The toe of Labours boot to landlords…
Extra 2% stamp on BTL and second homes from tomorrow…
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They certainly don’t want us buying any more houses.
I’m also surprised that they didn’t increase CGT for house sales. I thought they might in an attempt to lock us in, with the upcoming Renters Rights Bill changes.
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if their aim is to release housing stock then increasing stamp duty while keeping CGT unchanged makes sense as it encourages selling while discouraging buying.
… not that I have any idea what their actual aim is…
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I was following the live coverage of the budget today, and put together some notes that may be relevant…
- the lower rate of Capital Gains Tax will rise from 10% to 18%, and the higher rate from 20% to 24% (matching the residential property rates, which are staying the same)
- the stamp duty land surcharge for second-homes will rise by 2% to 5% from tomorrow
- government to invest £5bn for house building
- the inheritance tax threshold freeze has been extended for a further two years to 2030
- around £3.4bn will be made available over the next three years to insulate 340k homes
- £40bn rise in taxes
Curious to know what everyone thinks…
Absolutely nothing to encourage entrepreneurs, just more redistribution. We already have 9million working age people not working, I didn’t hear anything in the budget about getting them back to work, in fact with the NI increases then employers are incentivised to reduce headcount. We seem to be circling the drain.
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are you sure that’s actually for building and not just “housing” i.e. to support the massive spending on housing benefit?
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i think we have just gone down the drain.
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like to see them house everyone without the private sector
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The long term agenda is for the banks and insurers to buy the housing stock and people can rent from them
Because corporate give a better service and you can report your problems to someone in a different continent ……
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Rents will be sky high. Every minute of time concerned in the management of the properties will need to be paid for before getting to any kind of return on the financial investment they have put in. All the time a Landlord puts in for free, someone will have to be paid for and investors will still want a good return. Social housing is struggling to supply decent accommodation because they can’t make it pay. Councils have set up housing management companies that have then gone bankrupt, leading to mass section 21 for the tenants who then go back to the same council and need to be re-homed. Feels like madness at the moment.
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I agree
Gove wanted to set up a housing model like in Europe ( I think Germany if I recall correctly )
His plan was to eradicate private landlords
You are right . We work in an industry where a lot of work is done at our own expense
I can’t remember where I read this but tenants do want energy efficient measures but they don’t want to pay for it . We live in an age of entitlement …
I have to lecture them on why my rates are more expensive than other houses
Because they can’t physically see the difference.
They save £1k per year on bills compared to D and E rated stock and I need to reimburse the cost of doing the work
It falls on deaf ears
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The CGT increases were limited to non-property assets, which was a relief to those of us selling and potentially facing a much bigger bill.
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That’s right - had a look through the official budget document which confirms:
The main rates of CGT are currently charged at a lower rate of 10% and a
higher rate of 20%, and these will be increased to 18% and 24% respectively from 30
October 2024. These new rates will match the residential property rates, which are
not changing.
I believe there may have been some misreporting by news outlets earlier, which caused my confusion as well…
Did some digging and found the information from the official budget document below. It seems that the £5 billion is indeed intended to support Labour’s housing plans…
To deliver on the commitment to get Britain building, the government is
adding £500 million to the Affordable Homes Programme in 2025-26. […]In addition, the government is:
- Confirming a settlement of over £5bn for housing investment in 2025-26
- Confirming £56m to deliver over 2,000 homes at Liverpool Central Docks and £47m to support the delivery of up to 28,000 homes that would otherwise be stalled due to nutrient neutrality requirements
- Providing an additional £3bn of support for small and medium-sized businesses (SMEs) and the Build to Rent sector, in the form of housing guarantee schemes
looks like it then… I asked because of this eye-opening article in the latest issue of Private Eye:
But that is from 2021/22 so we’re some way on from that … and have a different government so…
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Yes. Not sure why we bother tbh.
Question for clarification although appreciate new rules still being developed
If I put my flat/s on the market and they donot sell, am
I prohibited from renting them out again if they don’t sell. I dont have to wait 12 months with an empty flat?
Flats in new developments are notoriously difficult to sell.
Thx
That’s really interesting
It’ll add to the homeless crisis
Not sure every angle was thought about before they made up this nonsense
if you are referring to eviction for the grounds of ‘selling’, my understanding is that you’ll have to have an empty flat.
Its unclear how it will be enforced. In theory by Trading Standards, but this would require the ex-tenant to know you have re-let it out & report you.
They may instead choose to record the eviction reason on the new Rental property database, and presumably delete the property from the database. Hence, if you re-let it out without putting it back on the database you will be in hot-water, and likewise if you try & re-register it on the database, this will be picked up & you’ll be in hot water.
Obviously, this is all still being debated in the committee stage of the Bill.
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This would only apply if you used the proposed new ground 1a to evict a tenant. I agree that its a real issue though. I put a property on the market a couple of years ago and then the Truss government caused interest rates to rise and I got no offers. After 3 months I had to re-let to pay the mortgage. This would not be possible once the RRB is enacted if Id evicted the tenant.
Hi I believe the large companies wish to diversify their investments to property after observing how well the PRS doing.
They are not satisfied with just lending. They wish to play larger part in renting. They canvassed long and hard with the politicians in meetings at the Guildhall and Mansion House to take the approach of incentivising the large corporation to buy and rent out properties, convinced them that is the best way forward. Politicians being good Muppets are now legally driving the small landlords out of the PRS. They probably also stated their properties will have energy efficiency and reduced carbon print. So the CGT is still manageable but buying further stock is made practically impossible, especially in London.
Large corporates have a lot of liquid funding available with their own useless office buildings converted into flats. Some of them are also writing to landlords stating that the PRS is not as it used to be. So they are encouraging them to invest with them to get guaranteed 10 to 15% yield. I know guarantees from such companies do not mean anything with caveat to say subject to current interest rates, government policies etc. I know the offers are too good to be true, so it is worthless.
As you said they will staffing and other overheads, so their rental will be a lot higher than the current market rents. Tenants were originally and now not happy. Let us see what happens in 3 to 5 years down the line. The builders wished to sell to buy to let investors, now they will keep them or sell whole buildings to large investor companies, like John Lewis, etc. Lloyds Bank, John Lewis and other companies have already started converting their stock to box type flats for individuals, couples, families.
The council is selling their stock, wants to buy new build rather than investing in the existing landlord properties, even if the later properties are B and C.