Spring Budget 2017
The Government will publish it's Spring Budget on Wednesday 8th March 2017. The Spring Budget will set out the government's plans for the economy with the latest forecasts from the Office for Budget Responsibility. This will be the last spring budget, with future budgets to be announced in the autumn followed by a spring statement.
Over the past few years, the previous budgets have announced significant changes to the Private Rented Sector (PRS), with changes to Mortgage Interest Relief to hit landlords hard from April 2017.
All the evidence shows that the demand for homes in the PRS will continue to increase, due to a combination of continued difficulties for many in raising the deposit needed for a home of their own, and, a preference for the flexibility that the sector provides.
The government has encouraged greater institutional investment in the private rented sector but evidence shows that this is not achieving the desired results. We believe the government needs to support smaller landlords, to encourage them to invest in the new rental properties needed and, thereby, support local house builders.
The 7 RLA Budget Proposals
We believe if the government acts to support landlords and the wider private rented sector this will help make renting better for all. We believe this can be achieved through the following 7 key policy changes:
The RLA believes the government should follow the example of Ireland and scrap the planned changes to mortgage interest relief, or at the very least, apply this only to new borrowing for new purchases in the sector.
We believe the government should abolish the new three percentage point stamp duty levy. However, the government has predicted an extra £3.1 billion in additional revenue through this change and the government has insisted that they will not change this policy. Therefore, we are pushing for the government to not apply the three percentage point stamp duty levy on properties that add to the overall net supply of housing.
The RLA believes the government should remove the anomaly that means that VAT can be reclaimed on goods and services in connection with the construction of a new dwelling when it is intended for owner occupation, but not when it is constructed to rent out.
To support the Government's home ownership ambitions, landlords could be encouraged to sell properties to sitting tenants by applying the new 20% rate of Capital Gains Tax in such circumstances. Measures could be put in places to prevent abuse.
The government should encourage local authorities and public bodies, such as the Ministry of Defence and the NHS, to identify and sell off small plots (suitable for up to five units of accommodation) of unused public sector and local authority controlled land for development by the PRS.
Following the decision to end the Green Deal, a review is needed to consider the financial capabilities of landlords to meet the new energy efficiency requirements coming into force in 2018. We believe the government should support landlords to make properties more energy efficient, by making improvements tax deductible.
We are supporting calls made by Crisis for modest funding to improve access to the private rented sector for the homeless.
RLA Budget Submission
To view our full submission to the government, please follow the link below: