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CGT review, household expenditure savings, annual house price growth, home improvement grants

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Thanks to the release of pent-up demand, experiences gained during the recent coronavirus lockdown and initiatives taken by the government, the housing market is steadily returning to normal.

Whether you are a homeowner, looking to move home, a landlord, or tenant, therefore, it is once again worth following the latest items of news.

What follows is our own contribution to some of the latest property news headlines.

CGT review may not be good for BTL investors

Speculation is rife that buy to let investors may be hit by new rules which means they will pay more Capital Gains Tax (CGT), suggests a story by Letting Agent Today on the 15th of July.

Chancellor of the Exchequer Rishi Sunak is known to have asked the Office for Tax Simplification for a review of the rules and the latter has issued a call for evidence – currently scheduled to close on the 20th of October. On that timing, any changes to the rules might be announced as early as the planned Autumn budget.

Ahead of the Treasury’s current round of consultations, the signs are somewhat ominous as far as landlords and investors in buy to let property are concerned. The Institute for Public Policy Research – which wields considerable influence – has already made known its desire for CGT to be tightened on buy to let investments and second homes.

This is against a background in which investment properties such as buy to let have traditionally attracted lower rates of CGT because such investments involve a degree of risk-taking. Income from employment and savings, on the other hand, are much lower-risk and, so, may be taxed more heavily.

Households could save over £8,000 by the end of 2020

If the pandemic has had one silver lining, it may lie in the lessons it has taught some households in making savings by slashing non-essential expenditure, suggests a recent article in Landlord Today.

The findings emerge through differences of opinion between the charity Shelter and the trade group the National Residential Landlords Association (NRLA).

Shelter argues that the loss of employment, privations and hardships of the recent lockdown is likely to result in a slew of evictions later in the year for tenants unable to pay their rent.

The NRLA, on the other hand, disputes that conclusion. It points to the efforts made by landlords to maintain existing tenancies and to the evidence of savings already being made by households. It has been found that 71% of households in the UK have managed to save an average of £2,879 during the preceding weeks of lockdown. If that level of saving is maintained throughout the year, it could result in households having saved as much as £8,000 each.

Annual house price growth

Despite encouraging signs of a return to a new normal in the housing market, Property Wire on the 15th of July broke the news that house prices are down 0.1% over the year to date as the effects of the pandemic begin to show.

It is the first time that the market has experienced such negative annual growth since 2012. The latest data shows that there were 50% fewer property transactions during May than in the same month one year ago.

Mortgage lending has also suffered, with only 9,300 new loans approved during May, compared with 73,700 in February – a significant 86% fall in mortgage lending compared with May 2019.

More private renters satisfied with their housing

The latest edition of the English Housing Survey records an increased level of satisfaction among tenants with their private rented accommodation, reveals the National Residential Landlords Association (NRLA).

The survey shows that 84% of tenants in the private rented sector are satisfied with their housing – a proportion that is one percentage point higher than the previous year and greater than the 81% of tenants who expressed satisfaction with their accommodation in the social rented sector.

The responsiveness of private sector landlords was also illustrated by the fact that 73% of tenants expressed satisfaction with the carrying out of repairs and maintenance – compared to 67% in the social sector.

Landlords and homeowners can get £5,000 to improve their property

With effect from this coming September, an extra £2 billion will be on the table in the form of government grants for homeowners and landlords for energy efficiency improvements, says the Buy Association on the 13th of July.

The release of additional funding was announced during the Chancellor’s mini-budget on the 8th of July.

The grants will cover up to two-thirds of the cost of energy efficiency improvements to homes, up to a total of £5,000.

Landlords who apply for such grants to improve their property do so in the knowledge that a “greener” home may prove more attractive to prospective tenants – so increasing the demand for energy-efficient rented accommodation.