How Landlords Are Affected By 2015 Pre-Election Budget
During the pre-election budget last week, Chancellor of the Exchequer, George Osborne MP announced some significant changes that could have a detrimental impact on landlords the UK’s private rental sector (PRS) and residential property owners.
Below are the highlights of the pre-election budget that are of relevance to landlords and property owners:
- £13 Billion (GBP) sale announced of the mortgages of UKAR – Northern Rock and Bradford and Bingley (Mortgage Express) to reduce national debt which followed the bailing out of the banks.
- Introduction of 20 new housing zones.
- The economy of the North grew faster than the South during 2014.
- The UK has the highest rate of employment in its history!
Employment is growing fastest in the North West, Yorkshire having the biggest employment.
- Living standards are higher in 2015 than 2010.
- Inflation forecast downgraded to 0.2%.
- Low interest rates to be “locked in”.
- Original target of debt reduction set in 2010 budget has been met.
- 13 years of rising national debt has now been stopped.
- UK achieved the largest and most sustained debt reduction of any major economy according to the IMF.
- Government borrowing is falling.
- The wealthy are making the biggest contributions to reduce debt.
- End of austerity in 2019.
- The annual tax return is to be abolished. New digital tax accounts to be created.
- The personal tax free allowance has been raised to £10,600 (GBP) and will be raised to £11,000 (GBP) in 2017.
- The higher rate tax threshold will rise to £43,300 (GBP) by 2018.
- Class 2 national insurance contributions abolished for self-employed.
- Stronger measures against tax avoidance and tax evasion.
- Review of avoidance of inheritance tax through deeds of variation.
- New penalties for tax evasion and those professionals who assist them.
- Crime down 20%.
There was some good news contained in the 2015 pre-election budget too:Manchester was mentioned in measures to build up the northern economic powerhouse whilst the Midlands get the go-ahead for £60 million investment in energy research. A new rail franchise was announced to improve rail services to the South West. £7 Billion (GBP) has been allocated for investment in infrastructure.
The Chancellor also pledged to keep improving mobile phone networks as well as providing funding for free wi-fi in libraries and plans for ultra-fast broadband to keep Britain in front in a new strategy for digital Britain.
Mr Osborne also outlined 4 major new steps intended to create a savings culture in an attempt to build the country’s future economy on savings instead of debt
- 5 million pensioners to get access to their annuity.
- Introduction of radical new ISA.
- Creation of new “Help to Buy” ISA for first time buyers. For every £200.00 you save for your deposit, the Government will top it up by £50.00.
- Introduction of new personal savings allowance – first £1000.00 of savings will be tax free. 95% of savers to be taken out of savings tax.
However, the 2015 pre-election budget represents a nightmare for landlords and tenants, as there are no plans to extend the financial support for energy improvements in private rented sector properties and the Chancellor announced measures that will allow subletting of rented property that could potentially create chaos.
Energy and landlord organisations had called upon the Chancellor to extend the Landlord’s Energy Savings Allowance (LESA) which was originally due to end next month (April 2015). LESA has already played a key role in supporting landlords to improve the energy efficiency rating of their rental properties, but the failure to continue the allowance means improvements will now only be financed on the back of tenants through their energy bills as contained within the Green Deal.
The 2015 Pre-Election Budget in 72 seconds
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