The upcoming Budget is unlikely to offer promising change for the buy to let sector, with experts suggesting that the best landlords can hope for is consistency.
Chancellor Philip Hammond has already expressed plans to boost home building plans, with the property industry having lobbied him to introduce some change in stamp duty. Landlords have called for a reversal of the extra 3 per cent stamp duty on additional properties, a levy that hit the buy to let sector hard. However, this seems unlikely in the upcoming budget.
Chief executive officer of buy to let specialist Landbay, John Goodall, has stated that the Chancellor should not overlook the buy to let market in his bid to provide housing.
He said: ‘It is vital that the sector remains attractive to landlords, and complex costs and taxes will disincentivise landlords from engaging in the market. A fall in quality and volume of rental accommodation would hit those that the Budget is trying to help hardest. Renters and potential first time buyers would take the brunt of the costs, actively working against any goals of intergenerational fairness that Hammond claims to have. More widely, this would damage the UK housing and construction markets at a time where the UK economy can’t really afford the hit.’
Corporate tax director and property sector specialist at accountancy firm, Menzies LLP, Rebecca Wilkinson, has suggested that following the recent swathes of new regulation, landlords should simply hope for no new change.
She said: ‘Whilst many landlords are still hoping for a U-turn on the interest restriction rules, which are likely to result in large tax increases, this seems unlikely and the best that property investors can realistically hope for is a respite from further changes, whilst everyone gets to grip with the new regime. The raising of corporate tax rates for investment companies would be a nasty sting for any landlord that has recently incorporated their buy to let business. Whilst corporate landlords may be an easy target for tax increases, and they have been targeted in this way previously, the property rental sector has already been disproportionately affected by changes to tax legislation in recent years and now needs time to come to terms with them.’