So, what did today’s budget offer for the PRS landlord? In short there was precious little to get excited about.
Hopes were pinned on an announcement regarding potential tax incentives for landlords willing to offer family-friendly longer tenancies, after Sajid Javid promised more details today.
And while the RLA made significant progress in terms of welfare, the budget offered little in terms of giving our landlords the support they need.
So, what announcements did the chancellor make that are likely to affect you and your lettings business?
Finance and tax
Stamp duty land tax – the government will permanently raise the price at which a property becomes liable for SDLT to £300,000 for first‑time buyers to help young people buy their first home. The relief will not apply for purchases of properties worth over £500,000.
Capital Gains Tax (CGT) payment window – The introduction of the 30-day payment window between a capital gain arising on a residential property and payment will be deferred until April 2020.
Rent-a-room relief – The government will publish a call for evidence to establish how rent-a-room relief is used and ensure it is better targeted at longer-term lettings.
Raising income tax bracket – The personal allowance for income tax will be increased from £11,500 to £11,850 from April 2018, while the threshold at which you pay a higher rate of income tax will rise from £45,000 to £46,350.
Mileage rates for landlords – The government will continue to allow unincorporated landlords the choice to use either the government’s fixed mileage rates or actual vehicle running costs and capital allowances when it comes to calculating deductible motoring expenses.
Supply and rents
Empty homes premium – The government is keen to encourage owners of empty homes to bring their properties back into use. To help achieve this, local authorities will be able to increase the council tax premium from 50% to 100%.
Longer tenancies – The government will consult on the barriers to landlords offering longer, more secure tenancies to those tenants who want them. The RLA called for tax incentives in its budget submission.
Review of build out – The government will set up a review panel to explain the significant gap between housing completions and the amount of land allocated or given planning permission, and make recommendations for closing it.
Register of planning permissions – The government will develop a central register of residential planning permissions from local authorities to improve information on where permissions are held and progress towards them being built
Continued support for support for build to rent – Good news for those wanting flats in city centres – bit delivering little in the way of family housing
Small sites – The government will provide a further £630 million to accelerate the building of homes on small sites. The RLA has campaigned to have such sites brought back into use for the PRS, but welcomes the move, which will help boost housing supply.
New garden towns – The government will bring together public and private capital to build five new garden towns.
Universal Credit – The government will provide more support to Universal Credit claimants – with RLA giving evidence to government on issues surrounding the rollout.
- from January 2018 those who need it, and who have an underlying entitlement to Universal Credit, will be able to access up to a month’s worth of Universal Credit within five days via an interest-free advance.
- The government will extend the period of recovery from six months to twelve months, making it easier for claimants to manage their finances.
- From February 2018, the government will remove the seven-day waiting period so that entitlement to Universal Credit starts on the first day of application
- From April 2018 those already on Housing Benefit will continue to receive their award for the first two weeks of their Universal Credit claim
- The government will also make it easier for claimants to have the housing element of their award paid directly to their landlord
Targeted Affordability Funding – To support Housing Benefit and Universal Credit claimants living in areas where private rents have been rising fastest, the government will increase some Local Housing Allowance rates. This will increase the housing benefit awards of approximately 140,000 claimants in 2018‑19, by an average of £280, in areas where affordability pressures are greatest.
Rent payment data – The government will launch a £2 million competition to support FinTech firms developing innovative solutions that help first‑time buyers ensure their history of meeting rental payments on time is recognised in their credit scores and mortgage applications – a scheme championed by the RLA.
Rough sleeping – The Budget sets out the government’s first steps towards its commitment to halve rough sleeping by 2022, and to eliminate it by 2027.
Housing First pilots – The government will invest £28 million in three Housing First pilots in Manchester, Liverpool and the West Midlands, to support rough sleepers with the most complex needs to turn their lives around.
Full details of the budget can be found in the Red Book.
To see the RLA’s key budget asks click here.