that by rights should have been obliterated from the landscape and descended into a tube station that, were I to find I had made it through the night, I fully expected to be peopled by a small yet hardy group of fellow post-apocalyptic survivors.
Emerging into the bright sunshine of a spring day that was as surprising as it was welcome, I walked a familiar route to my office, seeing anew the things I had for so long taken for granted. A daffodil here, a tree in the first throes of bloom, a squirrel darting gaily from one side of a quiet street to the other.
My footsteps, loud in the preternatural hush of the early morning, clicked up the steps to my office building and, on passing through the front door, were immediately silenced by soft carpeting as I made my way to my desk and switched on my computer.
It is no exaggeration to say that Ebenezer Scrooge, upon awakening on Christmas Day, could not have been more surprised to find himself alive and clutching his bedpost than I was to find myself sat at my desk on the morning of April 7 2017.
Despite everything, the world had not collapsed into a fiery hell. The Four Horsemen of the Apocalypse had not ridden amok, like malevolent harbingers of death, amongst a sleeping capital. Pestilence had been forsworn, the second coming of Beelzebub postponed and Armageddon averted.
In short, the imposition of new rules on tax on mortgage interest had not brought about the end of the world as we know it.
If all that seems to be something of a frivolous introduction to an article about how landlords will be affected by what is seen as an attack on their margins, you’d be right. To a point. But if you’re also thinking that I haven’t fully understood the ramifications of the Government’s decision to reduce the tax relief available to landlords, you’d be very wrong.
Not only do I understand the ramifications, I have a great deal of sympathy for those of you who are trying to make a living out of a long-term capital investment as a primary source of income and seem to find yourself blocked at every turn. A reduction on mortgage interest tax relief here, increased stamp duty there, greater rigidity in lending criteria around that corner and the threat of your letting agent stiffing you for the fees they can no longer pass to tenants around another.
I can well understand how landlords may feel aggrieved by the relentless onslaught of measures that seem intended only to separate them from an honest profit.
However, the wall of conflicting noise emanating from every corner of the sector isn’t helping, either. On a daily basis over the past month we hear angry shouts from some so-called experts who talk of every landlord bailing out of the lettings game at the same time as other, apparently equally well-qualified sages talk soothingly of confidence among landlords in the future of the sector. Financial wizards say mortgage offers are decreasing on the same day that another of their brethren cite statistics showing a rise in buy-to-let lending. Increases in stamp duty will kill business and then they won’t.
These diametrically-opposed opinions do nothing for the stability of the lettings market but instead serve to further undermine it. If lenders are led to believe there is no confidence within the market itself, what would lead them to demonstrate confidence in it by offering more mortgages? If landlords believe their agent is about to fleece them for the fees they’ve lost, what incentive is there for landlords to stay in the game?
Landlords need now to take a deep breath and look objectively at their business model (because whether you like to think of it as such or not, it is a business) and work out whether they’re running it in the most cost-effective way.
Do you have the right mortgage at the right rate? Are you paying a fair level of management fees (here’s a clue: unless you manage it yourself, you aren’t)? is your property attracting the optimum rent? Is property maintenance work being secured at the lowest possible price for the best possible job?
Moreover, are the people advising you on all of those things the right people, or just the people who’ve always advised you? And if you’re not sure, why not speak to us for some independent, impartial and expert advice and make sure your rental world isn’t about to cave in on you.Back