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Budget 2021 – What does it mean for the PRS?

3rd March 2021

Billed as a Budget to boost the economy, today’s statement from Chancellor Rishi Sunak held few surprises. While measures such as the extension to the furlough scheme and continuing £20 uplift to Universal Credit are a welcome support for renters, there was still very little for the private rented sector. Government’s message that it wants to turn Generation Rent into Generation Buy was loud and clear in today’s Budget.

Read the Budget 2021 in full

Key points:

Support and Employment

  • Universal Credit – Six-month extension of the £20 per week Universal Credit uplift in Great Britain, with the Northern Ireland Executive receiving additional funding to match the increase. A one-off payment of £500 to eligible Working Tax Credit claimants across the UK.
  • National Living Wage – Increased to the equivalent of almost £350 a year
  • Furlough Scheme extended to September – Employees will continue to receive 80% of their wages until the scheme ends, but employers will be asked to contribute 10% in July and 20% in August and September as the scheme is gradually phased out.
  • Grants for self-employed extended to September – The income support scheme has been extended, including grants for the newly self-employed who filed a tax return in 2019-20 now able to claim for the first time.
  • Extension of the apprenticeship hiring incentive in England to September 2021 and an increase of payment to £3,000. £7 million for a new “flexi-job” apprenticeship programme in England, that will enable apprentices to work with a number of employers in one sector.

Housing

  • Stamp Duty Cut – Extended to June 30th and then tapered until 30th September.
  • Mortgage Guarantee Scheme – A new mortgage guarantee scheme will enable all UK homebuyers secure a mortgage up to £600,000 with a 5% deposit.

Business

  • Business rates holiday – Extended through to the end of June. For the remaining nine months of the year, business rates will still be discounted by two thirds, up to a value of £2m for closed businesses, with a lower cap for those who have been able to stay open.
  • Corporation Tax – From April 2023 the rate of Corporation Tax paid on company profits will increase from 19% to 25%. Companies with profits under £50,000 will remain at 19%, meaning only 10% of companies will pay the higher rate
  • Statutory Sick Pay (SSP) – Small and medium-sized employers in the UK will continue to be able to reclaim up to two weeks of eligible SSP costs per employee from the Government.

Responding, Isobel Thomson, safeagent Chief Executive, said:

“It has been an incredibly tough 12 months for many in the private rented sector, and while it is positive to see additional support such as the extension of  furlough and the Universal Credit uplift, this Budget leaves a gaping hole in financial support for the PRS.

“We first raised the proposal of grants for landlords in August 2020 – in line with grants for other self-employed people. It is a real concern that this Budget failed to offer any support for private landlords who are crucial to providing homes in the PRS. Over the last year they have been asked to shoulder an unsustainable burden of risk without Government help and today’s announcement offered no change to this. The Government’s commitment to turn Generation Rent into Generation Buy is laudable in the longer term but what happens in the meantime?”

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