On Wednesday we discussed how this year’s Budget would affect those in the restaurant trade, and today we are looking into how it will change the private rented accommodation sector in the next twelve months. Housing was one of the most important topics for the Budget this year as not only is there a massive shortage of housing across the UK but also an increase in the amount of people now renting properties as they cannot afford to get onto the property ladder. Here we explain some of the key points of the Budget that will affect landlords the most:
Lack of housing throughout the UK has led to the government making some rather unpopular decisions recently, such as introducing the ‘bedroom tax’ which will lead to anyone living in a property that has a ‘spare room’ having their housing benefits cut. At the same time as trying to use what property is currently available to the best of its ability, the government is also investing heavily in the construction sector, however they have stated that they are not planning on borrowing more money for projects as this could adversely affect markets.
As well as investing in housing construction, the government have also launched a new ‘Help to Buy’ scheme that will give 20 per cent loans to anyone that manages to save a 5 per cent deposit for a new property. The aim of the scheme is to help first and second-step buyers and improve the overall market; however there have already been criticisms from members of the housing industry. Many have argued that previous schemes of this type have not worked, and that the government should invest more in the private rented sector as at this point in time it is providing more accommodation for people across the UK than privately owned houses.
Even though the government is against borrowing more money for housing projects, George Osborne is planning on incentivising banks to lend more money to those in the housing sectors. This is good news for landlords as it means it may become easier to gain funds for buy-to-let properties and expand their portfolios. This also means that landlords may be able to remortgage their properties more easily in the future, which will help with their overall business. Landlord insurance providers will also be happy to hear that landlords will have more access to funds as it means there will be less chance of them defaulting on their payments.