Welcome to the last NLA Campaign Update of 2011. 

Last chance to have your say for 2011

- and win a Fortnum and Mason Hamper!

The last NLA Quarterly Survey of the year is now live. Having listened to feedback from participating landlords we have significantly shortened the survey this time around and made it much easier complete if you can't - or don't want - to anwser every question. 

 http://survey.euro.confirmit.com/wix1/p827166870.aspx 

The questionnaire should now take around 5 minutes to complete (certainly no more than 10) and every landlord who takes part has the opportunity to enter a prize draw to win a festive Fortum and Mason Hamper worth around £85 (terms and conditions apply). 

It’s the Economy Stupid!

November 2011 saw finance and the wider economy return to – if it ever left – the forefront of the political agenda and as a consequence the housing industry.

Chancellor of the Exchequer, George Osborne, delivered his Autumn Statement (known by the previous Government as  the Pre-Budget Report) to a packed House of Commons against a backdrop of pan-European economic turmoil.

Despite calls from the NLA and others in the industry to include private-landlords in expected measures to boost small business investment there were no announcements on Capital Gains Tax reform – in fact Mr Osborne took the opportunity to  freeze the amount of gains exempt from tax for 12 months at last year’s level.

There were no other new announcements of direct relevance to the PRS, although measures contained within the Housing Strategy last week were reiterated.

Key points included:

-          The Office for Budgetary Responsibility does not predict an imminent return to recession conditions

-          Growth projections revised to; 0.9% (2011), 0.7% (2012), 2.1% (2013), 2.7% (2014), 3% (2015 & 2016)

-          Public sector pay increases to be limited to 1% for the next two years

-          In work benefits to be uprated by 5.2%  from April 2012

-          Pension Age increase (to 67) brought forward to 2026

-          Credit easing to help small businesses i.e. Government will use favourable inter-government interest rates to off-set commercial lending rates for firms with a turnover of less than £50m. This is predicted to reduce interest rates for small business loans by approx. 1%

-          No plans to introduce a Tobin tax

-          Introduce an Income Tax relief of 50% for those investing £100,000 in a qualifying new start-up and relief from CGT for invested funds where applicable

-          Freeze CGT exempt amount for 12 months

-          Business rates holiday for small businesses extended to April 2013 

Regulation of Buy-to-Let:

A European Movement

A significant number of members have contacted the NLA Policy Team recently, following press coverage of the European Directive on Credit Agreements Related to Residential Property (or the Mortgage Directive) and the impact that it could have UK landlords’ businesses.

The directive, currently making progress through the institutions of the EU, could have a significant impact on the ability of landlords to access finance to fund their portfolios. However, it has not become law yet and there is still a genuine opportunity for the NLA and other interested parties to influence the legislation.

As drafted, the Directive fails to take account of the structure of the UK housing and finance markets. The NLA, with its partners across the EU, via the UIPI is working with MEPs and officials to construct targeted amendments which would satisfy those states seeking more consumer protection.

In fact amendments which would serve to restore a British lender’s ability to take future rental income into account when assessing affordability have already been drafted and are awaiting debate.

The NLA is committed to protecting the ability of  reputable  landlords who invest in property in order to run a lettings business we do not believe that they are consumers or need the same level of (potentially costly) ‘protection’ as individuals borrowing to buy their own home.

A Housing Strategy that includes the PRS

Despite numerous reviews, it seems like the Government has had no clear strategy for housing policy for a number of years – if not decades.  However, that changed in November with the publication of ‘Laying the Foundations: A Housing Strategy for England’ which outlines the Coalition Government’s perception and approach to housing (bearing in mind of course that their responsibility does not extend to the devolved nations).

Strategy at a Glance:

 £400m investment in new development, supporting house builders in need of development finance including small and medium sized builders

• Mortgage indemnity scheme designed to offer 95 per cent loan to value mortgages for new build properties in England, to support 100,000

               households

• Free up public sector land with "build now, pay later" deals for developers
• Consultation on plans to force local authorities to re-think section 106

              agreements signed before April 2010

• Right-to-buy owners will be offered a discount of as much as half the value of their homes. Social landlords to be given new powers to identify and recover properties that are being used fraudulently
• Review of  investment in the PRS
• £100m in funding to bring empty homes back into use
• Consultation on an 'empty homes premium' added to council tax
• Review of building regulations

Specifically in relation to the PRS the Government summarised their approach as:

“The private rented sector plays an essential role in the housing market, offering flexibility and choice to people and supporting economic growth and access to jobs. We want to encourage greater institutional investment into the sector, coupled with tough enforcement against rogue landlords.”

“That is why we are:

• supporting investment in homes to rent by introducing changes to Stamp Duty Land Tax and

               legislating on changes to Real Estate Investment Trusts in the 2012 Finance Bill

• marketing new Build to Rent pilot sites through the Homes and Communities Agency (HCA)
• putting in place an independent review of barriers to investment in private homes for rent
• working with industry to drive up standards and improve consumer awareness
• encouraging local authorities to make full use of the robust powers they already have to tackle dangerous and poorly maintained homes.”

As you would expect the NLA has welcomed the advent of a strategic approach to the supply of housing in England, in particular the non-regulatory approach being pursued by the Housing Minister to achieve his goals.

However, a little more detail about the support on offer to the PRS to match the enthusiasm would be just as welcome.  

Green Deal on the way

The much trailed Green Deal consultation has now been published for comment. The 238 page whopper of document kicks off the process and will shortly be followed by a raft of supplementary legislation and miscellaneous paperwork which will keep some at the NLA interested for some considerable time.

Any landlord who is not put off by the Tolstoy-like proportions of the policy making process can download a copy of the consultation below.