Say "No" To George

The tax change on mortgage interest relief will undoubtedly force rents up, making it more attractive for some tenants to buy their own homes. More demand for your house could mean that it will rise in value, but hold on….. people that can buy a house will probably already be doing so.

The current high values of property combined with the Mortgage Market Review make it very difficult for someone to obtain a mortgage now, let alone if prices rise. If the individuals are currently tenants, the higher rents they will be paying make it more difficult for them to save for a deposit.

It must also be mentioned that many tenants do not want the responsibility of home ownership or like the flexibility of being mobile and not geographically tied. There are also many immigrants in the country that can’t buy a house because they do not have a credit record, or indeed plan to move areas or return to their home country at some point.

As a result we don’t think that there will be an uplift in house values.

It is probable that Landlords won't all sell off large numbers of houses at one time so we think that house prices won't drop significantly. If they do dip then the house builders will scale back and this will help support values.

However there may be regional differences and in some areas there could well be appreciably higher than average numbers of properties going on the market. This is likely to be where there are lots of tenanted houses or where it isn't possible to raise rents. It could of course have a negative impact on prices in these areas.

For some Landlords it will not be possible to sell as they will need to pay Capital Gains Tax and penalties for escaping mortgages early. They will have to wait for their properties to be repossessed as they fall into arrears. This could happen in any area.

Nobody can really be sure how far prices may fall, if they fall at all, as there are lots of other factors to take into account, but if they fall enough then the builders will cease altogether.

In the UK we have an annual shortfall of 100,000 new build houses which will then increase, which is very bad for the economy, very bad for people that want to buy a home and very bad for future generations that will struggle to get on the housing ladder.

If you think that we’re right in what we’ve said and want to stop the proposed tax change on mortgage interest relief please write to your local MP to ask him/her to support you.