MARKET: Late Autumn budget date to prolong tax speculation damage
Budget date has now been set, but its late timing has led to warnings that the extended uncertainty will drive up rents and accelerate landlord exodus.
Chancellor Rachel Reeves has confirmed she will deliver her second budget on 26th November.
But the prolonged speculation over property taxes is causing damage to the rental market and the National Residential Landlords Association has warned landlords to keep themselves informed of all the potential changes.
The unusually late timing – nearly a month later than last year’s budget – is because Rachel Reeves is said to be trying to buy as much time as she can before unveiling what many commentators are calling the toughest budget in years.
£40 billion shortfall
The Chancellor is facing a £40 billion shortfall, and so the private rental sector is very much in her crosshairs. Leaked reports have suggested National Insurance could be extended to rental income, potentially raising £2 billion per year and resulting in rent increases of up to £1,000, it is claimed.
We’ve been clear that rising rents are the likely outcome – hitting renters’ pockets.”
Chris Norris (main image), Chief Policy Officer at the NRLA, says. “We’ve been clear that rising rents are the likely outcome – hitting renters’ pockets – if speculation that the Government could look to squeeze landlords’ finances further is borne out.”
Whether or not that happens, there are increasing reports that the prolonged speculation is now damaging the housing market. The NRLA says it has been monitoring the situation closely and that, in addition to any NI changes, it is concerned that potential changes to Capital Gains Tax rates, inheritance tax reliefs, and Stamp Duty rates will also have an impact on rental investment decisions.
Norris emphasises that with up to one million new rental homes needed by 2031 to meet demand, the Chancellor should be using the tax system to encourage long-term investment rather than drive landlords from the market.
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