It’s Back to the Future day for debt-powered landlords like Fergus Wilson
If you wanted to explain Section 24 with GIFs, they would be Biff Tannen and Marty/George McFly GIFs.
Meet bully landlord Fergus Wilson, who grew his buy-to-let ‘empire’ from nothing into 1,000 properties through remortgaging and interest-only debt.
Section 24 stops time inflicting more Fergus Wilsons upon us by withdrawing tax reliefs that allow such debt-fuelled expansion.
Like local blowhard Biff Tannen from Back to the Future, there’s a gang of highly-indebted landlords behind Fergus, but he’s their poster boy.
Section 24 is the switch that puts the overbearing Biff Tannen of Marty McFly’s original 1985 down the pecking order in the improved 1985.
Just when you thought the government, represented below by George McFly, would never stand up against the tax-avoiding bullies, they did.
Sadly, we don’t have time travel, but if Section 24 had been around years ago, we would have a fairer, cheaper, less distorted housing market.
I’m not saying Section 24 makes things all better: when bullies meet their match, they tend to find someone weaker to pick on. So it is with these landlords, who are saying it’s forcing them to raise rents and evict tenants.
But they have known Section 24 was coming since Budget Day 2015.
Section 24 starts to phase in from tomorrow, 6 April 2017, and doesn’t even take full effect until 6 April 2020.
That is nearly two years’ time to prepare and lighten the impact on tenants, by selling up with or without tenants in situ, or cutting their debt, or finding other investors to inject equity or simply pressuring the government to build more housing.
Did the gang do that? No. They fought to stay top dog, to bully their way through and overturn what they have tried to call a ‘tenant tax’. They’re failing and there’s a distinct smell of manure in the air.