6th
Nov 2024
Nick Lyons, CEO of a property inventory firm warns that landlords may bear the financial brunt of Chancellor Rachel Reeves' recent Budget.
He suggests that the ridiculously increased tax liability on businesses, letting agents etc, will likely result in higher charges/costs will be paid in part or most by tenants.
He says: “The additional cost to employers will result either in decreased profits, lower pay settlements for staff or both.
“For letting agencies and the enormous number of small suppliers that all agents depend on, this will have a massive effect.”
He notes that the 6.7% rise in the National Living Wage will also impact businesses making them to either shoulder the additional costs or transfer them to landlords.
He said: “These additional costs will either have to absorbed or passed on to the landlords, who, in turn, will have no choice but to pass them on to tenants who will face yet further rises in rents.”
On top of this landlords are confronting higher Stamp Duty Land Tax on second homes and buy-to-let properties. This increase may deter investment in the PRS market leading to a potential decline in new property acquisitions.
Mr Lyons said: “This was a further blow to investors; many of whom may think twice about any plans they had to expand their portfolios.”
Despite the Chancellor's efforts to bolster the housing market through initiatives like Build to Rent and social housing, the private rental sector has been mostly neglected.
He adds: “The truth is that the country relies on a thriving PRS – at 4.6million homes, it accounts for 19% of the residential properties in England and around £1.5 trillion worth of stock.
“If investors continue to leave the sector because of the weight of opposition they feel, where are those millions going to live?”
He also pointed out that the increased regulation and abolition of Section 21 evictions in the Renters’ Rights Bill, plus new EPC standards, is a ‘blow to investors’.
He added: “Many of whom may think twice about any plans they had to expand their portfolios.”
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