Digital Book version: http://www.landlordzone.co.uk/digital-book/MayJune10/index.html
Editorial:
Landlords can look forward to operating their businesses under a new coalition government regime, which is likely to be very different.
Whether this changes things for the better remains to be seen, but so far the signs are quite good.
We’ve been saying for some time now that the increasing red-tape and bureaucracy, either already effective or planned, by the outgoing government, was in the main detrimental to both business and to landlords.
Given the new coalition government’s stated aims of cutting red tape and reducing the deficit, the impact on landlords will be both positive and negative. Certainly, the abandoning of HIPs and the proposed landlords’ register, and a block on more red-tape is a very good start.
Good news for many will be the commitment to review the new Planning Use (class 4) regulations brought in by the out-going government, confirmation in the emergency Budget (see pages 10 & 11) that Furnished Holiday Let tax changes are to be cancelled, plus the better than expected Capital Gains Tax (CGT) changes.
However, landlords in London and the South East will be most affected by the proposed review of Housing Benefits, but it has to be acknowledged that there are some real anomalies in this very expensive scheme despite the introduction of a complex Local Housing Allowance (LHA) system.
Many landlords are still looking to invest as they appear to have largely weathered the storm; the economy and the housing market appear to have stabilised, interest rates remain low and rental demand is still strong and likely to remain so.
However, obtaining finance at the right price is very difficult and lenders criteria appears to be stacked against business portfolio landlords, favouring one-off buy-to-lets. As the economy struggles to recover, any further rise in unemployment will inevitably lead to more repossessions and tenant defaults – we are not out of the woods yet.
Despite earlier fears, the budget has been relatively kind to business and property investors. Whilst the VAT increase and increasing income tax through the freezing of allowances for 3-years will have their effects on activity generally, the rise in CGT for high rate tax payers to 28% should not have a great impact on investment.
The Avoid the Voids Webinar hosted by UPad which I took part in recently was highly successful (see Page 7) resulting in more of these events being planned in the near future.
Tom Entwistle – June 12010
Content provided by Legalhelpers Limited – www.legalhelpers.co.uk
Budget Analysis provided by: TWD Accountants – http://twdaccounts.co.uk
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