PRS reaction to the Budget

Many landlords and tenants have been left feeling disappointed as there was no further financial help for the PRS announced in the Budget.;
Financial

The long-awaited Budget has left many landlords and tenants feeling disappointed, as Chancellor Rishi Sunak seemed to forget any form of financial help from the private rented sector, despite demands from various industry bodies.

Prior to the budget review taking place, various industry bodies called for the Chancellor to introduce measures that would help support tenants and landlords that have had their incomes impacted by Covid-19.

In particular, ARLA Propertymark issued a list of 10 demands for the Chancellor’s review. Whilst some of these demands were met, such as the extension of the stamp duty holiday, others, including a financial support package did not make the cut.

More financial support needed

Contrary to Labour’s criticism that the Conservatives had unfairly favoured landlords, within the private rental sector there was disappointment.

In response to the Budget announcements, Timothy Douglas, policy and campaigns manager of ARLA Propertymark stated:

“Extending the increase to the Universal Credit Standard Allowance and the furlough scheme until September will help tenants plan ahead but much more is required to avoid a mounting crisis in the private rented sector.

“As the impact of Covid continues to bite and unemployment rates rise, we are increasingly concerned about how tenants will avoid future rent arrears and landlords will remain incentivised to stay in the rental market.

“There is a real need for the government to ensure a wider package of measures to help tenants and landlords keep the rent flowing.”

Chief executive of the National Residential Landlords Association, Ben Beadle also shared his disappointment, stating:

“The Chancellor’s pledge to do whatever it takes to support those affected by the pandemic will ring hollow for thousands of tenants and landlords across the country.

“The government has admitted that private tenants have been hardest hit by the pandemic, and figures show that most of those in arrears are unable to access emergency housing support from local authorities.

“Despite this the Chancellor has failed to provide the sector with the financial support needed to pay off rent debts built as a consequence of the virus.

“Without help to get arrears cleared, many tenants face the prospect of losing their homes and having damaged credit scores, which will undermine the government’s efforts to help generation rent become generation buy.”

Good news in some areas

Although not all requests were not considered, some landlords may be relieved to see that they have escaped a rumoured hike in the Capital Gains Tax.

Whilst an increase in corporation tax has been announced for April 2023, it won’t affect a large proportion of landlords, as it is only applicable for companies that are making profits of at least £50,000.

Those under this threshold will pay corporation tax at the current rate of 19%.

As expected, the extension of the stamp duty has been much appreciated by many. Property purchases now have an extra three months to benefit from the stamp duty holiday.

The Chancellor is also continuing to exempt property purchases of up to £250,000 from stamp duty fees till September 31st.  This will likely give landlords a boost in confidence to continue to invest.

This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.