Today saw the Government make their Pre-Budget Report (PBR). A number of measures were introduced with the aim of stimulating the UK economy which is now predicted by the treasury to show growth of less than 1% this year and negative growth of 0.75 to 1.25% next year.
The following measures may have a particular impact on the landlord and tenant sector:
- Stamp Duty Land Tax has had no changes made to it which will disappoint much of the sector.
- Value Added Tax (VAT) has been lowered to 15% until the end of 2009. This change will take effect from Monday 1 December 2008. This will have an impact on some commercial landlords who have elected to waive their VAT exemption and on their tenants. Commercial agents will need to amend their rental demands to reflect the new VAT rate. All agents will need to amend their fees to allow for the new VAT rate.
- Government borrowing will rise to £118bn next year. This may affect the ability of larger borrowers to gain attractive terms for borrowing.
- It appears that the government is to abandon plans to end Empty Property Relief.
- All businesses will suffer slightly from a rise in the National Insurance threshold although this will not occur for some time. This may accelerate job losses across the sector as less productive staff are made redundant.
- A further sum of £100m has been provided to improve home insulation. It is not yet known whether this money will be available to assist landlords.
- The mortgage rescue scheme has been extended to include second mortgages. Depending on the terms this may assist some small buy-to-let landlords.