Tag Archives: housing
Landlords in UK should plan ahead for new energy regulations
New Government plans in the UK will require buy to let landlords to spend up to £5,000 to make their rental properties more energy efficient. The new legislation, which kicks in 2018 will require landlords to raise the energy efficiency of their homes to at least Band E for new tenancies by carrying out improvements such as insulation, cavity wall filling and new boilers. It has been suggested by the Residential Landlord’s Association that a total of 330,000 buy to let homes, typically Victorian and Edwardian properties, will be affected and the RLA has warned the new so called ‘green tax’ could push rents even higher. The Government has proposed a £5,000 cap, claiming that most landlords will pay no more than £1,800 but according to Peter Armistead of Armistead Property, the Government should be providing alternative support, now the Green Deal has ended, to help fund energy efficiency improvements. ‘Landlords have been bombarded with new tax measures over the last 12 months and this is yet another cost that some landlords will have to face. Landlords can’t be expected to absorb all these new taxation measures and just stand back and watch their profits being eroded. Unfortunately, it will be tenants that will have to bear the brunt of these costs through higher rents,’ he said. ‘While it is a good move to improve the quality of rented accommodation, there should be another scheme to help landlords make the improvements. The Green Deal gave loans to improve energy efficiency and these loans were then repaid by tenants, who as a result of the works were paying lower bills,’ he explained. To help spread the improvement costs, landlords should start upgrading their properties, before it becomes mandatory in 2018 for new tenants. Buy to let mortgage providers will require borrowers to comply with the regulations and valuers are likely to amend their criteria in the run up to 2018, making buy to let mortgage applications more difficult. ‘Most insurance policies require landlords to comply with all relevant statutory requirements. This may mean that it could be more difficult to get insurance unless landlords comply with the forthcoming regulations. Landlords with F and G rated properties need to manage the upgrading and improving their properties to avoid potential prosecution and fines,’ added Armistead. Continue reading
Call for stamp duty on property purchases in UK to be abolished
A new report calls on the government to undertake real reform to tackle the housing shortage in the UK and in particular to abolish the stamp duty payable on home purchases. According to the TaxPayers' Alliance successive governments have avoided meaningful reform, instead focusing on tinkering around the edges which has only served to worsen the situation and drive up prices. It says that recent tax changes will drive up rents and the recently implemented 3% stamp duty additional homes surcharge and new restrictions on finance cost relief will also advantage richer prospective buyers at the expense of poorer tenants. The TPA says stamp duty is an unfair tax which stops people from buying their own home, settling down with a family, moving for work or downsizing and makes the dream of home ownership ever more distant for millions of families. The report explains that the 3% stamp duty additional homes surcharge will help prospective buyers but it will hurt tenants in rented accommodation and the restriction of finance cost relief for individual landlords will also advantage prospective buyers at the expense of tenants. It believes that both policies will distort housing markets, with implications for incomes, employment and overall welfare and the tax hikes make Britain’s complex tax system even more complicated and distort ownership structures. Other local policy choices such as increasing the cost of houses in multiple occupation (HMO) licences and introducing landlord licencing schemes will hit tenants and as existing owner occupiers take advantage of lower house prices this will result in a tightening of supply conditions in the lettings market, raising rents. The report calls for the stamp duty surcharge to be cancelled, for all stamp duty rates to be halved immediately in a run up to the tax being abolished and reform to planning restrictions to declassify some green belt land and allow taller, denser construction in urban areas. It explains that pressure needs to be taken out of the housing market by making land available for development less rare and less expensive to build on and says that declassifying just 5% of the green belt around London would allow the city to expand by almost a sixth. ‘For decades politicians have failed to tackle the root causes of the housing crisis: a chronic lack of supply. What's more, Stamp Duty is still punitively high and gimmicky tweaks to the tax system will ultimately end up penalising tenants and increasing rents,’ said Jonathan Isaby, chief executive of the TaxPayers' Alliance. ‘The new Chancellor should now seize the opportunity to drastically simplify and reduce property taxes as well as liberalise planning restrictions, which prevent huge swathes of land from being built on for no good reason at all,’ he added. David Cox, managing director of the Association of Residential Lettings Agents (ARLA) said he would welcome a renewed debate on property tax. ‘ARLA has been consistent in our view that increasing tax for landlords will increase rents and reduce property standards… Continue reading
Architects set out what needs to be done to improve UK housing market
Housing policy alone is not enough to solve the UK’s housing crisis whose roots are as complex as they are varied, according to architects. The Royal Institute of British Architects (RIBS) says that as demand for new homes continues to outstrip supply successive governments have failed to keep up and it believes that the only solution lies in bringing together the public and private sector to promote, enable and finance new homes, and improve the quality of homes. In a new report it points out that high quality design needs to be at the heart of the solution. ‘Without it, we’ll be solving one problem by storing up further challenges for the future,’ it says in a anew analysis report and calls for housing policy to be added to the remit of the National Infrastructure Commission and for future infrastructure schemes to include details of their impact on housing supply. It also calls for the establishment of a Chief Built Environment Adviser and better use of public resources. ‘With interest rates at historic lows, more can be done to use the balance sheets of public and private sector bodies to boost housing supply,’ the report suggests, adding that the cap on Housing Revenue Account receipts should be lifted to allow councils to borrow to build social housing. Other possibilities include central and local governments setting up public sector investment vehicles and a national housing investment bank to issue bonds and ISAs, recycle right to buy receipts and attract long term institutional investment. RIBA believes that local authorities should set up Local Housing Development Funds, with initial capital for investment provided by local authority pension funds. Once such schemes are up and running, they would be able attract secondary institutional investment and the Government should transfer responsibility and resources for housing and planning to local and regional authorities. ‘This transfer needs to be accompanied by greater autonomy over policy setting. The regeneration of housing estates should be based on an approach which makes the most of the strengths of existing communities and addresses the challenges exacerbated by the urban environment such as anti-social behaviour or high rates of obesity,’ the report says. ‘Local leaders should be empowered to shape their local housing market by taking control over requirements for affordable housing, including the tenure composition for new developments such as social rent, affordable rent, living rent, shared ownership, and Starter Homes, based on local housing need, rather than fixed national targets,’ it adds. It also points out that self build and custom build add value to a locality, can be an affordable routes to home ownership, and are valuable as delivery mechanisms for new, high quality homes. It acknowledges that the Self-Build and Custom Housebuilding Act and the Housing and Planning Act aim to identify land and provide planning policies to support custom build but says that unless local authorities have sufficient resources they will struggle to implement their duties… Continue reading
