Landlords selling up - Rents rising

What has that got to do what I said?

Are you claiming that anyone can plonk a garden room into their back garden and rent it out legally to a student? If not, then your anecdote is irrelevant.

Your second part does not change the fact that delays/blocking of housing helps current landlords. Reasoning who does it, or why they do it, not change the fact that they do it.

So if you do the DIY, bill yourself 200 quid, deduct that as an expense from the rental income, do you then submit a tax return for the extra 200 you earned from your DIY nixer and pay tax on it there instead?

1) You appear to acknowledge the State's policies, failures and mistakes which have caused a shortage in the housing market. This disfunction in turn has greatly benefited landlords who can command higher rent for their properties. Lets assume that you are aware - as per the thread title - that rents are rising and that they are higher now than they were, say, 5 years ago.

2) State policies have led to a situation where private individuals are competing against the State - with it's relatively unlimited resources - for that scare private accommodation. Rent supplement and similar payments place a floor under which landlords will not rent to a private individuals. These payments are benchmarked against the "market rates" which they help to inflate, causing a vicious cycle for those without unlimited pockets trying to compete with the State. Result is higher rent and more money for landlords.

3) Then you moan about the State making interventions in that market to limit the upwards movement of prices.

Then when it is pointed out to you that you can't reasonably complain about the principle of State intervention without conceding that landlords have greatly benefited from State actions, you don't seem to have the ability to join the dots. It appears that you can understand each point in isolation, but don't have the ability to understand them together at the same time.

Regarding your concept of a "loss", it's the same broad principal as putting 500 a month into a regular savings account that matures in 10 years. You aren't allowed to claim income tax back on that either. Like your house, it's a monthly negative cashflow with a balloon payment at the end.

For your example to be consistent, hypothetically allowing capital cost to be written off like that would reduce your cost base of the asset to zero. In other words, buy your house for 500k today, pay it off and write off the interest and principal repayments over the next 20 years, then whatever you sell it for at the end, you pay tax on the entire amount. Not the difference over 500k. If you sell it for 1m then you pay tax on that 1m. If house prices crash and you sell it for 250k, you'd still have to pay tax on that 250k even though it would be, in your own mind, a loss.

This is the way it works in regular business. If I buy a capital asset such as a new piece of machinery for e.g 200k I can depreciate it over around 7 years. Roughly speaking, I write off 30k a year from my othewise "profit" during that time. At the end of the 7 years it's book value is now zero. If I later dispose of that asset for say 100k, then that 100k is now profit/income. If I dispose of it for 300k then that 300k is now profit. Either way I will pay the applicable tax at that point in time.