A bonus for the landlords leaving the sector but the pattern of nothing positive for property investors depressingly familiar….
So another disappointing budget for the property market and the property investor community. Groundhog day, but much like the English Rugby team at the moment, we are sadly all the more accepting of disappointing performances I guess.
In the debit column the Chancellor has abolished Multiple Dwelling Relief from Stamp Duty removing an often used relief when investors buy multiple properties in one transaction. It has also abolished the Furnished Holiday Lettings Regime from 2025, removing yet another opportunity to offset genuine business costs against the income generated from short let property income.
The only slight credit was the reduction in top rate Capital Gains Tax to 28% from 24% on residential property sales. I guess it’s almost like a bit of a pat on the back for all those disaffected investors who, after suffering a prolonged period of attack, have finally given up the ghost and decided to exit the sector.
The financial markets reacted positively with the FTSE 100, 250 and the pound all up, while UK Government bond yields on 10 year gilts fell. Probably a relief rally of sorts that any unfunded tax cuts (2022 October min-budget) were avoided.
However for those investing, working and supporting property investment this is another disappointing chapter in a depressingly familiar read. The importance of private rented stock in a healthy housing market is either misunderstood by those in government, or as is more likely, politically just fashionable to ignore. But as continuing records are set for rental levels, the merry go round of housing ministers continues to result in no coherent long term strategy for housing delivery and the failed planning system remains unaddressed – the housing market in the UK will continue to fail to meet the needs of the country. Oh and the population is due to increase by another 10million in the next ten years.
Currently 80% of landlords own 1 or 2 properties and make up 61% of the private rental stock on the market (IMLA report Dec 2023). The shift from smaller landlords to larger portfolio landlords is set to continue as those property investors with the structure, scale and dependence upon investment property have proven they have the resolve to navigate the new fiscal and monetary realities. It is their core business activity and they are finding/need to find ways and strategies to make it work.
At 9Y Capital we are well placed, with the lending expertise and first hand investment experience, to understand the need for new and innovative property strategies. We remain resolute in our desire to support and serve the determined property investment professional.
There seems little point in hoping for a change in approach from the Government, so together we need to find ways to work with the hand we are dealt.
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