Research and reports
The Chancellor delivered his Spring Budget today alongside a forecast from the Office for Budget Responsibility (OBR). The statement covered the state of the UK’s economy and outlined how the government will tackle rising inflation and grow the economy.
With updates on energy bill support, tax, and pensions – read on to find out what landlords need to know from the Budget.
The Energy Price Guarantee that limits household bills to £2,500 a year has been extended for three months from 1 April. It was due to rise to £3,000 a year but the government has decided to extend the support until the summer.
With wholesale energy prices now less expensive, the cost of maintaining the support is lower than expected. Although, the £400 winter payment that reduced energy bills by £66 a month has not been extended.
If you have a tenancy agreement in place with bills included, then you’d have agreed to pass the discount on to your tenants. So make sure it’s updated to reflect this scheme continuing until 31 June.
While not specific to the rental market, some changes to pensions might affect you if you’re nearing retirement age.
The age that someone is eligible for their state pension is due to increase to 67 between 2027 and 2028 – then increase again to 68 by 2044 to 2046.
An update from the Budget is that the annual tax-free allowance has been raised from £40,000 to £60,000. This means you can now save more in your pension before you are taxed.
And the Lifetime Allowance charge has also been abolished, meaning there's no limit to the amount you can have in your pension, it won't be exposed to tax.
Both changes are a part of the chancellor’s plans to encourage over 50s back into the workforce.
In the Autumn Statement, it was announced that the tax-free threshold for capital gains tax was being reduced. From 1 April 2023, the tax-free threshold will be reduced from £12,300 to £6,000 and then will be cut to £3,000 in April 2024.
There was hope that the chancellor would reassess this change after the UK's economy began to improve, but no update has been made.
If you’re a landlord that’s considering selling a second property, It’s important to understand that more of your profits will be exposed to tax from 1 April 2023.
Many landlords were hoping for an update on the controversial Rental Reforms Bill, which plans to scrap Section 21 and give tenants increased power to challenge rent increases.
This is because the Department for Levelling Up, Housing and Communities plans to get the bill to be passed into legislation before the end of the current Parliamentary term.
The current Parliamentary term ends in May 2023 but no update was made during the Budget.
Landlords will be looking for more clarity on when and how these seismic changes will happen. Check the Knowledge centre for further developments on the rental reforms bill.
The local housing allowance (LHA) has been frozen for the last three years and the National Residential Landlords Association (NRLA) has called for the freeze to be reversed.
In their pre-Budget statement, the NRLA said the LHA rates “should be re-aligned to at least the 30th percentile of comparable local rents”. This would help tenants on Universal Credit afford their rents.
But the Budget didn’t focus on this area of benefits. Instead, an emphasis is being placed on affordable childcare.
This will likely continue to be an issue for both landlords and tenants. Come back to the Knowledge centre where we’ll cover any changes with local housing allowance.
The UK government has committed to reaching net zero by 2030 and energy efficient homes are a key part of this transition.
But there were no announcements of further support for homeowners and landlords. The chancellor’s plan relates to the UK's broader climate goals, with updates on nuclear energy and net zero ambitions.
But it’s worth checking the EPC rating for your property to make sure you’re aware of any improvements you’ll need to make. With the minimum requirements for new tenancies changing in 2025, it’s probably best to give yourself time to get your property compliant.
Read more about the UK net zero review published earlier this year.
How do you feel about the annoucements in the Budget? Let us know in the comments.
Zach Hayward-Jones is a Copywriter at Simply Business, with six years of writing experience across entertainment, insurance, and financial services. Zach specialises in covering small business and landlord insurance. He has a particular interest in issues impacting the hospitality industry after spending a number of years working as a pastry chef.
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