On Wednesday, chancellor Rishi Sunak laid out an unprecedented set of measures to help economic recovery in the wake of the coronavirus pandemic.
Several of the announcements were aimed at kick-starting the housing market and incentivising greener homes.
What will these measures mean for landlords and letting agents?
Stamp duty holiday
Among the most obviously appealing to anyone looking to invest in property was the announcement of an immediate stamp duty holiday for homes sold for up to £500,000 in England and Northern Ireland, which is set to run until 31 March next year.
This measure could save a typical BTL investor almost £2,000 according to Countrywide’s Hamptons International, with investors in London and the South East set to gain the most in savings.
One in five landlords pay over £500,000 for an investment property in the capital, meaning that the average stamp duty bill will fall by £7,240 – that’s 26%, while a landlord buying in the North East will see their average stamp duty bill fall by £280.
Ms Beveridge says the stamp duty holiday might be enough to lure landlords back to the market after May saw a record fall in buy-to-let investors, with landlords purchasing just 4% of homes in Britain, but says other tax burdens introduced over the last few years remain a barrier.
“While these measures go some way to aid landlords in the amount of cash they need to find upfront to purchase a buy-to-let property, other tax changes and regulations introduced over the last few years will continue to weigh on the profitability of the sector” says Hamptons research chief Aneisha Beveridge.
Sunak’s stamp duty holiday retains the 3% additional home SDLT surcharge on top of the revised standard rates, so purchases of homes valued up to £500,000 will attract a 3% stamp duty bill.
Sara Macallum, senior partner at Boodle Hatfield, explains: “The 3% surcharge will still sit on top of these new bands – so for buyers of second homes, they will pay 3% SDLT up to £500,000, as opposed to 3% up to £125k, 5% from £125k up to £250k, and 8% from £250k to £500k.”
Green Homes Grant
The Green Homes Grant isn’t specifically aimed at landlords, but they will benefit from Sunak’s environmental carrot.
Landlords will be able to apply for vouchers of up to £5,000 towards the cost of home improvements that save energy, such as better insulation from September.
This is a real boon to landlords as regulations have tightened around energy efficiency in rental homes. From 1 April 2020 all rental properties require a minimum energy performance rating of E on an Energy Performance Certificate (EPC) and landlords face a civil penalty of up to £4,000 for breaching these regulations.
Taking on more staff
Many letting agents were furloughed during lockdown as the housing market skidded to a halt. Many have returned, but the market is still sluggish in the wake of the crisis.
Now businesses are to be paid £1,000 per employee to retain furloughed staff as fears grow many will not be able to keep them on once job retention schemes come to an end in the autumn.
Companies are also being encouraged to employ young job seekers, with the chancellor handing out £2,000 for each apprentice under the age of 25. In addition, the government has offered to pay the wages of any new young employee for six months.