9:40 AM, 21st November 2023, About 2 weeks ago 2
With the government’s Autumn Statement tomorrow, the property sector is keenly awaiting the Chancellor’s key announcements.
Many in the sector are hoping housing will be at the front of the agenda and some tax cuts for landlords will be on the cards.
Some in the property sector also hope the Chancellor will abolish Section 24.
Sarah Coles, head of personal finance, at Hargreaves Landsdown, said tax cuts could be on the horizon for the Autumn Statement.
She said: “The air is thick with speculation as we approach the final straight towards the Autumn Statement.
“Everything from ISA to pension changes is being widely debated, and this could be a real opportunity for people’s savings and investments. The likelihood of tax cuts in the statement appears to have risen very slightly.
“Cuts were expected to be postponed to the spring. But, the Office for Budget Responsibility (OBR) has announced more ‘fiscal headroom’ at the moment, with a warning it might have disappeared by the spring. So, it might be now or never for tax cuts.”
She added: “However, the government will be keen not to fan the flames of inflation. If Chancellor Jeremy Hunt does pull the trigger on tax cuts, it’s the less inflationary inheritance tax and stamp duty thought to be in the frame, and not income tax.”
Gina Peters, head of landlord and tenant services at Dutton Gregory Solicitors, said: “We hope to hear more about the Renters Reform Bill and what many landlords want to see is Section 24 abolished, which would provide relief for landlords.
“It’s a difficult time for both landlords and tenants and with the recent proposed abolishment of Section 21, we are seeing an unprecedented amount of buy to let landlords selling up.”
Ms Peters says some landlords would like a dedicated housing court but the Chancellor is unlikely to announce anything in his autumn statement.
She continued: “With the Renters Reform Bill, the key issue which many landlords are feeling apprehensive about is the delays the abolishment of Section 21 would cause.
“It has been predicted that court fees will rise by 10% and will be likely early next year, to provide a significant amount of income for the government.”
She added: “However, it will not resolve anything unless they specify a purpose other than an increase in overheads. A dedicated Housing Court would be wonderful but there is no hint of it on the horizon.”
Paul Sams, head of property at Dutton Gregory Solicitors, said the recent change in housing minister is not helping to solve the housing crisis.
He said: “Housing is an issue which should be at the forefront of the Government’s agenda and be a key feature in the Autumn Budget.
“It’s difficult to see if housing will be a problem that will be resolved anytime soon, especially with the recent cabinet reshuffle, and new levelling up and housing ministers being appointed left right and centre.”
He added bringing back the help-to-buy scheme will help the property market.
Mr Sams continued: “A key incentive which would ultimately have a huge impact on the housing market and introduce some stability, is to bring back Help to Buy, or an incentive which offers a similar amount of support.
“The Help to Buy scheme was extremely beneficial to first time buyers, housebuilders, and the overall health of the property market. As it was self-funding, it should never have been scrapped.
“With a lack of any sort of incentive for first time buyers, this has caused the rental market to become completely oversaturated, with the demand for rental properties completely outweighing the supply.”
Mr Sams suggests the chancellor introduce interest relief for landlords such as introducing grants for making properties energy efficient.
He said: “Introducing some sort of interest relief on landlords mortgages would provide many with peace of mind, and would hopefully prevent them from wanting to sell their property portfolios.
“Currently there are too many landlords wishing to sell, and therefore significantly reducing housing stock for renters.”
“Changes in Stamp Duty Land Tax to boost the market, especially by removing the higher rate taxes for landlords, have not worked.
“The ways in which the government could help buy-to-let landlords is by introducing grants to make their properties more energy efficient, or interest relief on landlord’s mortgages.
Jeremy Leaf, a north London estate agent and former RICS residential chairman, said help for first-time buyers will help free up the rental market.
He said: “First-time buyers also free-up rental properties to other tenants who are not yet ready to buy, reducing renewals and easing the shortages particularly of desperately-needed affordable homes.
“More available letting property reduces upward pressure on rents because supply is so short, while landlords are also leaving the sector due to increasing tax and regulatory burdens. More help for first-time buyers is therefore a win-win for a large number of people.”
He added he wants to see the Autumn Statement focusing on longer-term interests rather than short-term.
He said: “There’s been talk too of extending the Mortgage Guarantee Scheme which sounds good in theory but in practice there has been relatively low take-up.
“It is all very well saying this will help first-time buyers but it must be more accessible and aimed particularly at single first-time buyers.
“We would like to see politicians focus on the longer-term interests of the market rather than short-term fixes.
“Easing the planning backlog to raise housebuilding supply would be another smart move – especially for SMEs – now mortgage rates, though dipping, look as though they are going to stay relatively high for longer.”
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