NRLA chief executive Ben Beadle on the association's calls ahead of next week's budget
Budget day is now almost upon us.
On Wednesday chancellor Rishi Sunak will lay out his plans as we set out on the road to economic recovery.
We welcome reports that the chancellor is planning to extend the stamp duty holiday until the end of June to support the property market.
However we want to see more dedicated support for the private rented sector, through positive tax changes to support landlords and tenants and help them get back on their feet in the wake of the Covid-19 crisis.
Since the first impacts of the pandemic were felt we have been consistent in our calls for a comprehensive package of financial support for the sector – both landlords and tenants – and we continue to make our case.
We have said many times before that landlords have gone above and beyond the call of duty to support tenants throughout the pandemic, but this is not sustainable in the long term.
Our submission to Government ahead of the budget contains calls for:
- A package of interest free loans and grants to support tenants to meet their rental payments and stay in their homes
- A robust welfare system that will offer security to renters – with plans to freeze housing benefit and reduce Universal Credit from April reversed
- The scrapping of the 3% stamp duty surcharge where landlords are adding to the net number of homes to rent
- Tax changes to support landlords making energy efficiency improvements
Support for landlords and tenants
The call for sector-wide support has not just come from us at the NRLA. We joined forces with organisations from across the sector, including Shelter, Crisis, the Big Issue and Citizens Advice earlier this month, which are all calling for the same thing. You can read about the joint statement later in the bulletin here.
Under the plans loan payments would be made directly to the landlord to pay off arrears, with tenants safe in the knowledge they could remain in their homes, without building further debt.
Scrap the 3% stamp duty surcharge
Figures out earlier this month showed the number of long-term empty properties in England has now hit 268,385, up by 20% on the previous year.
This is the equivalent of 42,540 properties – with rises in nine in 10 council areas.
To have a tax on developing new housing at a time when more is needed and so many homes are lying empty is completely nonsensical.
Supporting growth in the private rental market would provide the significant boost to the economy that we need right now, with research showing landlords inject over £3.5 billion into local businesses across the UK.
An exemption to the 3% stamp duty surcharge could be offered to all landlords bringing empty homes back into use, be that through developing new housing, converting large properties into affordable units or changing the use of a property from commercial to residential.
Where capital gains tax is concerned we believe the Government must resist calls to make changes or risk diminishing confidence and supply even further.
Tax and energy efficiency
In the wake of disappointing news last week that only 6% of the Government’s Green Homes Grant scheme had been spent due to the ‘poor’ delivery of the programme, the NRLA is calling on the Government to make changes that would make it more appealing for landlords to carry out works.
Under the NRLA’s proposals, energy efficiency measures carried out by a landlord should be offset against tax at purchase as ‘repair and maintenance’, rather than as an ‘improvement at sale’ against Capital Gains Tax.
This would address anomalies in the current system, which mean that whilst replacing a broken boiler is tax deductible, replacing an energy inefficient model for a more efficient boiler or heating system is not.
The Government has committed to upgrade as many private rented sector homes as possible to Energy Performance Certificate (EPC) Band C or better by 2025.
As 62 per cent currently have an EPC rating of D or lower tax changes could have a big impact when it comes to bringing the stock up to standard – and would also help reduce tenants’ energy bills.
As budget day approaches we are reiterating our call to move on from the emergency measures introduced by the Government to allow the sector to start function as normal as the country reopens, promoting confidence in the rental market.
It is our belief that the Chancellor should use tax more smartly to create a healthy rental market and offer sensible, workable solutions to support a vibrant and dynamic PRS.
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