The Budget dominated this week in Westminster. Chancellor Philip Hammond delivered the second budget of 2017 and the first Autumn Budget – a shift designed to give more time for business and markets to adjust to changes for the next financial year.
Landlords approached the day with an element of trepidation, given the way recent financial set pieces have been used to batter the sector. Following announcements at the Conservative Party conference, there were also hopes of a boost for landlords offering longer term tenancies – but this turned out to be a damp squib, with only the promise of another consultation.
Other measures affecting landlords included the power for councils to charge 100% additional council tax on empty properties, up from the current 50% premium available; limits on indexation relief on capital gains for incorporated landlords and a delay in introducing the 30 day payment window for general CGT; tweaks to the SDLT regime for additional homes; and confirmation that landlords can continue to claim mileage allowance as an alternative to actual motoring costs.
The removal of SDLT for many first time buyers got the popular headlines, despite warnings that this would simply fuel house price increases in the short term. While there was support for measures to boost supply, none of it will deliver homes quickly, or offer help to those who choose, or need, to rent in the PRS. And when it comes to private renting, the Budget continued to favour institutional investors and build-to-rent, over traditional private landlords. Bright spots for smaller developers and investors may be: the announcement of £650 additional funding to help with remediation and infrastructure on small sites; moves to make it easier to convert retail and employment land to housing; permitted development rights to demolish commercial buildings and replace with homes; and an review of the gap between planning permissions granted and building starts, with the promise of action against land-banking and the trickle of housing supply for commercial reasons.
The big movement was in welfare reform. After years of turning a deaf ear to the RLA and others highlighting the issues surrounding Universal Credit, the government have, at last, listened. The seven day waiting period is to go, advance payments to be more widely available, two weeks additional housing benefit to be paid to those transferring, and the option payment of rent to the landlord available for those already receiving housing benefit. The fact that changes have been made at all is almost more important than the impact the changes will have on tenants, landlords and the availability of PRS housing for those claiming benefits.
There were also wins for the RLA, working with Crisis and Shelter. While Local Housing Allowance rates remain frozen, there is increased support for tenants in those areas where the gap between market rents and LHA rates is biggest, through the Targeted Affordability Fund. £20 million was also allocated for Help to Rent schemes to support people at risk of homelessness to access and sustain tenancies in the PRS.
In the House of Lords, Lord Bird introduced a Bill that would require referencing agencies to take into account rent payment history of tenants when calculating credit scores. The RLA has been campaigning on this issue, and provided a briefing for Peers ahead of the debate. The Chancellor also recognised the RLA’s calls in the Budget, with an allocation of £2 million for a 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.