We are fast approaching the first of the Chancellor’s two Budgets of 2017 and the NLA has been focusing on how landlords can cope in the post Section 24 world.
As members will know we recently met with the Financial Secretary to the Treasury, Jane Ellison MP. Once again we stated our position regarding Section 24 and presented all our available research and survey evidence. Whilst she heard our arguments politely, and was keen to see our evidence of more tax payers pushed into the higher tax bracket, it is fair to say the Government are not going to reverse the Osborne Legacy just yet.
The NLA will continue fighting the good fight in terms of Section 24 and we are integral members of the Axe the Tenant Tax coalition. What is encouraging is that this Government are at least receptive to the industry and hearing our views. We are on very good terms with the Housing Minister Gavin Barwell MP and the representatives of the coalition have met with the Chancellor himself.
However we recognise that to get the Treasury to change its mind will increasingly rely on undertaking research in order to demonstrate measurable changes and effects post implementation 2017 onwards. We have commissioned a firm of economists to undertake research into the projected impact of Section 24 on the UK economy which is due to report soon, however this type of campaign is likely to take some time.
Therefore we have been thinking longer term with our lobbying. The Government have stated they want to change the investment habits of people away from property and into other savings which could help pay down the Government debt. In our conversations with officials and Ministers, they seem to favour a PRS dominated by professional landlords with large holdings.
All the feedback from those of our members who are affected has said that they will do one of the following:
- Raise Rents
As a membership body we are duty bound to lobby on behalf of our members interests. Therefore our budget submission, whilst once again stating our opposition to S24, explores practical measures the Government could introduce achieve their stated policy aims and to help our members plan for the future.
We do so being very realistic about the uphill task we face. The Government is preoccupied with Brexit whilst the country’s finances are stretched to breaking point with multiple demands and unacceptably high debt levels.
Therefore, whilst drawing attention to our past submissions in which we suggested alternatives to Section 24, in this submission we have only asked for three very specific things.
- The introduction a CGT cut or taper: We argue this will to help facilitate the disposal of poorly performing property and diversify people’s financial investment portfolio. We have sent costings to the Treasury which show this need not be as expensive as some fear.
- The extension of business asset rollover relief to allow restructuring of portfolios: We argue this will facilitate increased sales of property and greater mobility between tenures, whilst allowing landlords to reduce the gearing of their portfolios, thereby protecting against market shocks and improving stability.
- The reintroduction of the Landlords’ Energy Saving Allowance (LESA): New tenancies will not be allowed to be granted for properties with Energy Performance Certificate (EPC) ratings of F or G from April 2018. Following the collapse of the Green Deal we are urging the Government to help mitigate the major capital costs over 300,000 landlords are facing in order to stay in business.
If you keep telling someone they are wrong and then ask them for lots of things, sooner rather than later they will stop listening to you. We hope that our narrow focus will help us in our lobbying efforts, ahead of both this Budget and others, and help our members overcome or at least mitigate some of the effects of the Osborne legacy and help them live in the post Section 24 world.