Spring Statement Supports Eco-Improvements
While the Chancellor ignored the impact of rising rents in his Spring Statement, he has made eco-updates cheaper.
Last week, Chancellor Rishi Sunak shared his Spring Statement, revealing a 5% rate cut on energy saving materials. This takes VAT on materials like solar panels and heat pumps down to 0% for five years, in a move to help households improve energy efficiency and lower their heating bills.
Home Emergency Insurance for £130
- ✓ Covered up to £1,000 per emergency
- ✓ £250 for overnight accomodation
- ✓ Call out, labour & parts included
The Chancellor said a ‘typical household’ would save more than £1,000 in taxes a year by having roof-top solar panels installed and more than £300 off their energy bills.
These reductions would take effect from April and run for the next five years, and eligible home improvements include:
- Air source heat pumps
- Insulation
- Solar panels.
The Federation of Master Builders, and other industry campaigners, have long advocated such VAT reductions, which they say will help to incentivise homeowners to make energy-efficient improvements to help them cut heating bills.
There has already been an increase in the demand for products, due to a rise in energy prices, according to Jonathan Murton, Director of energy efficiency consultants Murton & Co.:
I suspect there will be frustrations though, as we are already seeing orders not yet fulfilled due to increasing backlogs and lead times.
Has the Chancellor helped the poorest households?
Among other announcements in the mini budget, Sunak also announced a cut in fuel duty by 5p and a reduction in the basic rate of income tax from 20p to 19p in the pound from 2024.
The amount people earn before they pay National Insurance was also raised to £12,570 a year.
The National Residential Landlords Association said it was ‘disappointed’ that the government failed again to explain to the rental sector what was required of it when it came to energy improvement requirements. Chief Executive Ben Beadle said:
More broadly, as renters, along with all others, face a cost-of-living crisis, the Chancellor should have reversed his decision to freeze housing benefit rates. Without this, those relying on the benefit will find it increasingly difficult to afford their rents.
Alicia Kennedy, director of Generation Rent agrees, stating that ‘When inflation is running at 7.4%, the Chancellor should have targeted help towards those least able to manage, by raising benefits at the same rate and making sure Local Housing Allowance covers rising rents.’
How can you cope?
As the cost-of-living crisis bites for everyone, there are some things that landlords can do to weather the storm:
- Protect your investments. Cover yourself with Rent Guarantee Insurance, in case of any missed payments and make sure you have Home Emergency Insurance, so you’re not out of pocket if anything befalls your properties
- Check in on your mortgages. When is your remortgage due? Could you get a better rate and save some cash? Book in with our remortgage specialists and find out
- Track everything. Save all of your documentation in one place, like our free Document Storage tool, so you aren’t caught out by missing certification. And track all of your incomings and outgoings in our free Expense Tracker so you can spot where you can save.
