Peter Littlewood, from iHowz Landlord Association, says ‘iHowz has consistently called for a mix of reforms to stimulate the industry:
- Rescind Section 24 of the 2015 Finance Act
- Allow Registered Landlords to reclaim Supplemental 3% SDLT on rental properties
- Remove the requirement to pay Supplemental 3% SDLT on lease extensions
- Index the Supplemental 3% SDLT threshold or link it to the standard SDLT threshold
- Extend the period for filing CGT return to 6 months
- Make residential letting property a qualifying asset for CGT roll-over relief
- Remove 8% surcharge CGT for rental properties, or some sort of retirement relief
- Energy Efficiency costs:
- 100% write down of costs in year of spend.
- Grants with a long-term scheme which recognises a realistic approach (fabric first + achievable measures)
- Zero VAT rating should apply to Conversion, Refurbishment and Retrofit Works to match new build’
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “Most people, and political parties, agree that we need to address the chronic shortage of affordable homes to buy and to rent. We are hoping for proposals that go some way to achieving that goal, over and above bringing more empty homes and commercial premises into use, particularly on brownfield land, which has received considerable publicity. We don’t want more talk, we want action.
“A strong housing market is not only beneficial to those directly involved in the industry but job and social mobility has a multiplier effect on many businesses, as well as the wider economy. Building more homes, particularly where most needed, is vital to keeping prices and rents in check but will take time, long-term vision, planning reform and political consensus.
“Extra shared ownership support, making it easier to enter and leave the sector and including revision of upper-income thresholds, would be welcome. A revised Help to Buy, rather than Help to Sell, has been suggested but it mustn’t inflate house prices in the short term, and land prices and supply in the longer term. Any new version of the scheme should be time-limited and targeted on new build initially, then existing homes, in order to avoid previous problems recurring. Governments should know by now – it’s difficult to assist first-time buyers with their property purchases without boosting prices.
“Aspiring first-time buyers would much prefer to pay their own mortgage than their landlord’s and they are the lifeblood of the market as they trade up regularly, whereas investors often acquire similar properties but remain on the lower rungs of the ladder. The government hinted that first purchases could be made more affordable, such as easier deposit saving, perhaps by an extension of the ISA scheme, and stamp duty concessions. Stamp duty keeps owners in homes they don’t need or want, reduces choice and inflates the cost of those aspiring to buy or rent, to say nothing of the negative impact on job and social mobility. This unpopular tax could be replaced by a fairer distribution of council tax, which is currently based on values from over 30 years ago, particularly on higher-value homes, though the cost and delay will mean change won’t happen anytime soon.
“Raising the ‘Rent a room’ tax relief in line with rents – ie about 50 per cent since it was set in 2016, would help make better use of existing resources.
“However, I suspect very little will actually happen in the Budget because the Government can see that without doing too much the housing market is improving on its own.”
Leaders Romans Group (LRG) comments:
Karen Charles, Executive Director, Boyer (planning consultancy)
The list of what the Chancellor could introduce to bring forward more new homes is considerable. From my point of view, we need to see initiatives to support the delivery of homes in sustainable communities with high quality placemaking and healthy neighbourhoods in settlements where people want to live such as large villages and towns, alongside high density housing on urban brownfield sites which is the Government’s preference. There is a need for balance and the delivery of a variety of homes in a mix of locations to meet different housing needs.
Tim Foreman, Managing Director of Land and New Homes, LRG
Since the government ended the Help to Buy scheme it has become increasingly difficult for first time buyers to get on the housing ladder, with many having to find huge sums of money to use as their deposit. I would like to see the Government turn its attention to first time buyers, appreciating the difficulties that they face and enabling them to make the very important first step on to the ladder – and in doing so, getting the market moving for thousands of others.
Currently only the ‘have to moves’ are motivated. But a relatively simple initiative aimed at first time buyers would free up the market, restore sentiment and get the ‘want to moves’ motivated again.
With an election only months away, it’s a no-brainer.
Looking to the property market more generally…
Kevin Shaw, National Sales Managing Director, LRG
The health of the property market is vital to the success of the UK economy. This is partly because the domino effect from a house sale is greater than that of any other purchase: from professional fees to redecoration and the purchase of new furniture the total spend by new home owners – and therefore the benefit to the economy – far exceeds the house price.
For many years it feels as if the Government, in its constant stalling of new home development and disincentivising of the private rented sector, has failed to understand the seismic impact of the property market on the economy.
Movement in the housing market also contributes substantially to a sense of wellbeing in the economy and in individuals’ lives – both of which are fundamental when it comes to voting to keep the government in power or go for an alternative.
With a general election only months away, I would hope that the Government appreciates what some tweaks to fiscal policy could do – to their own benefit as well as to the country at large.
Interest rates are the biggest barometer of all: an interest rate change of as little as 0.25% would have a considerable impact on sentiment. The Government’s focus must be on reducing inflation so that interest rates fall and mortgages with them. While changes to interest rates per se aren’t within the Government’s control, creating the right environment for an interest rate change certainly is.
Allison Thompson, National Lettings Managing Director, LRG
The private rented sector must be better supported by Government as part of a drive to resolve the housing crisis.
Central to this is relaxing some of the tax implications on landlords, to compensate for the losses incurred through additional regulation, interest rates rises and potentially the impact of the Renters Reform Bill.
I hope that the Chancellor takes into consideration the important fact that the private rented sector is the only business sector in the UK which, since the abolition of MIRAS, is taxed without offsetting. The playing field needs to be levelled, urgently, to retain the level of stock in the private rented sector.
Sarah Thompson, Managing Director at Mortgage Scout
All that we in the mortgage industry ask of the Chancellor is that he concentrates on lowering interest rates.
This means getting inflation under control – admittedly no mean feat – so that the Bank of England can take a majority decision to reduce interest rates. In the past few months members of the Monetary Policy Committee have expressed a desire to do so: we’re half way there.
Once interest rates begin to come down, the housing market will react quickly. Addressing both the cost-of-living crisis and the housing crisis, this will result in a win-win for both politicians and the electorate.
