Lack of direct financial support for the sector in the Budget

The Chancellor of the Exchequer, Rishi Sunak, has announced a number of measures affecting the property industry in the UK Government’s 2021 budget, but Propertymark believes more should be done in order to tackle COVID-related rent arrears.

As outlined in ARLA Propertymark’s 2021 Budget Representation, Propertymark focused on six key areas to support members:

  • Provide a financial support package for the private rented sector
  • Raise local housing allowance
  • Ensure universal credit is adequate and more effective
  • Reopen courts to deal with the backlog of housing cases
  • Support investment in the private rented sector
  • Build more social housing

Propertymark has also worked with other sector organisation's calling for a targeted financial package to help renters pay off arrears built since lockdown measures started in March last year. This will help to sustain existing tenancies and keep renters in their homes – whilst also ensuring rental debt does not risk them finding homes in the future.

18 Feb 2021
Chancellor must act to tackle rent debt crisis

Propertymark alongside other sector organisations is calling for the Chancellor to act now and agree on a targeted financial package to help private renters pay off COVID-19 rent arrears to help sustain existing tenancies and keep renters in their homes.

Universal Credit uplift

The UK Government has announced an extension to the temporary £20 per week increase to the Universal Credit standard allowance for a further six months which applies to all new and existing Universal Credit claimants and they will maintain the higher surplus earnings threshold of £2,500 for Universal Credit claimants for a further year until April 2022.

Propertymark believes that this does not tackle the fundamental issues that continue to make Universal Credit inadequate and ineffective for both tenants and landlords in the private rented sector. In order to sustain tenancies and support renters, the UK Government must do three things:

  1. tenants should have choice over whether the housing element of their Universal Credit is paid direct to their landlord.
  2. all claimants should be able to choose whether to have Universal Credit paid monthly or twice monthly to assist with budgeting.
  3. to tackle rent arrears the Universal Credit advance should be turned into a non-repayable grant from the first day of the claim. Through these changes Universal Credit can provide more flexibility and better reflect the reality of claimants’ lives, particularly those on low incomes and better support tenancies in the private rented sector.

Stamp Duty Land Tax relief extension

Since the Stamp Duty Land Tax relief was announced, Propertymark and its members have collectively lobbied the UK Government to avoid a cliff edge leading thousands of sales to fall through.

The UK Government has announced that the nil rate band up to £500,000 will end on 30 June, instead of March. A transitional nil rate band up to £250,000 will be in place until September and then return to £125,000 from October. This is great news for the industry as a whole and Propertymark is pleased that the Treasury has listened to our campaign.

Furthermore, a new mortgage guarantee scheme in April 2021 will provide a guarantee to lenders across the UK who offer mortgages to people with a deposit of just 5 per cent on homes with a value of up to £600,000.

Support for businesses announced

  • Corporation tax will increase from 19 per cent to 25 per cent from April 2023 but companies with profits under £50,000 will remain at 19 per cent.
  • £3,000 will be given to business for each new apprentice hired between 1 April to 30 September 2021.
  • The Coronavirus Job Retention Scheme (CJRS) will be extended until the end of September.
  • The furlough scheme will be extended until the end of September 2021.
  • Self-employment income support scheme (SEISS) will be extended, and eligible businesses can receive two further grants.

The Budget 2021 →

Extending the increase to the Universal Credit Standard Allowance and the furlough scheme until September will help tenants plan ahead but much more is required to avoid a mounting crisis in the private rented sector. As the impact of COVID continues to bite and unemployment rates rise, we are increasingly concerned about how tenants will avoid future rent arrears and landlords will remain incentivised to stay in the rental market. There is a real need for the UK Government to ensure a wider package of measures to help tenants and landlords keep the rent flowing.
Tim Douglas Policy and Campaigns Manager | Propertymark

Further lobbying

Propertymark will continue to lobby Government and decision-makers in the industry to make these vital changes.