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Ahead of the chancellor’s Autumn Statement, Brendan Sharkey, construction and real estate specialist at MHA, is calling on the government should reverse policies on EPCs and interest rate relief for buy-to-let properties.
To get the housing market moving the government should scrap stamp duty for first-time buyers and those looking to downsize to a smaller property, according to Sharkey.
He said: “This would give first-time buyers an incentive to enter the expensive property market at a slightly cheaper price. It would also allow those looking to downsize to move into smaller homes, saving money on higher mortgage payments and energy costs. As a result the housing market would have a new supply of larger properties better suited to families rather than couples.”
Sharkey believes that scrapping the EPC targets in the overhaul of net zero targets was a mistake on Rishi Sunak’s part.
He explained: “To ensure residential homes become energy efficient, the government should require a minimum EPC “C” rating for all residential sales. This will mean that when a property is sold the impact of any necessary works will be quantified and considered in the price and funding.
“Properties that do not meet the required standard should face an additional 3% SDLT charge, with the 3% only being removed and repaid once the necessary retrofitting and energy-efficient infrastructure has been introduced. This will ensure that homes become fit for purpose, boost activity in the sector and demonstrate that the industry is playing its role in the green transition despite the government U-turn earlier last month.”
To ensure we have a healthy rental market, a decent supply of properties is needed. But there is no reel incentive for new landlords to enter the market. Sharkey suggests that the government should address this issue by reversing the changes to interest rate relief on buy-to-let properties.
“We need to scrap the 20% flat rate and go back to the previous rules where landlords could deduct their mortgage interest payments from rental income earned and claim up to 40% or 45% tax relief on mortgage payments,” he said. “Introducing these reforms should increase the supply of housing and alleviate the pressures faced by UK tenants due to the strained and competitive supply of rental property.”
Sharkey added: “The planning approval process is complex, expensive and too slow which discourages the smaller builders and needs to be aligned with infrastructure projects. We need a new National Planning team to support under resourced Local Authorities. It would be able to match needs with available resources countrywide. Ultimately, it would function like a regulator and needs to be fully funded.”
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