Finance Bill

Written evidence submitted by Ben Hardaker (FB 64)

Written evidence in relation to the proposed finance bill

1. My name is Ben Hardaker and I am the owner of a portfolio of seven, Two and three bedroom properties currently being let to tenants on social housing benefits in the Flintshire area of North Wales. In response to the proposed bill to cut tax relief to private landlords I am submitting evidence on how I think the new bill will affect both landlords and vulnerable tenants. I myself grew up as a child that was dependant on the benefit system as my father was disabled and unable to work. I personally feel that I have a sympathetic connection with my tenants and responsibility to help house the most vulnerable people in my community as I know all too well what it is like for people on low incomes particularly that live in deprived areas where industry is not as it should be. This is why that for almost four years I along with other landlords have been working with North East Wales Homes Ltd, A new council owned company designed to entice private landlords to house DSS tenants. All of my current tenants are receiving benefits from the DSS and I am not receiving direct payments. Although there is some rouge landlord’s I think it is unfair that the media and sometimes government has painted a picture of all private landlords to be a commercial predatory force within society. I left school at sixteen and joined the British Armies Parachute Regiment. I served nine years and completed operations in both Iraq and Afghanistan to then be employed within the Oil and Gas industry as a security advisor. I realised I have an opportunity to cement myself and my family a better future by making investments with the capital I earn before returning to the UK where I have no practical skills for employment other than minimum wage security guard jobs. Therefore my circumstances are a far cry from the picture painted today of millionaire landlords that pray on vulnerable low income tenants that they have no understanding or relation too.

2. I foresee that the outcome of the proposed bill will have a detrimental effect to vulnerable DSS tenants as well as landlords due to simple economics, Supply and demand. As we know there is a housing crisis due to the limited amount of property and increasing population. Although Mr Osbourne has stated the reform will help first time buyers to get on the housing ladder before landlords buy all the affordable homes, I believe this is not completely true. In my opinion most landlords invest in areas where houses are not only cheap but there is also a higher demand for rent as this increases the yield percentage that will make their investment’s safe. I believe that the reason the property values are low whilst maintaining a high rental demand is because due to wages and job availability in these areas local people can’t afford the deposit required to attain a mortgage. Therefore if landlords didn’t buy these properties the middle class would move into these areas eventually forcing out the working class leaving them nowhere to go. Landlords achieve the returns they need by investing in the most run down sometimes un-inhabitable properties that are a lower value and then invest more money to bring them back to a decent standard thus turning what was a boarded up empty house in a lot of cases into a home. Mr Osbourne also stated that the current mortgage interest relief for landlords is unfair as it is not allowed for normal home owners. I believe that statement is a poorly researched point of view as obviously landlords are also people that require a house to live in and the residential mortgage interest on their personal residence is also not tax deductible just like everyone else’s. Interestingly the proposed changes do not affect the rich who buy their investment properties for cash, Maybe this should be looked at instead.

3. In conclusion I foresee that landlords like myself are currently helping society during the housing crisis by providing housing for the most vulnerable low income people in the community with housing that would otherwise be left in disrepair. The government is not currently providing housing and this has been left to landlords and building companies working for profit to fill the gap that has been created by recent economic difficulties. If the new tax proposals are enforced simple supply and demand principles have shown us in the past that rents will go up to combat these changes to the free market, The result will be that already vulnerable tenants will have to make way for middle class tenants or struggle to make payments. Some landlords with lower yields to avoid bankruptcy will simply transfer their properties into a limited liability company entity to further protect their own homes and avoid the new changes and will then match their rents to the new inflated rental values caused by the bill. The proposed bill may help some middle class first time home buyers but only to the detriment of our poorest working class families. I believe the only way to avoid this outcome is to scrap the proposed bill and source taxes from other areas to build government owned social housing to relieve pressures on vulnerable tenants or relax planning laws to allow private builders to create more houses for the middle class to buy. Landlords like myself have stepped up to the mark to take over what was once the government responsibility to the working class whilst rightly taking a small return as any business does for their creation of a product or service.

September 2015

Prepared 14th October 2015