In a bid to get the housing market moving The Chancellor, Rishi Sunak made two big announcements: namely on Stamp Duty and Energy Efficiency Standards. Whilst this was welcome news for Investors, as ever the devil is in the detail. In this week’s article, I share with you the pros and cons.
Stamp Duty holiday for 1st time buyers and Investors
The announcement made the headlines with the Chancellor’s statement that the threshold will now be raised up to £500,000. This means that first time buyers will be exempt from paying any stamp duty on their purchase, depending on the price of the property. Landlords, however, will still be liable for the 3% surcharge. Therefore, an investment property costing £500,000 will have Stamp Duty cut from £30,000 to £15,000.
This Stamp Duty holiday comes to an end in March 2021 with the Chancellor’s announcement earlier in July mirroring the opening of all the sectors within the Economy.
What does this mean for Investors?
Despite this sweetener for the Housing Market, the fundamentals of property investment remain the same, i.e. it’s all about buying at the right level.
Whilst most local markets have shown to be robust, it pays to get the most recent local property market intelligence. This is market driven data that gives you an insight on the developing trends and what is happening locally. If you have an Investment property in mind, I’d be happy to express an opinion and give you the latest data for the local market, including a Hometrack report that is relied upon by 85% of Lenders. You can email me [email protected]
Green Homes Grant
The second item on the agenda is the Green Homes Grant. This is to help make your investment more energy efficient, thus reducing running costs whilst being kinder to the environment.
Full details on the scheme are still to come, but, in essence, landlords can get a grant that covers two-thirds of the cost of energy efficiency improvements up to the value of £5,000. The scheme covers insulation, eco-friendly boilers, double glazing, draught-proofing, solar panels, and heat pumps.
The Government has promised the dedicated website will be up and running by September in readiness for the scheme with all the frequently asked questions and how to claim your grant. The works will be quoted for by local suppliers and once approved, a voucher will be issued.
There has been a rumour , and it is just a rumour that there may be a change on the Minimum Energy Efficiency Standards in 2021 pushing the requirement up to a Grade D for rental homes. Tenants have become far more cost conscious about household utilities in recent times. Homes with low running costs always win out against the competition. This will also work to your advantage should you sell up in the future making your property attractive to buyers.
For an up to date analysis on the rentals market and how to make your investment more energy efficient, talk to us here at Ashmore Residential. Our goal is to help you maximise the income potential of your investment, whist keeping you on the right side of the law.