With the announcement of the Spring Budget, the government has shone a positive light on residential investors and, as a result, we believe new momentum will be generated for the property market. Haslams MD, Steve Woodford says:
“The statement regarding the Capital Gains Tax (CGT) is good news for our clients and the property sector as a whole. There is a shortage of quality accommodation for a growing number of tenants moving to Reading and surrounding area.”
Rather than ending on 31 March 2021, the temporary nil rate band of £500,000 will be in place until 30 June 2021. Then from 1 July 2021 to 30 September 2021 the nil rate band will be £250,000. The nil rate band will return to the standard amount of £125,000 on 1 October 2021. Steve Woodford continues:
“If the government had increased the CGT this may have then reduced the supply of rental properties. The decision could have prompted a large number of landlords to think about selling their investment property as a result.”
A secondary benefit to investors comes from the extension to the Stamp Duty holiday. There is an opportunity for our landlords to grow their portfolio further and make savings. If you buy a residential property before 30th June 2021, purchasers will only start to pay SDLT on the any sale amount above the £500,000 threshold.
Furthermore, Homelet, one of the largest tenant reference providers in the UK has confirmed that rents outside of London are growing at the highest rate on record. The data suggests that when London is excluded, the UK’s average rent is £840, showing an increase of 6.2 per cent on last year.
At Haslams we believe that the rental market will continue to be a good sector and have confidence in property investments in the long term.