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    29th October 2021

    What the Autumn 2021 Budget Means for Wirral Landlords

    Wednesday’s budget may have been lost amid climate talks and an almost farcical escalation of rows with France over fishing, but there were items in the Autumn budget of which landlords should be aware.

    Some of it we already knew, some of it was expected, but while the Autumn budget held few surprises, it did feature some relatively good news for landlords as a difficult year draws to an end and we begin to look to the 2022/23 financial year.

    It has seemed to be both a long and a short year from moment to moment, but this budget – the first since pandemic restrictions were lifted in July – will doubtless receive mixed reviews from UK landlords.

    1. Deadline extended for Capital Gains Tax

    Although Sunak has called for an increase in the rate of capital gains tax, there has been no increase announced during this budget. While an increase has not been ruled out, the only mention of the tax during the autumn budget was that the deadline between selling a residential property and reporting to pay tax has been extended from 30 to 60 days as of the 27th of October. The Treasury has stated that the extended payment window ensures ’sufficient time’ to report and pay the tax.

    This means that landlords looking to sell a property as part of a reduction in the stock they hold, or to use gains to reinvest in their portfolio, will not have to pay an increased rate of tax between now and the spring budget at least.

    2. Covid-19 Debt Fund

    While not specified in the budget, a concurrent announcement from the Department for Levelling Up, Housing and Communities revealed a £65 Mn fund to help tenants in rent arrears.

    Set to be operated by local authorities in England, the scheme aims to help:

    • Just under a million low-income households with rent arrears
    • One and a half million behind on council tax bills
    • One and a half million behind on electricity and gas bills

    While there are various estimates on the levels of rent arrears (even the lowest of which would outstrip the fund), there have been calls from the NRLA for the government to do more.

    3. Further promises on green investment

    We covered news that landlords were to be eligible for heat pump grants earlier in the week. However, the budget also announced that there would be further investment to complement the Heat and Buildings Strategy. These include:

    • £3.9 Bn to make buildings in England and Wales cheaper to heat
    • £450 Mn to reducing the cost of heat pumps by 25-50 per cent by 2025

    While the same is true of this as of the Covid relief package – that it’s little more than a start in the eyes of some – it does indicate that there are likely to be further incentives and schemes to help landlords reach EPC targets over the rest of the parliament.

    What this means for Wirral landlords

    Unfortunately, this is very much a ‘could have been worse’ budget for landlords throughout the UK – there could have been a capital gains tax rise, there might have been no rent arrears relief at all – but it certainly could have been better. There was no announcement on the required replacement for the Green Homes Grant, there has been no further details on how landlords will be helped to reach increasingly tough EPC targets.

    However, while in some parts of the UK there has been a move by some landlords to exit the industry or reduce the number of properties in their portfolio, the North West, North East and Wales are still providing sufficient yields to help landlords to weather what has been a bumpy ride. This has seen increased investment in the region’s rental market from outside of the local area, but with housing stock still below demand levels, the market still has room for growth.

    As such, Wirral landlords can take heart in the fact that, while the pandemic has been a mixed bag for the region – with house prices rocketing, re-let times plummeting, but rent arrears rising – there are reasons to be optimistic in the short to medium term, especially if the Wirral Council is able to secure separate, additional funding for the many environmental projects covered in its plans for the region.

    Need help managing your property portfolio? Why not speak to one of our experts? Contact Us today to see how we can help take the pain out of portfolio management.

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