The Budget 2017 – Sam’s Commentary
It’s very disappointing that there was no real mention of housing in this year’s Spring budget. It was potentially an opportunity for Philip Hammond to address the uncertainty surrounding the housing crisis, stamp duty land tax and also the impending ban on letting agent fees.
This targeting of landlords not only makes the the market less appealing to investors but is also detrimental to tenants. The buy to let market has already taken a hit from the second home stamp duty levy, especially in higher valued parts of the UK. It’s frustrating to see tax relief for landlords is still due to be reduced because this, along with a potential increase in costs, could further create reduced supply which will mean an increase in rents.
A good example would be our local market Hull. Our average administration fee is around £150, when agents are unable to charge this fee there may be an uplift in costs to the landlord, along with the reduced tax relief, increase in stamp duty and current demand levels there is the potential to see around a 10% increase in rents.
The average local rent (based on our portfolio) is £550 per month which would mean tenants would see on average a £55 increase per month. Over an average 2 year tenancy this would be an additional rental payment of £1320, making a tenant who is potentially saving to buy a house £1170 worse off over the course of a tenancy.
How are these changes beneficial to either a landlord or tenant?
Contact us to give us your thoughts!