Buy to let landlords in the UK are being urged to take advantage of the breathing space the lack of change in the Budget relating to the private rented sector has created and look forward to incentives for offering longer tenancies.
They have been given a little bit of respite from the draconian changes of recent years and this allows them to re-evaluate their property businesses while those in the North and Midlands of England are set to benefit from infrastructure investment of £1.7 billion to transform cities.
According to Andrew Turner, chief executive of brokerage Commercial Trust Limited, there could be a higher demand for private sector rented homes in Birmingham, Manchester and Liverpool where landlords are already enjoying higher yields than those in London.
He also believes that changes to the amount of time within which recipients receive Universal Credit could reduce the number of tenants with rental arrears.
‘After a challenging couple of years, many buy to let landlords will be relieved to have the breathing space that this Budget affords them. It hopefully goes some way to building confidence,’ Turner pointed out.
Dorian Gonsalves, chief executive officer of franchise lettings agency Belvoir, pointed out that demand for rental properties is set to remain high. Indeed, the Royal Institute of Chartered Surveyors (RICS) has predicted that 1.8 million new rental homes will be needed by 2025.
He pointed out that many young people are actively choosing to rent rather than to become first time buyers and that is not necessarily going to change. ‘The reasons for renting are numerous, and many young people simply do not want the commitment of a 25 year loan,’ said Gonsalves.
‘Also many young tenants are students, or prefer the flexibility of renting to enable them to work in different locations, whilst for others it is a lifestyle choice following divorce, or a convenience for people who have embarked on a new relationship and wish to live together before committing to the purchase of a property,’ he added.
The Chancellor did make one announcement relating directly to landlords, making tax computations for unincorporated property businesses who choose to use mileage rates simpler.
The measure allows landlords the choice to use fixed rates per business mile to calculate their allowable deductions for motoring expenses, instead of deducting actual running costs and claiming capital allowances.
However, it will not be available to landlords who are companies or in mixed partnerships, that is a partnership with both individual and non-individual members.