Today we look at new research from Hamptons, showing the average landlord’s capital gain on a property sale is £78,000. MPs have had questions answered on ongoing protection for vulnerable tenants, the Commons Library has published a paper on Capital Gains Tax and a new official report has found gaps in the government’s support for the economy during the current crisis.
Average capital gain £78k says Hamptons
Hamptons International has published research suggesting that last year more than 150,000 properties were sold by landlords across England and Wales.
It says: “Those landlords who choose to sell in 2019 typically owned their property for 9.1 years and on average sold it for £78,100 more than they paid for it.
“This equates to a gross gain of 42% on their initial investment. And 84% of landlords who sold in England and Wales last year made a pre-tax profit.”
It goes on to say: “Sellers in London and the South East – where house prices are among the highest in the country – made the most in absolute terms.
“The average London landlord made a gross gain of £253,580, over 20 times that of a seller in the North East where the average gain was £11,710. The South East followed, with a £104,930 average gross capital gain.”
In respect of rents on renewed tenancies the research says: “Rents on renewed tenancies in Great Britain fell 1.6% in May 2020, the third consecutive monthly fall.
“London and the South East were the only regions where rents fell annually, down 4.7% and 1.2% year-on-year respectively.
“ Outside London, rents rose 0.9% year-on-year. Scotland recorded the strongest rental growth in May (3.6%), followed by Wales (3.4%) and the North (2.3%).”
To access the research click here.
Work ongoing with legal system while eviction ban in place
Dr Rupa Huq MP (Labour, Ealing Central and Acton) has received a response to her written question asking what representations MHCLG has received from landlord and tenant organisations on a potential extension to the protection given to renters during the covid-19 outbreak.
The Housing Minister, Christopher Pincher MP, said: “We regularly engage with a range of stakeholders on different issues relating to the private and social rented sector.
“On Friday June 5, 2020 the Government announced that the current suspension of evictions from social or private rented accommodation will be extended by two months until 23 August 2020.
“This means that no action to evict a tenant will proceed before 24 August 2020.
“The emergency measures in the Coronavirus Act, which require landlords to give at least three months’ notice to evict tenants, are unaffected by this and remain in place until 30 September 2020.
“We will also continue to work with the judiciary, legal representatives and the advice sector on arrangements, including new rules, to ensure that when the moratorium on evictions ends, the courts are better able to address the need for appropriate protection of all parties, including those shielding from coronavirus.
“This is to ensure that judges have all the information necessary to make just decisions and that the most vulnerable tenants can get the help they need.”
Robbie Moore MP (Conservative, Keighley) has received a response to his written question asking whether under Covid-19 lockdown measures landlords of houses in multiple occupation are able to move tenants into properties where other tenants are residing.
The Housing Minister responded: “On 13 May we announced that anyone in England could now move home as long as they followed the advice.
“This includes those moving into an occupied House in Multiple Occupation (HMO): during viewings, HMO tenants should stay out of indoor common areas, such as kitchens, bathrooms or sittings areas. They could remain inside their own private room with the doors closed.
“Tenant safety should be landlords’ and letting agents’ first priority in this or any other move.”
Commons Library publishes paper on Capital Gains Tax
The House of Commons Library has published a briefing note on looking at the recent debate about the structure of capital gains tax, the Coalition Government’s reforms in the 2010 Budget, and the current Government’s approach to the tax. It can be accessed here.
Warning over ‘gaps in support’ during pandemic
The Treasury Select Committee has published a report on gaps in the Government’s support for the economy in light of the COVID-19 pandemic.
In respect of Universal Credit it says: “Individuals not eligible for a coronavirus specific Government support scheme, for any reason, may still be eligible for Universal Credit.
“However, if a household has savings of more than £16,000, they are not eligible for Universal Credit.
“The £16,000 savings restriction does not apply to either the Coronavirus Job Retention Scheme (CJRS) or the Self Employment Income Support Scheme (SEISS). It is not clear why there is no savings threshold applied to the CJRS or SEISS when such a cap is maintained for UC.
“Individuals with “no recourse to public funds” who are made redundant will not be able to receive Universal Credit as UC is classed as a public fund. In contrast, an individual with “no recourse to public funds” who is employed and placed on furlough, or who is self-employed can make use of the CJRS or the SEISS.”
The report can be accessed here.