Hi all!
Still in shock at the impending closure of TMF. I did not realise quite how strongly I felt about that site until now.
Still, life moves on, and well done to those who have set this replacement facility up so quickly and (apparently) so effectively.
Re the tax changes, I think a lot of landlords are unsure that this will actually be enacted. It was very much part of the George Osborne attack on landlords, and now that he has gone, and indeed now that his legacy seems to be getting some fairly critical treatment, I have heard people say that it will be be revoked. I am less sure about that.
Personally, I am unaffected, not least because I incorporated my property business some 10 or so years back, but it does highlight the logical inconsistency between the tax treatment of personal and corporate portfolio holdings.
If the full plan does get phased in, I think it will certainly squeeze out some highly leveraged, higher rate tax payers from the market, particularly those who have recently acquired and therefore do not have a large CGT liability pending.
But will this lead to downward pressure on property prices?
I doubt it. Firstly, if the Private Rental Sector housing stock significantly shrinks, rents are likely to increase due to falling supply, increasing economic viability for new entrants - but those new entrants will probably tend to be those with cash or small mortgages and/or corporate landlords.
There are also other factors, that I haven't seen much discussed, concerning Social Rented Sector which I believe will affect the market substantially.
One of these is the RSL (I am not sure they technically are Registered Social Landlords anymore, but I hope you know who I mean!) reaction to the Welfare Reform and Work Act 2016 - social rent reduction rules which require RSL's to reduce their rents by 1% a year for the next 4 years.
https://www.gov.uk/guidance/welfare-ref ... -reduction following the previous rent freeze. That allied to changes in HCA funding and new RSL borrowing arrangements (neither of which do I pretend to understand properly) are leading several RSL's to state that they do not see themselves building houses for rent in the future. Instead they will focus on being social "builders" rather than social "landlords", and develop property for sale on equity share and discount sale basis.
If that happens, there could be significant shortages of rental property as population continues to rise, and owner occupier share continues to fall away from the brief "peak-ownership" highs. However there is so much tinkering in the housing market, penalising one sub sector and supporting another, I really have no clue how it may all interact. I suspect those in power don't either!