Why was s24 introduced?

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”

When the former Chancellor, George Osborne announced in his Summer Budget speech of July 2015 that he would ‘restrict finance cost tax relief for ‘individual’ landlords,’ it wasn’t clear to most observers what this actually meant.


The method of describing the change was so opaque that only tax experts would have understood it initially. Landlords across the country had no idea what it meant. This was because to fully understand what ‘Section 24, of the Finance (no.2) Act, 2015’ signified, one would need to understand the concept of ‘sophistry.’



The Oxford Dictionary definition: a subtle, tricky, superficially plausible, but generally fallacious method of reasoning.

The Cambridge Dictionary definition: the clever use of arguments that seem true but are really false, in order to deceive people


There are various theories regarding why the Government introduced this punitive tax regime for ‘private’ landlords (corporate landlords are exempt). It really was a bolt from the blue. As no-one outside of the Treasury was party to the discussions, we can only speculate on the motives. These may include:


  •  It’s a tax grab, pure and simple (and landlords are an easy target), and George Osborne was under a self-imposed pressure at the time to eliminate the budget deficit.
  •  It’s to help first time buyers or at least give them the illusion they were being helped (according to this, attacking one group helps another) and also to further favour owner-occupiers in the tax system, as increased owner-occupation levels are a Conservative Party goal (this group has been fiscally favoured for decades).
  •  It’s to eliminate the ‘small-time’ landlord, so that ‘institutions’ can take over the market. This is justified publicly as a move which will improve rental conditions, but institutions also happen to donate to the Conservative Party coffers.


One thing cannot be in doubt, however, and that is that it was a populist move, yet one which landlords were shocked to see a Conservative Government introduce, as it is such a ‘hard-left’ policy.


Logically, it will lead to the effective confiscation of assets in many cases. This is because landlords will be forced to sell at a time not of their choosing, possibly in a falling market and in many parts of the country properties are still in negative equity. It will therefore bankrupt many landlords who will not have the funds to repay the mortgages (they will have planned to keep the properties for many years and would not have priced in having to suddenly sell them because of retroactive legislation).


The groundwork for the measure was laid by anti-landlord organisations such as Shelter and Generation Rent and fuelled by biased media coverage of ‘rogue landlords’ over several years. Because of this it passed through Parliament very smoothly. Indeed the Labour Party did not oppose it, as to do so would have placed them to the right of the Conservatives, politically. It therefore went unchallenged by the Opposition and other parties, with the Labour MP, Siobhain McDonagh, even suggesting that this extreme measure be made more extreme


It is worth mentioning how since then, the Labour Party has continued to attack the sector by distorting the truth. In Jeremy Corbyn’s keynote speech to close the Labour Party conference in Liverpool in September 2016, for example, he accused the Government of ‘subsidising’ private landlords by spending £9 billion of housing benefits in the sector, not mentioning that the total cost to taxpayers for Government social housing had been £15.2 billion. As one landlord commented:


‘The word ‘subsidise’ means to help by giving money, to pay part of the cost of something. It is not landlords who are being subsidised, it is the people who are given the welfare money.

They are being subsidised for not being able to command an income high enough to support their households.

The purpose of the subsidy is to prevent people becoming homeless and having to be housed by councils at greater cost than the private sector rents…

[Corbyn said:]“Instead of spending public money on building council housing, we’re subsidising private landlords.”

This suggests to his gullible audience that a government could stop paying housing benefit and divert the money instead towards building houses.

This is another example of either sophistry or economic illiteracy. Where would the people on housing benefit go once they had been evicted en masse for non-payment of rent? How much would it cost to put them in “temporary” accommodation – which might become permanent?’





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