The Government’s recent Summer Statement is great news for homebuyers, but it also benefits landlords and property investors too. There are some sizeable savings to be made if you’re adding to your portfolio, plus grants for energy efficiency improvements.
The Chancellor’s statement saw more good news for landlords and property investors than we have seen for a long time, signalling a positive outlook following the COVID-19 pandemic.
Stamp Duty savings for landlords and investors
Clearly a huge benefit for homebuyers, the announcement of a Stamp Duty (SDLT) holiday also sees savings for landlords and investors. Although any second property purchased will still require payment for the additional 3% Stamp Duty as before, you will not need to pay the standard charge that accompanies it (up to £500k).
So what does that really look like for you? Well, it all depends on the purchase price of the property...
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As you can see, there are some great savings to be made, and savvy investors will be able to use the money towards refurbishment costs, stretching their budget further or to achieve a different mortgage banding and thus increase the ongoing yield.
If you would like guidance on where the investment hotspots are, please contact your local branch who will advise on yields and demand levels.
Green Homes Grant
The introduction of a grant to help landlords make their properties more energy efficient will be well-received.
Following the most recent change to EPC legislation that stated all rental properties needed an EPC rating of 'E' or better, it will give landlords an opportunity to ensure their properties are graded far higher and so further protect themselves against changes which could be seen in future legislation.
The grant offers to pay £2 for every £1 spent by the landlord up to a maximum contribution of £5,000.
The aim of the Green Home Grant is to upgrade over 600,000 homes across the UK, saving households hundreds of pounds each year on their energy bills. More details will be released in coming weeks and the scheme will be open for applications in September.
What Romans says…
Commenting on the Summer Statement and how it will impact landlords and property investors, Michael Cook, National Lettings Managing Director at Romans, says: “We, and many landlords, will welcome the news – I’m confident the changes will keep the market moving in a positive direction. There hasn’t been a huge amount on the table for buy-to-let landlords in recent years, but the announcement represents a unique window of opportunity for investors to add to their portfolio or invest in it to provide a more economical home for their tenant, whilst saving money.”
We’ve seen that residential property has shown itself to be a highly resilient asset class during the pandemic and lockdown, and has performed exceptionally well against both other property and investment classes, with high levels of rent receipts being maintained. “This combined with potential SDLT and ‘Green grants’ savings should give a lot of investors the confidence to purchase more property over the next nine months, providing further much needed-homes in the private rental sector”, he adds.