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𝗕𝘂𝗱𝗴𝗲𝘁 𝗖𝗼𝘂𝗹𝗱 𝗦𝗲𝗲 𝗟𝗮𝗻𝗱𝗹𝗼𝗿𝗱 𝗖𝗚𝗧 𝗕𝗶𝗹𝗹 𝗥𝗶𝘀𝗲 𝗯𝘆 £𝟭𝟱,𝟬𝟬𝟬
Potential shifts in the forthcoming Autumn Budget could deliver a significant blow to landlords, potentially resulting in an additional £15,000 Capital Gains Tax (CGT) burden on the average buy-to-let (BTL) property. This alarming projection comes from research conducted by Benham and Reeves.

Benham and Reeves explored how landlords are currently impacted by CGT under existing tax thresholds, then compared this to what could happen if these thresholds are adjusted to mirror Income Tax, a change that has been suggested as part of a possible tax equalization process.

Typically, landlords remain invested in the buy-to-let sector for around 10 years. Those considering selling up now would likely see the value of their property rise by a staggering £105,054 over the period. After factoring in various costs—such as Stamp Duty, estate agent fees, and legal costs on both purchase and sale—the net profit per property lands at £96,651.

The research highlights that landlords in regions like the East of England, London, and the South East have reaped the largest gains, with profits surpassing £100,000 per property in the past decade.

Currently, a landlord looking to exit would face a CGT bill of approximately £16,857 at the basic tax rate of 18%, or a heftier £22,476 at the higher 24% rate.

However, it's widely speculated that the upcoming Autumn Budget, slated for October 30th, will bring substantial changes to CGT, as the Labour Government seeks new revenue streams to bolster public services. This could mean CGT thresholds being aligned with income tax, a shift that would leave higher-rate taxpayers staring at a 40% CGT bill—an eye-watering 16% hike from current rates.

If these proposals take effect, higher-rate taxpayers selling their properties could see their CGT liability soar to £37,460, an increase of £14,984 from what they would currently owe. For those at the basic rate, the rise would be more moderate, about £1,873.

With CGT changes on the horizon, it’s no wonder many landlords are already restructuring their portfolios, moving their properties into limited companies to shield themselves from higher taxes. CGT applies only to properties owned by individuals, and by transitioning to a corporate structure, landlords pay just 19% in Corporation Tax—considerably lower than the current 24% CGT rate for higher earners.

If the CGT rate does jump to 40%, we could see even more landlords taking this route, significantly altering the landscape of property investment.

Marc von Grundherr, director at Benham and Reeves, commented: “Buy-to-let landlords have been targeted by a number of laws and legislative changes over recent years, all designed to reduce the profitability and tempt more landlords to quit the sector, thus, in theory, freeing up more stock for owner-occupier homebuyers.

“Whilst these changes have certainly caused some landlords to call time on their investment, it’s perhaps a tad over enthusiastic to describe this trend as a mass exodus, and many landlords continue to see buy-to-let investment as an extremely worthwhile endeavour, with many more pivoting to limited company status in order to streamline their tax affairs.

“However, our new Labour Government has made it very clear which side of the fence they wish to sit, first with the introduction of the Right to Rent bill, with it looking likely that further tax hikes are on the way in the Autumn Statement.

“It remains to be seen just what these tax changes will entail but any further attack on landlords is only likely to see private rental stock levels reduce further, exacerbating the rental crisis in the process and driving rents ever higher at the expense of tenants.”

As changes loom, the buy-to-let sector faces growing uncertainty. The upcoming budget could very well reshape the market, forcing landlords to rethink their strategies, potentially amplifying the challenges already facing the UK’s rental market.

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𝗥𝗲𝗻𝘁𝘀 𝗥𝗲𝗺𝗮𝗶𝗻 𝗔𝗯𝗼𝘃𝗲 £𝟭,𝟰𝟬𝟬 𝗳𝗼𝗿 𝗧𝗵𝗶𝗿𝗱 𝗖𝗼𝗻𝘀𝗲𝗰𝘂𝘁𝗶𝘃𝗲 𝗠𝗼𝗻𝘁𝗵

Rental income buoyancy in England persisted throughout September 2024, exceeding the £1,400 threshold for the third month running.

Data from the Goodlord Rental Index revealed that the average rental cost for a property in September stood at £1,417. While this was a slight dip from August’s figure of £1,438, it still represented a substantial increase of over 5% compared to the same time last year.

September’s rent levels were up by 5.3% year-on-year, signalling a continuing upward trend. In real terms, tenants were paying more than £70 extra per month compared to September 2023.

However, this increase was somewhat gentler than the annual hikes exceeding 7% that characterized much of 2024. This could suggest that rental prices may be cooling off, albeit slowly.

Looking regionally, the South West saw a sharp 11% increase compared to last September, whereas the North West and West Midlands experienced much more modest growth, with rents climbing by only 2% to 3%.

On a month-to-month basis, rents appeared relatively stable, with a minor dip of 1.5%, or about £21 less per month. Still, prices stubbornly remained above the £1,400 benchmark, cementing what seems to be the ‘new normal’ for peak renting seasons.

While most regions saw little change month-to-month, the South East and West Midlands noted slight rises. Greater London, however, witnessed a sharper surge, as average rents soared from £2,206 to £2,376—a hefty 8% jump in just one month.

As for voids—the period a property sits vacant before being rented—these held steady at an average of 15 days in September, mirroring August’s figures. Yet, variations emerged across regions. Voids stretched out in the South West (15 to 18 days), West Midlands (20 to 22 days), and South East (11 to 12 days). On the flip side, London saw voids shrink from 12 to 10 days, a trend echoed in the North East and North West, where voids dropped to 10 and 14 days, respectively.

In terms of tenant incomes, average salaries inched up by almost 2% in September, rising from £36,719 to £37,350. Over the course of the year, renter salaries increased by 5.55%, outpacing the 5.3% rise in rents. This means tenant earnings are finally growing faster than the costs of renting.

William Reeve, CEO of Goodlord, commented, “Rents are behaving fairly normally for this time of year—slightly down compared to August, as is often the case, but still very high.

“However, when you read between the lines, there are some signs that prices and affordability could be softening. Year-on-year figures for rent rises aren’t quite as intense as we’ve seen in recent months, and it was better news for tenants around average salaries.

“It’s too soon to tell but this could be a sign that the rental cost ‘bull run’ is starting to taper off ahead of the winter.”

This mix of mild softening in rental prices, region-specific void shifts, and tenant salary growth adds complexity to the current rental landscape. Yet, while some areas may be showing early signs of easing, for most renters, high costs remain the defining challenge.

[Kinetic Money @KineticMoney]

Season's greetings! Wishing a Merry Christmas to everyone, from the team at Kinetic Money.

Thank you for your continued support and we look forward to a prosperous 2024 for all.

[Daily Loud @DailyLoud]

A 54-year-old landlord appears to have killed 3 of his tenants inside a home in Queens on Tuesday over unpaid rent according to police.

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@buffer Thanks, that seems to have fixed it.

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@buffer I am the account owner of our Buffer account but when I log in I see this:-

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@edjames_ 2025

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@edjames_ What would you like to know?

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@HunnypotCottage Sourdough white bread. Hard to find really good sourdough bread.

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@StigAbell It's a pity our media ignores this and instead chooses to focus on the tiny minority of people flouting the rules. My experience of our local supermarket was the same,: calm and orderly and I got everything I went in for.

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Another excellent network event @brummiesnet . Thanks for organising; good to catch up with old faces and meet new!

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Now that's what I call a smart move by Klarna. Or should I say a smoooth move!
https://t.co/OpVLAgV40e

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Post Christmas blues affecting your cashflow? Bank not helping? Kinetic Money to the rescue!

There are now dozens of lenders offering unsecured business loans from £10,000 to £500,000...we'll find the best deal for YOUR business.

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@LRTechSupport I am getting 'Internal Server Error' every time I try to log in, no matter which browser I use

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@Precise_Mtgs @Roger08Roger @F4B_Finance Thanks, I will definitely be at a future event!