Posts with tag: Autumn Statement

Has the Government Delivered Yet More Empty Promises on Housebuilding?

Published On: November 24, 2016 at 10:21 am

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In his first Autumn Statement yesterday, Chancellor Philip Hammond went some way to ensuring the property market works for everyone by announcing measures to boost housebuilding. But has the Government delivered yet more empty promises?

Has the Government Delivered Yet More Empty Promises on Housebuilding?

Has the Government Delivered Yet More Empty Promises on Housebuilding?

Ahead of the address yesterday, the Managing Director of the National Association of Estate Agents (NAEA), Mark Hayward, welcomed the plans for a £1.4 billion funding injection for housebuilding. He also praised the relaxation of how existing affordable housing funding can be used, believing this would help to diversify the country’s housing mix, creating the homes that people want and need.

“However, the creation of 40,000 new homes that this new funding is expected to deliver is still painfully short of the number of affordable homes we need to solve the housing crisis and get first time buyers on the housing ladder,” Hayward expressed ahead of the Autumn Statement.

He continued: “We hope that the Government will announce an intent to do much more when it releases a widely expected White Paper at the Autumn Statement. It is vital that the Government uses this to signal a radical rethink in its housing strategy and consider measures such as building homes on unused greenbelt land to really kickstart the housebuilding boom we badly need.”

So did the Chancellor deliver on his pledge, or has the Government simply offered yet more empty promises when it comes to housebuilding?

Speaking after the Autumn Statement, Hayward said: “The measures announced during the Autumn Statement today to boost housebuilding go some way to making the housing market work for everyone, but, quite frankly, do not go far enough.

“The Housing Instructure Fund, as well as the fund to build 90,000 affordable homes in London will act as catalysts to start closing the gap between supply and growing demand, but what we really need to see now is properties being built quickly.

“The Government has a long-standing history of announcing numerous housebuilding pledges, but in the last few years, we’ve not seen a sufficient impact on supply to make a dent in providing the affordable homes we really need.”

He holds on to hope: “The detail in the Housing White Paper will be crucial – let’s hope there are far more detailed plans in there when it is released.”

We will continue to keep you updated on the Government’s housebuilding plans at LandlordNews.co.uk.

Landlords seeing the Autumn Statement as a missed opportunity

Published On: November 24, 2016 at 10:06 am

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Yesterday saw the controversial, packed and as it turns out, final Autumn Statement delivered by Chancellor Philip Hammond.

During his address, Mr Hammond outlined plans to ban letting agent fees in the very near future. This has understandably left many landlords upset, with them now left to fit the bill for these charges.

Missed Opportunity

In fact, many buy-to-let landlords have been left disappointed, considering the Statement as a missed opportunity, to back those investing in the sector. Failure to alter stamp duty rates, or abolish proposed changes to mortgage interest tax relief have been highlighted as two missed chances.

Stamp Duty reforms announced by previous Chancellor George Osborne have moved to slow the housing market and has only raised half as much money as the Treasury forecasted.

The Exchequer has received £370m less in Stamp Duty than the £700m it expected, analysis has revealed.

Figures compiled by the Council of Mortgage Lenders indicate that the total amount borrowed by buy-to-let landlords slipped on an annual basis. The total dropped by 22% year-on-year to £2.8bn in September, with loans also down by 6% to 18,200. This shows a decline of 26% on the same period in 2015.

Anthony Hesse, managing director at Property Personnel, said: ‘Slashing the rate of stamp duty would have been Philip Hammond’s single most effective fix for UK finances. There is no more economically stimulating activity than house sales and purchases-so it would have been a tax cut that would largely have paid for itself. As a result, the continued stifling of the market is a missed opportunity for both the estate agency sector and the country.’[1]

Landlords seeing the Autumn Statement as a missed opportunity

Landlords seeing the Autumn Statement as a missed opportunity

Tax alterations

According to the National Landlords Association, 440,000 basic-rate tax payers will be driven into a higher tax bracket from April 2017. This is due to changes to mortgage interest tax relief, which will restrict the amount of mortgage interest landlords can offset against tax.

By April 2020, when the measures have been fully withdrawn, it is feared that higher-rate tax payers will only get 50% of their current relief. The worry is that these additional charges will be passed down to tenants.

Richard Lambert, chief executive officer at the National Landlords Association, observed: ‘This policy will push 44% of basic rate tax-paying landlords into a higher bracket, forcing them to either sell up and end perfectly happy tenancies, or increase rents.’[2]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/11/autumn-statement-missed-opportunity-to-support-buy-to-let-landlords

 

Hammond Should Have Addressed Stamp Duty, Insists eMoov

Published On: November 24, 2016 at 9:40 am

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Categories: Finance News

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Yesterday, Chancellor Philip Hammond delivered his first Autumn Statement, detailing his fiscal plan for the near future. While housing featured heavily in the strategy, Hammond should have addressed Stamp Duty, insists a leading online estate agent.

Hammond focused on easing the current housing crisis in his first address, including measures to deliver a property market that works for everyone.

However, eMoov.co.uk believes that little has changed in terms of the message being delivered during the Autumn Statement and insists that Hammond was wrong to leave Stamp Duty out.

Housing market boost 

Commenting on yesterday’s Autumn Statement, the Founder and CEO of eMoov, Russell Quirk, says: “The main headline where today’s Autumn Statement is concerned is yet another cash injection for the beleaguered UK property market, with Mr. Hammond pledging £2.3 billion for infrastructure to support 100,000 new homes and £1.4 billion to build 40,000 more affordable houses in the places they are most needed, plus a further boost to Right to Buy.

Hammond Should Have Addressed Stamp Duty, Insists eMoov

Hammond Should Have Addressed Stamp Duty, Insists eMoov

“Talk is cheap, even if the numbers being bandied about today are not. And it remains to be seen how the announcement and the money will actually lead to more houses being built in practice.”

He continues: “Mr. Hammond must forgive the nation for welcoming this announcement with a degree of scepticism, as, like many a chancellor before him, these words often equate to little more than regurgitated rhetoric and a shortfall of 100,000 new homes a year.

“The Government must realise that these announcements are all well and good, but it isn’t the funding that is the issue and, until they address the mechanism itself, little will come of it. Where is the land going to come from? How will the planning process be expedited? These are all questions that need answers with actions, not just words, if the current crisis is to be tackled head on.”

Tenant referencing fees ban 

He discusses the letting agent fee ban, also announced during the Autumn Statement: “Today’s announcement on rental fees is nothing more than opportunistic tokenism and, surprisingly, is stolen straight from Labour’s manifesto. Interestingly, the Chancellor’s own Housing Minister, Gavin Barwell, described banning lettings fees as ‘a bad idea’ as recently as September.

“It is ironic that the Government should be turning its guns again on the private rental sector, given that the absence of Government action in building affordable homes to rent in the social housing sector has led to private landlords having to fill the gap on their behalf.”

He explains: “A ban on tenancy referencing fees is great on the face of it, but the reality is that the agent will make their money regardless, and this will be passed onto the landlord and in turn the tenant through higher rents.

“We’ve seen the same thing happen in Scotland, whereby the landlord must charge more to the tenant in rent to cover the increase charged by the agent. You would think the Government would have known this.”

Stamp Duty 

But while the Chancellor may have addressed certain issues facing aspiring homeowners, he missed the chance to make vital changes to the Stamp Duty system, believes Hammond.

“More of a Stamp Duty refrain, rather than a Stamp Duty reform, by Mr. Hammond today. Stamp Duty is an archaic tax and one that the industry has been crying to be changed in a manner than benefits UK buyers.

“Rather than penalise struggling UK buyers, the Government needs to flip Stamp Duty on its head and make the seller accountable for paying it. This would help those buyers already paying the price of homeownership, whilst those that have benefitted from the appreciating price of their property are in a better position to stomach the sour taste of Stamp Duty tax.”

Letting Agent Fees to be Banned in Autumn Statement

Published On: November 23, 2016 at 11:24 am

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Categories: Landlord News,Tenant Fees Ban

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It is now widely expected that Chancellor Philip Hammond is to announce a ban on letting agent fees charged to tenants in today’s Autumn Statement.

Presently, tenants can be charged substantial fees for a number of administration tasks, such as conducting reference and Right to Rent checks.

Ban on letting agent fees

Mr Hammond believes that by shifting these costs to landlords, 4.3 million households could save hundreds of pounds.

He also feels that this move could increase competition amongst landlords, who can now search around for the cheapest agent.

However, the move has not gone down well within the industry.

Richard Lambert, Chief Executive Officer at the National Landlords Association, said: ‘The new Chancellor is clearly aware of the pressures facing those living in the private-rented sector, but in attempting to improve affordability he has shown that, like his predecessor, he lacks an understanding of how the whole sector works.’[1]

‘There’s no doubt that some unscrupulous agents have got away with excessive fees and double-charging landlords and tenants for far too long.  Banning letting agent fees will be welcomed by private tenants, at least in the short-term, because they won’t realise that it will boomerang back on them.’[1

Mr Lambert feels that as a result of the changes, ‘Agents will have no other option than to shift the fees on to landlords, which many will argue is more appropriate, since the landlord employs the agent.  But adding to landlords’ costs, on top of restricting their ability to deduct their business costs from their taxable income, will only push more towards increasing rents.’[1]

Letting Agent Fees to be Banned in Autumn Statement

Letting Agent Fees to be Banned in Autumn Statement

Increased costs for landlords

Richard Price, Executive Director at the UK Association of Letting Agents commented: ‘Arbitrary bans sound appealing as a quick fix, but the problem of affordability in the private-rented sector cannot be addressed by preventing legitimate businesses from charging for their services.’[1

‘A ban on agent fees may prevent tenants from receiving a bill at the start of the tenancy, but the unavoidable outcome will be an increase in the proportion of costs which will be met by landlords, which in turn will be passed on to tenants through higher rents,’ he continued.[1]

David Cox, Managing Director of the Association of Residential Letting Agents, described the ban on letting agent fees as a, ‘draconian measure,’ which will have, ‘a profoundly negative impact on the rental market.’[2]

‘It will be the forth assault on the sector in just over a year and do little to help cash-poor renters save enough to get on the housing ladder. This decision is a crowd-pleaser, which will not help renters in the long-term. All of the implications need to be taken into account. Most letting agents do not profit from fees.’[2]

Welcome

However, Campbell Robb, chief executive of Shelter, observed that: ‘Millions of renters in England have felt the financial strain of unfair letting agent fees for far too long, so we are delighted with the Government’s decision to ban them. We have long been campaigning on this issue and it is great to see that the Government has taken note.’[2]

[1] http://www.landlords.org.uk/news-campaigns/news/hammonds-rental-boomerang-industry-bodies-respond-ban-on-letting-fees

[2] http://www.bbc.co.uk/news/business-38065249

 

Will Stamp Duty be cut in today’s Autumn Statement?

Published On: November 23, 2016 at 10:21 am

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Categories: Finance News

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Today sees one of the most important Autumn Statements of recent years. The eyes of the property market are eagerly watching with interest to see if Chancellor Hammond will make any big announcements for the sector.

The latest figures from HMRC has revealed the substantial impact that the 3% Stamp Duty Land Tax surcharge has had on investors. It is hoped that these figures will convince Mr Hammond to make changes today.

Tax changes ahead?

Nick Leeming, Chairman at Jackson-Stops & Staff, noted: ‘Changes to the way in which stamp duty is levied have gone too far. While the changes seen in December 2014 were good news for 98% of property buyers, those implemented in the last budget announcement which saw an additional 3% charge levied on buyers of second homes has resulted in a substantial decline in transaction numbers.’[1]

‘It is quite clear that any Government hopes of more revenue from Stamp Duty Land Tax for residential transactions has not materialised and if overall Budget tax revenue projections are to be achieved more tax rises will be needed elsewhere. The 2016 Autumn Statement urgently needs to address this shortfall by incentivising people to move home. Removing the additional 3% levy will in my opinion do just that, while further measures to support both downsizers and first time buyers must also be implemented if we are to see a true shift in overcoming the housing crisis,’ he added.[1]

Encourage alterations

Meanwhile, Nimesh Shah, partner at accountants Blick Rothenberg, believes: ‘The latest statistics should encourage the Chancellor to urgently reform SDLT and in particular, reverse the alarming effect the 3% SDLT surcharge has had on the housing market. The forthcoming change to the mortgage interest relief restriction should also be reviewed in light of the slowing housing market.’[1]

Shah feels, ‘The Chancellor has a real opportunity to make a meaningful reform to an outdated and complicated tax system that is now system that is now acting as a deterrent to people moving or entering the property market.’[1]

Will Stamp Duty be cut in today's Autumn Statement?

Will Stamp Duty be cut in today’s Autumn Statement?

Plummeted

Statistics from the HMRC indicate that residential property sales have fallen since March. In fact, they are down by almost 80,000 over the same period in 2015 (1 April 2015 to 31 October 2015).

Paul Haywood-Schiefer, Assistant Manager at Blick Rothenber, said: ‘These are the worst sales figures for the same 7 month period for the past 3 years. The actual drop in sales since April is just 630 properties short of wiping out the bumper number of extra sales in the boom month of March when people rushed to beat the 3% SDLT surcharge on second properties.’[1]

‘The actual SDLT increase over the last 12 months is £972m. However, the last 6 months, when the 3% surcharge has been applicable, has only accounted for a paltry £94m of that increase. This is about 0.017% of the total receipts HMRC has collected from al taxes in the last 12 months.’[1]

Concluding, Mr Haywood-Schiefer, said: ‘These statistics show that not only has the market been stunted by the 3% SDLT surcharge on additional properties, which was introduced with the intention of helping first time buyers get on the property ladder by making it more expensive for those purchasing additional properties to buy the same property, but it is not actually adding a significant windfall to the Revenue’s coffers either.’[1]

[1] http://www.propertyreporter.co.uk/finance/sdlt-regime-should-be-reformed-to-tackle-slowing-property-market.html

 

 

Buy-to-let landlords call for change in Autumn Statement

Published On: November 21, 2016 at 10:05 am

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A new investigation has revealed that the overwhelming majority of buy-to-let landlords in the UK want to see more support from the Chancellor in Wednesday’s Autumn Statement.

Research conducted by Martin & Co found that 92% of investors feel the Government is now anti-landlord and is calling for changes.

Tax alterations

Certainly, the recent alterations have made life much more difficult for investors. In some cases, the 3% stamp duty surcharge, changes to mortgage interest tax relief and scrapping of wear and tear allowance have driven some landlords from the sector.

Last week’s announcement that the Bank of England is to get new powers to regulate lending to buy-to-let investors is another blow.

Further data from the research shows that 74% of investors want to see Stamp Duty scrapped in the Autumn Statement, while more than 50% want proposed changes to mortgage interest tax relief abolished.

Difficulties

Ian Wilson, chief executive of Martin & Co, observed: ‘The Government seems to be set on making life as difficult as possible for property investors, while ignoring the fact that landlords provide essential rental properties in locations where there are housing shortages and no realistic ability to buy.’[1]

‘People are relying on the private rented sector to supply property, so we need the Chancellor to back our landlords and encourage them to continue to invest and provide a vital pipeline of homes for people who simply cannot afford to buy,’ he continued.[1]

Buy-to-let landlords call for change in Autumn Statement

Buy-to-let landlords call for change in Autumn Statement

Pivotal

Eddie Goldsmith, chairman of The Conveyancing Association, believes that the Autumn Statement is a pivotal moment for the housing market in the UK. He feels that former Chancellor George Osborne’s policies has created a, ‘perfect storm.’ If this continues, Goldsmith feels that this could, ‘reduce transaction levels to rubble for many months to come.’[1]

‘It may be too much to hope that the 3% extra charge on additional property stamp duty will be abolished, but such a move-as well as a u-turn on next year’s mortgage interest tax relief changes-would be most welcome,’ he added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/11/investors-are-fed-up-with-governments-anti-landlord-policies-want-chang