Will the government listen to landlords in 2023?
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If there’s one thing we can all agree on, it’s this: 2022 was full of news, and a lot of that news was about the government – or rather governments.
It was musical chairs for prime ministers, housing ministers and chancellors alike, and all of them were distracted by various crises (of their own making, in some cases).
Now, as the world gets back to its usual rhythms after Christmas, and ministers move ahead with their plans, we’re wondering:
- What will landlords need to change or learn in 2023?
- Will this year bring better government support for landlords?
- And will the ministers show signs that they’re listening to the industry?
Perhaps the following three developments give a flavour of what’s to come.
Making Tax Digital: New deadlines announced
- Some new government guidelines on MTD have just dropped, with some changes to thresholds and deadlines
- MTD means replacing paper-based accounting with approved software and digital records
- Landlords on higher incomes need to adopt MTD first: If your landlord income is £50,000+ then you must meet the new requirements from 6th April 2026
- If your landlord income exceeds £30,000, you have to meet the requirements from April 2027. It’s likely lower thresholds will follow, although we don’t know the timelines yet
- Why the delay? The announcement explains that the government recognises that self-employed people and landlords are facing a “challenging economic environment”, so they want to give everyone more time to meet requirements
- But the extra preparation time doesn’t mean you should sit back and pick up the Christmas chocolates again – use this year to get it sorted well ahead of time. Once it’s done it’s done – and you’ll find there are benefits to you too
Reverse Section 24: Petition lands at the government’s door.
- Back in 2015 the government slashed the amount of mortgage interest relief landlords could claim
- Before the change, landlords could set the full amount of their mortgage interest against rental income, only paying tax on the remaining amount. After the change, landlords could only offset 20% of interest costs
- For many landlords, especially smaller operations, this made it much harder to turn a profit, and many landlords left the industry, driving demand even higher
- After seemingly ignoring landlords’ dismay at this change for over seven years, the government will now be forced to respond in writing, following the delivery of a petition over the requisite 10,000 signatures calling for Section 24 to be reversed
- The petition was set up by Simon Foster, a private landlord, and at the time of writing has over 21,000 signatures
- A written response from the government is due by around mid-January, so keep an eye on Mashroom.com for updates
- The petition is live until the 10th of May, and if it tops 100,000 signatures, MPs will be required to debate the topic in parliament
3. Industry experts call for stronger EPC upgrade support
- We’ve covered in detail the tighter energy efficiency legislation that’s on the horizon for the private rented sector. Plenty of landlords are worried about how exactly they will afford the necessary upgrades
- Understandably, many landlords have voiced their concerns about the cost of getting their property up to the C rating minimum due to come into effect during 2025
- The government has announced a £1 billion scheme called ECO+ in response to the energy crisis
- The scheme aims to help people insulate their homes, cutting bills and raising efficiency. Understandably it focuses on supporting those on lower incomes and in the least energy-efficient homes.
- The scheme’s offer to private landlords is very basic, causing Propertymark to call for the government to widen access for landlords.
- Propertymark warns that without more robust support many landlords will be stuck with an asset that they can’t bring up to a rentable standard. It has implored ministers to regard this moment in time as a ‘golden opportunity’ to bolster the private rented sector.
We hope 2023 will bring meaningful exchanges between landlords and the powers that be. Whatever happens, rest assured Mashroom will keep you up to date and make landlords’ lives that bit easier.