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TODAY'S OTHER NEWS

The Treasury stands to lose almost £5bn in stamp duty amid the coronavirus crisis

The Treasury looks set to suffer a near £5bn tax hit due to the coronavirus pandemic. 

The Covid-19 outbreak has led to a sharp decline in property sales, with Savills projecting that there could be a drop of between £4.78bn and £3.47bn in the tax this year due to the existing crisis. 

With the government advising that people put their home move on hold until lockdown restrictions are lifted, housing market activity has ground to a halt. .

Before the outbreak the expectation had been that the Treasury would net £8.57bn from residential property sales in England and Northern Ireland this year. Scotland and Wales have separate systems.

 

In the worst case scenario, Lucian Cook, head of residential research at Savills, has calculated that a predicted 1.06 million house sales in 2020 will fall to 495,500, in which case prices will fall by 10% resulting in a £4.78bn slump in stamp duty. 

In the best case, the number of sales will drop to 652,634 and prices will fall by 5%, resulting in a £3.47bn drop in taxes.

Savills expects transactions and prices to improve in 2021 although they might still result in a subdued stamp duty haul for the Treasury, down by between £800m and £1.56bn on previous expectations. 

Cook commented: “A lot will depend on what happens at the top end of the property market as these represent a significant amount of the tax take for the Treasury and also what happens to the new-build market and how quick house builders can get back to work.”

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    All this is going to have to be paid for some how, income tax, vat increases in the near future.

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    • 10 April 2020 16:49 PM

    S24 will have the 20% tax credit removed.
    Mortgaged sole trader LL won't be able to offset ANY finance costs against income.

    Society won't be up in arms if Govt institutes this.
    LL need to determine if it is worthwhile remaining a LL if they can't do it without any offset at all.
    Gonna happen whether LL like it or not.
    It is an easy win for Govt who won't lose any votes doing it.
    Personally I suggest the tax take from LL via S24 etc will reduce as many LL sell up.
    Govt will find they are suffering net losses with no commensurate increases in FTB.
    They will also find TA costs massively increase as tenants are made homeless as LL sell up.

    I am having numerous enquiries for accommodation.
    None of which I can satisfy.
    All mine is taken.
    Already tenants are struggling to source properties.

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    • 10 April 2020 18:06 PM

    Seb

    The reality is that as a self-managing LL and a very good one with an excellent reputation is that I don't need to pay to advertise.
    I use spareroom

    As for a dose of reality I am able to achieve the rents I require.
    Desperate tenants have to share etc.
    My rents are the same whether one or 4 occupants.
    I charge per property not per person.

    My contact details are cast far and wide.
    So I receive many speculative enquiries as to whether I have any availability.
    Sometimes I do.
    I actively encourage this.
    Call it networking if you wish.
    I don't need to advertise as such.
    Openrent rents have nothing to do with my rents.
    I achieve what I want irrespective of what Openrent states.
    I am the arbiter of what I consider are my market rents.
    So far no problems achieving those rents.
    But I am just marking time as I wish to leave the AST PRS.

    Just far too risky for me.

    I aspire to become a lodger LL or maybe a FHL one.
    AST lettings simply AREN'T the future for me.
    Much prefer the lodger LL business model.
    Far easier to get rid of rent defaulting lodgers.

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    • 10 April 2020 18:21 PM

    Seb my excellent reputation does the rounds.
    I have lots of referrals as I am that good.
    My tenants are my clients and they are also the best unpaid salesforce I have.
    I do right by them and receive recompense in so many other ways.
    Haven't had to pay for tenant prospects for over 8 years now.
    But I would much prefer to have one unencumbered property with lodgers.
    Lodgers are easy to replace and get rid of if they stop paying rent.

     
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    It's not just the £5 billion Stamp Duty receipts that the government will lose in the lockdown ….. also VAT on payments to conveyancing solicitors, home removals companies, estate agents' fees, furniture stores, carpet/flooring stores, decorators, home improvers, etc. etc. + income tax for all their lost earnings …… it's a massive amount lost ……….

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    Or Course David is right the cost & loss of revenue is endless, the idea of raising taxes won't work, we are already taxed to the eye balls, that's why so many have thrown-in the towel even before Corona with unfair one sided tax rules and the more they load it on the more goes out of business. there was already too many milking the system because the system is designed for them, and too much sympathy for them who contribute very little or nothing the Council loves them as many same culture as themselves, everyone wants to be on the Council getting subsidized living, well the game is up. I don't let rooms but the property as a whole yet I am lumbered with Licencing Schemes which is very expensive to obtain & comply with not alone the extra encumbrances it places in me but don't apply to people who are related whatever on earth that't got to do with anything, the rules are to suit the same culture as the claimants, their friends and relation occupy many of the Civic Centers & Gov' Dept' so likely they are making the rules for themselves. I seen PM on TV saying no more than one household should be together at this sad time. However, this cannot be because of Licensing Schemes that created 2,3,4 or several Households with-in one House so no hope of one house keeping separate (excluding self contained flats) perhaps we need a new definition of a household for this sub-standard over crowned 1960's bedsit type accommodation. Also I hear so much on TV about Family's cooked up in high rise Flats with no outside garden space. Why then are you Building tens of thousands of the Stupid things all subsidized from out taxes & over priced by £50 to £100k depending on the size with dubious schemes to rope in the young generation for 35 years in some cases just to make huge profit for big Contractors & Institutions. At the same time hit us who supply proper Houses & gardens, with super taxes of several kinds and enormous Stamp Duty Land Tax, while they are exempt for now but god help them later on, come on now play the game we are not children or oblivious to what you are doing to us. I don't believe there is any shortage of Housing just hype and everyone runs with the baton.

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    Incidentally over 20'000 Homes empty in London, plus another 200'000 Homes empty in England unfortunately some people don't want to live in them as they would prefer to live in places like Mayfair or they might be at a disadvantaged.

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    eha=wos

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    • 13 April 2020 19:28 PM

    It is about time that Govt deported people to where there is appropriate housing.
    Tough if occupants don't like the area.
    All social housing and TA should be withdrawn from any who refuse to be deported to decent accommodation wherever it may be.

    We simply cannot have the feckless choosing where they would like to be.
    They should be sent where suitable accommodation exists.

    It is IRRELEVANT if it upsets their communities etc.
    They will have to create new communities to where they are deported.
    It is a national disgrace that decent accommodation is NOT being fully utilised.
    It is tough if the homeless don't want to move to these decent properties.

    They shouldn't even have the choice!
    Once ALL the empty accommodation has been used up then refurbishment of existing property should occur.
    There are streets of empty properties in the larger Northern towns.
    Rather than building rabbit hutches which is what ALL new -build properties are just refurbish existing properties.

    It is easy to knock through two empty terrace houses to make a 4 bed house.
    Instead of building stupid flats houses with a back garden of decent size should be built.
    Bring back the Parker-Morris space standards for such houses.
    To reduce demand STOP MASS UNCONTROLLED IMMIGRATION.
    Build 2 houses on a plot where 3 would be squeezed in.
    A terrace house with sufficient space to park 2 cars on the frontage is what is required in their millions.
    It has been a popular property type which has been appropriate for the masses.
    All my homes have been terrace properties as I could never afford a semi or detached property.


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    i agree--start with pakistan africa china iran albania brazil etc etc--25 million deportees=no housing shortages

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    • 13 April 2020 19:42 PM

    Yep I totally agree.
    This CV19 has proven that we need a Police State.........................we simply CANNOT have illegals in the UK who bring in disease etc and cannot be traced to be deported.
    Time for a National ID card.
    If you can't qualify for one you are deported.
    Govt needs to know who it's citizens are and where they are.
    I have no problems with a Police State.
    Not doing anything wrong I don't care if the State knows where I am or my movements.
    Doing so it can far better protect it's citizens from pandemics but borders must be defended....................with machine guns if necessary!

     
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    id cards are not the solution--they are easily forged

    proper border control and follow up of visas eg weekly attendance at plod shop would help

    i sasw programme recently of chinese man picked up with tourist visa that expired 1997--he was arrested and released--he should have been incarcerated until deportation

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    • 13 April 2020 20:01 PM

    Admittedly ID cards are not a perfect solution.
    But it won't be easy for the 2 million illegals to obtain forged ones.
    So better then nothing.

    Policing UK open borders will never work.
    You only have to see the taxi rides that illegals are given crossing the Channel into the UK by the RNLI and Border Farce cutters

    Far easier to catch illegals once in the UK.
    No ID card; detain and deport.

  • Kristin Novak

    I would be really surprised, if as many people as before would still want to come to this country, legally or illegally, and by people I mean everyone from fruit pickers to neurosurgeons to MBAs. In fact, I expect a steady stream of expats heading to the rest of the commonwealth.

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