Landlord Budget and Changes to the How to Rent Guide
The Spring 2023 Budget: What’s in it for landlords?
The Budget got everyone talking, with the Chancellor Jeremy Hunt delivering his red-box briefing to a packed house. But did any of it have any sway on life for landlords? If you are a landlord with a young child, there was probably plenty in it to get you interested, but what of the details pertinent to lettings?
Well… it wasn’t the most thrilling, but not the worst either (that’s a tough act to follow given the past few years), however many of the cynics among us may question how much will be delivered before the proposed upcoming General Election which is tabled for next year. But, all that aside, it certainly wasn’t all bad news.
Landlord savings relief
The key detail was that of changes to the 50% first year allowance on Corporation Tax Relief, which has now been extended to the 31st of March 2026. The Chancellor indicated he wants to make this permanent, which is great news for landlords with larger portfolios.
The energy price guarantee has been extended for another three months, now coming to a close at the end of June 2023. This is a positive for everyone, with a typical family expected to save around £1,500 from the combination of the energy price guarantee and the additional financial support offered under the Energy Bills Support Scheme.
Not only does this support landlords with their own bills, but it should offer a real help to many tenants who may be finding it tricker to make ends meet, which in turn is positive news to any landlords concerned about potential rent arrears. That said, we still highly recommend covering your back with a solid Rent Guarantee Insurance – that little extra help from the government goes little in the way of balancing the cost-of-living crisis, and there’s still a long way to go until the economy calms itself down fully.
Greater power for local authorities
In addition, certain authorities are to be given greater powers over affordable housing programmes in their area, with Greater Manchester and West Midlands combined authorities named. It is unclear whether any further will follow. If you rent any properties in these areas, do keep an eye out for changes from your local authority.
We’ve already seen some changes in licensing in different areas of the country, with hefty fines levelled at those who do not have the correct licences for their properties. So, while we don’t know what those greater powers are or what the named authorities will choose to do with them, it’s very important to make sure that you’re keeping your ear to the ground, so you can act on any changes that you need to.
Top billing for pensions
Pensions were also given top billing. The government is planning to increase the amount you can invest in your yearly pension allowance before paying any extra tax from £40,000 to £60,000, and also abolish the lifetime allowance, which determines the amount of benefit you can receive before you have to pay tax on either pension income or lump sums. This doesn’t affect your state pension, only workplace or private pensions.
To end on a high note, the Chancellor is forecasting that the UK will avoid going into a technical recession this year. And that’s likely to mean that house prices won’t be hit as hard as they could have been. Something positive to come out of the halls of Westminster – we can’t complain about that now, can we?!
Changes to the How to Rent Guide
In other news, the new How to Rent guide has also been making headlines, and these headlines come with an important to-do for all landlords. The guide, which details the rental process and landlord’s legal obligations in England and Wales and must be provided to tenants at the start of every rental process and renewal, was due an update, with all of us eagerly awaiting its arrival on the 17th March.
However, 17th March came and went, with no sign of the new documentation, to everyone’s dismay, clearly. The guide finally arrived on 24th March.
Landlords are reminded that failure to provide an up-to-date copy of the guide at the start of a tenancy, at the point of a tenancy renewal as part of the prescribed information, or following an update will result in the landlord losing the right to issue a section 21 notice. So, it is vitally important that you get this guide out to your tenants!
The changes include elements such as details on recent legal changes such as new rules regarding carbon monoxide alarms, as well as information on fitting smart metres, and how to help ensure your property is suitable for tenants with a disability.