Budget 2024: Landlords let down by the government again. What to do?

This week’s Budget brought significant changes for landlords, with implications for capital gains tax (CGT), furnished holiday lets relief, and multiple dwellings relief.

As the dust is still settling, let’s consider their impact on our investments and the rental market.

In a speech that only had one bright spot – the gag at the expense of Angela Rayner and her issues over selling a council house, who obviously didn’t enjoy it – there wasn’t much to enjoy.

On the one hand, the reduction in CGT rates is a mixed blessing. It will provide relief for those landlords considering selling their properties.

However, for those who’ve recently sold, it’s a missed opportunity.

Chancellor Jeremy Hunt’s apparent push for landlords to sell may boost Treasury coffers, but it leaves us grappling with uncertainty.

A lot of landlords who are gearing up to sell

While the CGT cut seems favourable, there will be a lot of landlords who are gearing up to sell because of the Renters (Reform) Bill.

This will certainly put the cat among the pigeons as landlords face a new reality of effectively losing control of their rented properties.

Instead of pushing landlords towards the door marked exit, perhaps the government could have taken this opportunity to encourage new investors into the sector.

And they could have given a not-too-subtle hint that the Bill would be redrafted to strike a balance between tenant rights and landlord viability.

That won’t happen. Nothing that benefits landlords in the current world will.

I also thought the shift in National Insurance (NI) rates was a bit like rearranging the deck chairs on the Titanic.

It’s not that long ago that we had to pay more to help meet the growing social care bill.

Which is it? Do we need more money for pensions and the NHS or not?

Sympathy for landlords with holiday lets

But I have huge sympathy for landlords with holiday lets, especially those who left the PRS to enjoy better returns.

These were better returns under a welcoming tax regime to help make up for the extra work that goes into holiday accommodation.

So, if these fed-up landlords decide to bail, what will happen?

The government seems to think that other landlords and first-time buyers will be queueing up to buy.

I doubt that very much.

I’m predicting that while some will buy pricey homes in holiday locations, they won’t be first-time buyers – a fair chunk of those sales will be to holiday homeowners.

So, the areas that pushed for this will lose out twice over – house prices won’t fall, and you’ll have fewer people spending hard cash in your shops and pubs.

Homes return to private letting to help meet demand

The other potential route is that the homes return to private letting to help meet demand and keep rents down.

This is, I fear, wishful thinking on the part of those who don’t understand how the PRS works.

Because the big issue is that landlords are watching the progress of the Renters (Reform) Bill with bated breath.

If it passes in its current form, the whistle will blow on a fire sale of PRS homes.

That will see renters evicted, the courts clogged with eviction cases, houses being sold and renting supply going downhill.

I keep referring to the unintended consequences of actions and the government, yet again, illustrates its lack of joined-up thinking.

Now here I was going to have a crack at Generation Rent saying that the removal of the relief doesn’t help tenants, but I won’t.

Impact of the Budget and the Renters (Reform) Bill

Instead, I think all landlords should focus on the lack of effort being made to explain what the impact of the Budget and the Renters (Reform) Bill will be.

I winced when I read the NRLA Budget statement about not revitalising long-term investment in rented homes because the government is focused on short term gains (it’s an election year, you dummies).

They say removing the FHL relief and reducing CGT won’t make a difference in the supply of rented homes.

The NRLA lists how many tenants apply for each home, how many homeless families we have and the social housing waiting list.

But nothing about how hard business is becoming for landlords.

No discussion about section 24.

Nothing about improving evictions to make them quicker.

I couldn’t tell the difference between this media statement and the one put out by Generation Rent.

Brutally frank conversation with the people

Landlords need to have a brutally frank conversation with the people of this country – unlikely with the mainstream media we have.

We need to explain that rising interest rates make it very difficult to remain in the PRS.

And as we leave, tenants will have to deal with higher rents and less choice.

Let’s face it, this was a Budget aimed at helping landlords sell up to benefit first-time buyers.

Holiday let landlords were probably ringing the estate agents while Hunt was still on his feet.

Plus, lots of other landlords in the PRS will have reached for their calculators and spreadsheets.

After the Budget, I thought about Emperor Nero fiddling while Rome burned to the ground.

That’s the private rented and holiday let sectors today, everything is turning to ashes and the likes of Ben Beadle and the NRLA are holding the fiddle.

Until next time,

The Landlord Crusader

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