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What the sector is saying about the Autumn Statement

Published on Friday, 02 December 2016

Property may not have formed a huge part of Chancellor Philip Hammond’s Autumn Statement, but it was welcomed by the Royal Institution of Chartered Surveyors although landlord bodies were not quite so enthusiastic.

 

RICS head of UK policy Jeremy Blackburn described Hammond as ‘a Chancellor who listens’ Autumn Statement after he consulted the industry prior to the statement. 

 

RICS has warned the government of a ‘critical rental shortfall of 1.8 million homes’ despite the fact that spiralling house prices means many more will become more reliant on the rental sector. Its latest figures highlighting a 15% decline in house sales to first time buyers in recent months and declaring the starter homes scheme much lauded by former Prime Minister David Cameron and Hammond’s predecessor George Osborne, a failure.


Welcoming the relaxation on grants to deliver a wider range of housing types, RICS stated: “Hammond will drive an affordable rental agenda and can get Britain building in a way that benefits a cross section of society, not just the fortunate few.”


However, RICS warned the Chancellor should avoid the pitfalls made by his predecessors and pointed to landlords as being part of the housing crisis solution calling it ‘simplistic’ to expect landlords to pick up the tab following Hammond’s announcement of the ban on letting agents’ fees to tenants. RICS also welcomed the right-to-buy announcement for housing association tenants, but warned housing stock should be replaced.


The Residential Landlords Association (RLA), however, were not quite so complimentary branding the Autumn Statement as ‘a disappointing day for landlords’ Disappointing Autumn Statement after the Chancellor announced a ban on letting fees being paid by tenants. The RLA say the measure, already in place in Scotland, will lead to rent rises for tenants as agents pass the fees onto landlords. In addition, the 2% increase on insurance premium tax will also hit landlords hard.

 

The RLA is also concerned with the planned government review on how incorporated businesses are taxed after many landlords set up their business this way to reduce tax liability after last year’s announcement that Mortgage Interest Relief was to be removed. Mortgage Interest Relief, which had enabled landlords to offset mortgage interest against tax, will not be available from April next year.


Meanwhile, axing or amending the 3% stamp duty on buy-to-let properties and second homes would have given the market a boost,Landlordtoday.co.uk argued missed opportunity .

 

Figures come from the Council of Mortgage Lenders show the amount borrowed by buy-to-let landlords dropped 22% year-on-year to £2.8bn in September with the number of loans falling 6% from the previous month to 18,200 and representing a decline of 26% on September 2015.

 

The National Landlord Association (NLA) has estimated around 440,000 basic-rate taxpayers will move into the higher tax bracket in April next year as a result of the changes to landlord taxation. The organisation warns many landlords with either quit the market or pass the costs onto tenants. That would be in addition to potential rises after letting agents in England will no longer be able to charge fees to tenants.



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