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July 2024 Property Newsletter
18 July 2024
Property Investors & Developers
A Reminder of the Labour manifesto: What could this mean for property investors & developers?
The Labour party manifesto pledged few property-tax specific measures.
Whilst the party didn’t rule out a CGT rise, Shadow Chancellor Rachel Reeves has said that she has “no plans” to increase the tax.
What was relevant to the property sector?
The following pledges are of relevance to those in the sector:
A 1% increase to the higher rate of SDLT on purchases of UK residential property by non-UK residents;
A pledge to build 1.5 million new homes over the next parliament, facilitated by reforms to the planning sector and mandatory housing targets for councils;
A pledge to review the increased “Right to Buy” discounts that were introduced in 2012, in order to better protect the existing stock of social housing;
An “immediate” ban on no-fault evictions;
A pledge to introduce powers to enable tenants to challenge unreasonable rent increases;
Extension of “Awab’s Law”, which sets standards of social housing, to the private rental sector; and
A pledge to introduce a mortgage guarantee scheme for first-time buyers who are struggling to save for a large deposit.
In Summary
Whilst all pledges were speculative as part of the manifesto we will await for the next budget announcement to see which of the measures will be implemented and what this could mean for the future.
Bank of England interest rate to remain at 5.25%
On 20 June, the Bank of England announced that in spite of inflation hitting the central bank’s target level of 2%, the interest rate is to be held at 5.25%.
The impact of this on the housing market will become clearer as mortgage holders look to re-mortgage.
Furnished Holiday Lettings: a Reminder
The general election does not necessarily mean that the proposed abolition of Furnished Holiday Lettings (FHL) status has gone away.
What was happening before the election was called?
The abolition, set to take effect from 6 April 2025 was proposed by Jeremy Hunt in the 2024 Spring Budget.
Very little information was published, and we were yet to see further guidance or draft legislation when the general election was called.
What may change?
Whilst neither the Conservative or Labour manifestos mentioned FHL abolition, many think that both parties would seek to abolish the special tax status should they be elected.
This means that FHL owners are currently in a position where they stand to lose many of the tax advantages that they have enjoyed to date, but are unable to plan accordingly due to the uncertainty and the lack of information.
Following the Labour party winning the recent election we expect there to be a budget in either September or October 2024.
This should indicate Labour’s plans for FHLs.
What can I do now?
At the moment, we can only discuss the potential impacts of abolishing FHL status, but we will keep you updated with any developments in this area.
If you have any questions or concerns about the planned abolition of FHL’s please get in touch – we will be happy to discuss this with you.
Northern Ireland: New requirements for private rental properties
Communities Minister Gordon Lyons announced upcoming changes to the law relating to private rental properties.
The changes introduce new requirements for smoke, heat and carbon monoxide alarms.
The Private Tenancies Act (Northern Ireland) 2022 sets out the responsibilities landlords have towards their properties and tenants.
Sections 1 – 6 of the Act came into law from 1 April 2023, but Section 8 came into force on 30 May and give a lead in time of three or six months depending on whether the tenancy is new or ongoing.
What will change?
As a minimum, private rented properties must have:
- A smoke alarm installed in the room most frequently used by the occupants for general daytime living purposes, and in every circulation space on each storey.
- A heat alarm installed in every kitchen.
- A carbon monoxide alarm installed in any room or circulation space that contains a fixed combustion appliance or a flue, including any bedrooms that the flue passes through.
The alarms can be hard wired or sealed tamper-proof, and smoke and heat alarms must be interlinked.
Existing tenancies granted before 1 September 2024 must be compliant by 1 December 2024.
New tenancies granted on or after 1 September must be compliant on the date the new tenancy is granted.
The guidance notes on these changes can be seen here.
The content in this article is correct as at 18th July 2024 See terms and conditions.
