I’m sure you’ve had your fill on the budget by now but just in case here is a little more.
There are some pretty obvious headline matters which we’ll get out of the way first. SDLT up to 5% is the main thing that will directly affect landlords. Only those buying more properties of course but still it will affect landlords. Serious landlords will build this in to their purchasing calculations and less serious ones will get a shock on completion. The desperate will be pushed even more in to the schemes and scams that will no doubt ratchet up a lot now.
Capital Gains on residential property missed an increase for no explicable reason but I am sure it is welcomed by all existing landlords.
That’s it for the tax headlines as far as landlords go. Decisions about whether to buy personally or through a company are largely unchanged – complex and bespoke to you.
There is a lot of wider implications from the budget though…
The markets are already in a fix wondering what to do with the budget. Gilt rates are up to their highest in a year and although not many are saying it this hasn’t gone down much better than the Truss/Kwarteng mini budget of 2022. Borrowing will increase for years on the back of paltry growth predictions. Moodys say the UK will face “additional challenges”.
Employers national insurance increases will hit workers according and Reeves has “undermined trust” according to the IFS. Reeves and UK Business Minister Jonathan Reynolds admit this now despite the initial rhetoric. Living wage increases in theory mean lower earning tenants will take home more pay but only 30p in the pound hits their pockets due to working credit reductions.
Add in new welfare fraud rules with direct access to bank accounts (is anyone else worried about where else that direct access could happen in future?) and we have a scenario where “workers” will feel a lot of pressure going forward from all angles.
If interest rates don’t drop as fast at they were going to now all lending will be dearer for governments, landlords and of course tenants. None of this should give landlords any comfort that their tenants will have more money in their pockets any time soon.
Promised changes to planning rules, the empty of planning officers and freeing up of right to buy monies should help ease housing demand but it’s unlikely that enough houses will be built to materially affect demand.
So all in all properties will be needed, landlords will have to spend a little more to get them and tenants will struggle to pay rents. Not that much different from where we were prior to the budget. Oh, unless you took a bounce back loan that you shouldn’t have in which case you’ll have the new Covid Corruption Commissioner coming after you soon…