PropertyWire Editor Ryan Bembridge looks at what could be in store in Wednesday’s Budget announcement from Rishi Sunak
Stamp duty holiday
These three words have been on many people’s lips in recent months. Given that the government tends to leak its announcements to The Telegraph and The Times, it seems likely the reports about the stamp duty holiday extension will turn out to be true.
Personally, I think the government will offer a tapered approach by only allowing those already in the process of buying to benefit from the relief. The question is when it decides the cut-off date should be. Will only those who get a mortgage offer by the end of February be able to benefit from the extension? We’ll see.
The MP debate on extending stamp duty relief a couple of weeks ago was revealing in that it showed how many supported a extension, but still wanted to avoid a cliff edge situation. This is a government that tries not to rock the boat, so I would expect it to go with what the majority of MPs – as well as the general public – are asking for.
Cladding
Cladding is another frequently discussed topic, as Liberal Democrat MP Sarah Olney suggested that money spent on stamp duty relief should be redirected to this area.
While £5bn has been pledged to fix buildings with flammable cladding, the amount required is said to be £15bn.
I’m sure the government will be keen to put the tragedy of Grenfell behind them, while asking leaseholders to pay for the works is not only unfair, it’s a PR disaster for the Conservatives.
Capital Gains Tax
One area that landlords are worrying about is potential changes to Capital Gains Tax, as the government’s Office for Tax Simplification recommended for it to be increased from 28% to 40% for higher rate taxpayers.
If the Conservative government makes a big change to CGT it could anger a lot of landlords – including those from its own party.
It remains to be seen if it will hike CGT to as much as 40%, or if it opts for a smaller increase that enables it to increase the Treasury’s revenue while keeping everyone relatively happy.
Green initiatives and EPC ratings
Another factor that’s been talked about, by the Intermediary Mortgage Lenders Association for example, is green home initiatives.
The £2bn Green Homes Grant scheme has so far only helped 8% of its target of 600,000 households switch to renewable energy.
As Kate Davies, executive director of IMLA, said last week: “The Green Homes Grant was well-intentioned, as was a recent BEIS consultation on improving home energy efficiency, but we think this challenge requires a much wider and more ambitious cross-government strategy, rather than a piecemeal departmental approach.”
Perhaps we’ll see an announcement on this, especially as landlords are required to upgrade the Energy Performance Certificate (EPC) rating of their properties to C by 2025.
Ryan Bembridge, Editor, PropertyWire
