2025/26 will see the Welsh Government receive its largest real-terms funding settlement in the history of devolution, however, ongoing cost-of-living and economic challenges mean that careful Budget choices must still be made. The detailed draft budget will be published on 10 December 2024, and the final Budget on 25 February 2025.
Landlords under growing financial pressure
Property owners and tenants who use well-regulated and supported Propertymark member letting agents are advantaged by their professionalism and compliance with legislation and standards. However, the ability of landlords to afford this service is compromised by challenges including the rising cost of maintenance, increasing regulatory requirements, and burdensome taxation.
Propertymark’s position paper, ‘Impact of tax changes on the private rented sector’, highlights the detrimental impact tax policy decisions have had on landlords and the sector since 2015, exacerbated even more by high interest rates and rising prices. Most of these taxation measures are reserved for the UK Government, however, we strongly urge the Welsh Government to review all property taxes and assess the impact on the sector.
We are also renewing our call for the Welsh Government to exempt new long-term rental properties from the 4% Land Transaction Tax levy on additional homes. Additionally, Ministers should consider wider access to grants and interest-free loans for private landlords to bring empty properties back into use and to incentivise decarbonisation.
Housing Support Grant (HSG)
Propertymark welcomes the increase in HSG funding for 2024-2025. The HSG is allocated to local authorities to prevent homelessness and support people accessing and maintaining suitable and stable homes. However, we urge the Welsh Government to provide a three-year indicative funding settlement for the Grant, which would increase by at least inflation each year, for a baseline of £166 million. We also advocate for local authorities to ringfence some of this funding to support engagement with the private rented sector (PRS) as a key stakeholder in tackling and avoiding homelessness.
Buyers could provide economic boost
To increase homeownership, which would have a substantial, positive impact on the Welsh economy, Propertymark recommends the Help to Buy scheme be extended to the second-hand homes market, including older properties and new builds put back on the market.
Rejuvenating high streets
According to the Welsh Retail Consortium, one in six Welsh shops is now empty, the second highest rate of vacant commercial properties in the UK.
The Welsh Government should consider a pilot of the High Street Rental Auctions scheme, which begins in England in December 2024 and gives local authorities the power to auction the leases for long-term empty properties.
Despite receiving more money from the UK Government than in previous years. The next Welsh budget will still be challenging for public finances. Given the challenges the housing sector faces now is the time to encourage investment from landlords, support vulnerable households, ensure local authorities are funded to support communities and boost our towns and city centres. This will ensure more homes, higher standards and bring economic growth across the country.
