Propertymark is calling on the UK Government to prioritise Stamp Duty Land Tax (SDLT) reform and provide support for landlords to reduce costs and meet Minimum Energy Efficiency Standards (MEES) ahead of the Autumn Budget.
Focus on Stamp Duty and landlord support in Autumn Budget
Following Labour’s general election victory on 4 July 2024, Chancellor of the Exchequer Rachel Reeves announced that the Autumn Budget will be delivered on 30 October. With a strong emphasis on enhancing the UK’s productivity and growth, Propertymark has put forward realistic spending proposals aimed at increasing the supply of privately rented accommodation and boosting homeownership.
Proposed measures to boost housing supply
The propositions include assistance for last-time buyers by reforming SDLT, ending Section 24 of the Finance Act, and providing help for landlords and homeowners to achieve net-zero targets through interest-free loans, grants, and extended VAT exemptions for commercial buildings.
Propertymark wants the stamp duty rate for first-time buyers—currently set at zero for properties worth up to £425,000—to remain unchanged. The organisation also advocates for additional support to help first-time buyers enter the property market.
For those aged 55 or over considering ‘right-sizing’ to a smaller property, Propertymark suggests that HM Treasury could tap into a new source of revenue while increasing house sales and providing larger families with homes suitable for their needs.
Reversing Section 24 and promoting energy efficiency
The professional body urges the government to reverse Section 24 of the Finance Act, which would allow landlords to be treated as small businesses and claim 100% of their mortgage interest when completing tax returns. Since this measure was introduced in 2015, landlord costs have surged, discouraging investment in the sector.
Propertymark’s report, Impact of Section 24 on Buy-to-Let Landlords in England, found that 69% of landlords surveyed had experienced an increase in their monthly mortgage repayment. The organisation fears that if the supply of rental properties is hindered by the retention of Section 24, rents could increase further, potentially leading to higher welfare costs to assist tenants facing rent arrears.
Finally, Propertymark calls on the government to assist landlords and homeowners with their energy efficiency targets through a mix of grants, loans, and help with survey costs. They suggest that such measures would boost economic growth by reducing pressure on the Warm Homes Plan and increasing jobs in the construction sector due to investment in retrofitting buildings.
Nathan Emerson, CEO at Propertymark, said: “The Chancellor has a real opportunity to promote much-needed progression within the housing sector. Carefully planned housing policy is the cornerstone to every community across the entire UK and is fundamental to a successful economy.
“With the population expected to hit 70m within the next five years, it’s imperative to have a strategy that upscales a workforce capable of delivering a sustainable mix of homes in key areas of demand. There must be very careful consideration on how available land is utilised moving forwards, ensuring brownfield areas are fully prioritised before dipping into greenbelt land and that there is robust wider infrastructure to support such developments.
“Any proposed taxation structure must promote long-term investment in housing and ensure flexibility for those wishing to move to homes that are best suited to their needs. It’s also important that there is full evaluation regarding future ‘new towns’ to ensure any proposals drive success and deliver future proof solutions for generations to come.”
For property investors, these proposed changes could significantly impact investment strategies and operational costs. The emphasis on Stamp Duty reform, reversal of Section 24, and support for meeting energy efficiency standards may offer both challenges and opportunities in the evolving housing market.
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