Earlier this month, the Chancellor of the Exchequer, Rishi Sunak, delivered the Government’s Budget for the year ahead. 2020’s Budget is the first to have been delivered since 2018, and details of the Government’s spending were widely anticipated by individuals across the UK, including private landlords.
This year, the private rented sector wasn’t mentioned directly at all, but with myriad other economic changes, landlords will still be affected by Sunak’s reforms. Below, we discuss some of the key reforms expected to impact landlords and the UK housing sector:
Stamp duty surcharge for non-UK resident buyers
From April 2021, non-UK residents will face a 2% stamp duty land tax surcharge on residential properties across England and Northern Ireland. The stamp duty surcharge aims to moderate the inflation of house prices and hopes to make it easier for UK landlords to invest in property.
It is expected that overseas investors will race to purchase property before the stamp duty increase is implemented next April, but following this, the reform is set to make purchasing property a more viable and financially rewarding investment for UK residents. For first-time buyers hoping to get onto the property ladder, news of the stamp duty increase is likely to please.
While the surcharge doesn’t offer UK landlords the tax relief many were hoping for, it is expected to make it easier to invest in British property and compete with overseas proprietors.
Housing investments for Northern England
For landlords looking to invest in property in the North of England, the Budget 2020 will have come as good news. The Government has promised to allocate billions in spending to boost housing infrastructure across the North of England and the Midlands, with £1.1 billion being used to build up to 70,000 homes across Manchester, Sunderland, Lancaster and beyond.
The Government’s investment in housing infrastructure across the North of England is set to boost local economies and attract an increasing number of professionals to thriving cities like Manchester and Leeds. This, coupled with the North’s lower housing costs, offers a promising opportunity for landlords.
Increased funding for the removal of unsafe cladding
Following the tragic Grenfell Tower fire in 2017, the Government has faced increased pressure to assist with the removal of Aluminium Composite Material (ACM) and other unsafe forms of cladding from residential buildings. This is an area that affects landlords, tenants and homeowners alike.
At this year’s Spring Budget, Sunak pledged a further £1 billion to the removal of ACM and other forms of “unsafe combustible cladding” from private and social residential buildings exceeding 18 metres tall. Although homes of less than 18 metres high were not discussed in this year’s Budget, the increase in funding hopes to make a far-reaching impact on the safety of residential buildings across the UK.
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