This story was taken from the recent publication by Property 118 titled: “SECTION 24 of the Finance (no.2) Act 2015: “The unjust legislation that will make the UK housing crisis much worse””
The Treasury expectation of a net gain in tax receipts appears to be based on guesswork. A more complex examination of the likely financial impact is necessary.
The Full Report contains a really useful diagram (section 7), showing all possible and likely outcomes of the implementation of Section 24.
The complexity of the impact of s24 has been ignored by Government and it is particularly regrettable that the time-bomb facing councils has not been addressed as councils will be left with huge bills to house people in ‘temporary’ accommodation, with the word ‘temporary’ inevitably becoming a misnomer.
One might say that the Government will be ‘passing the buck,’ as councils have the statutory responsibility to house the homeless, but they will not have the means.
As potential owner-occupiers are often tenants in the PRS, purchasing a property, the Government’s alleged aim behind s24 will also be thwarted, because higher rents will make saving for a deposit that much more difficult (and many other problems thwart owner-occupation that have nothing to do with landlords; mortgage lending criteria, most notably).
You can read the full report here, please share this information