5th
Nov 2024
The Leaders Romans Group once again presented a contrasting perspective on the state of the PRS rental sector compared to most of the industry.
Over the weekend 2nd/3rd November, it released a statement hailing the Budget's decision to maintain the current Capital Gains Tax for second homes as "a big win" for landlords; moreover, Allison Thompson, the national lettings managing director says: “It may now be more profitable to continue letting, rather than exit.”
With the forthcoming energy efficiency regulation changes, requiring improved EPC ratings for private rental properties, Thompson adds.: “if landlords are expected to upgrade older properties to meet EPC standards by 2030, then support measures will be introduced now to make these upgrades feasible. Without assistance, many landlords will face prohibitive costs, which could ultimately reduce the number of available rental properties.”
Later on in the firms released statement it plays down the effect of the stamp duty increase on buy-to-let properties noting that the surcharge rose from 3% to 5% overnight following the Budget.
LRG’s view on this is: “The change … may see potential investors currently in the pipeline to purchase, reverse out, again putting more pressure on the private rental sector and reducing tenant choice. Having said that, property has always been a long-term investment, and, over time, price inflation and yields have typically delivered good returns to investors. SDLT is a one-off tax paid when you buy a property – but this is a cost that can be deducted from capital gains tax when you sell. So, just as the first introduction of a higher rate for SDLT impacted initially on investment, over time, it’s just accepted as a cost of investment.”
Summing up the Budget, the agency says: “The good news is, from a property perspective, particularly when you take into account the economic news – inflation, base rates and mortgages – the news isn’t too bad at all. And for some, it’s actually very good news!”
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