The areas of the Budget we found most interesting and will have a positive effect on Landlords Property Businesses are;
Forecast of a steady rise in economic growth will translate into growth in rental demand
Economic growth is predicted to be 1.7% for 2011, 2.5% in 2012 and 2.9% in 2013.
Less tax for Landlords running their property business through a LTD company.
Corporation Tax will reduce by 2% in April and continue to reduce by 1% every year until it reaches 23%.
Mortgage borrowing set to ease.
Banks pushed to increase credit lines to small businesses by 15%.
Stamp Duty reduced for Landlords purchasing property in bulk
Stamp Duty to be levied on the mean (average) value of properties in a bulk purchase transaction, rather than the total transaction value.
Certain regions, cities and towns to see significant increase in demand for property
21 new enterprise zones: including Bristol, Sheffield and North East
£100m to be invested in new science research and development facilities across the UK (Cambridge, Norwich, Harwell and Daresbury)
Twenty-four new university technical colleges will be funded
Other changes in the budget to note
- Inflation will be 4% to 5% this year – dropping to 2.5% next year
- Measures to help small businesses will include the removal of regulations which cost businesses £350m
- £250 million commitment to first-time buyers to help 10,000 families get on housing ladder
- Taxation on high value property is to be increased
- Real Estate Investment Trusts to be simplified to encourage home building
- Council tax freeze
Our overall “take” is that this is an encouraging budget for landlords and business owners. The measures proposed to help first time buyers are not even a drop in the ocean. Demand will continue to rise for rented accommodation particularly in areas benefiting from extra investment. Falling inflation, the council tax freeze and help for small businesses including extended rate relief are all to be welcomed. The news about Stamp Duty to be levied on mean value of property is the most encouraging for any Property Investors looking to expand their property portfolio through bulk purchases.