Budget talking points: Longer tenancies and full-fibre broadband
The headlines from the latest Autumn Budget were largely focused on one thing: the stamp duty cut for first-time buyers.
However, with housing taking centre stage in Philip Hammond’s speech, there were plenty of other measures outlined, including many which could directly affect the private rented sector (PRS).
Longer tenancies in the PRS?
The biggest announcement from a lettings perspective was the call by the Government for a consultation into whether longer tenancies should be standardised in the PRS.
The consultation will look at the main barriers to landlords providing longer and more secure tenancies, as well as what steps can be taken to incentivise landlords (including possible tax breaks) to offer longer, more flexible tenancies as standard.
The call for longer tenancies is not a new one – the Government’s Housing White Paper pledged to help renters by ‘working to ensure longer-term family friendly tenancies are available in the private rental sector, including working with the British Property Federation and National Housing Federation, to provide more stability for families who are currently renting’.
Is it a good idea?
Some say that longer tenancies as standard is good news for landlords, as you’ll have the security of knowing your home is let for a certain period as well as cutting the risk of costly void periods. While regular increases in rent might be less likely, this is offset by the fact your rental home is securely occupied, generating a steady stream of rental income.
Where tenancies are shorter, void periods are more likely – and these can prove very damaging to your income. Having tenants in place for 12 months, three years or even five years would help to give you – and your tenants – greater peace of mind and security.
Turning over tenants every six months could prove more stressful and a greater source of hassle (with cleaning, repairs, viewings and admin tasks all factored in), even though there are pros to the short-term approach too.
Critics of longer tenancies, however, point to the inflexibility this offers to both landlords and tenants.
For now, though, a sense of mystery surrounds this proposed consultation – with no further details given on when it will take place, how long for or who will actually be consulted.
Increased funding for 5G and full-fibre broadband
As part of plans to ensure Britain isn’t left behind in the tech revolution, the Government announced a wave of funding pledges for the digital sector. This included: £500m for artificial intelligence, 5G mobile networks and full-fibre broadband.
5G networks – seen as the next evolution of mobile data to cope with the growing use of apps and streaming services – are predicted to be trialled next year by BT’s EE.
In his Autumn Statement in November 2016, Hammond dedicated £740 million towards the development of 5G. He added a further £16 million investment in 5G research in the 2017 Spring Budget and has now gone even further.
Meanwhile, full-fibre broadband received a big funding boost in March’s Spring Budget and was given a further shot in the arm in the Chancellor’s latest address.
As a landlord, you can use this increased technology to your advantage. Nowadays, internet access is seen as an essential offering, and tenants – in particular young, tech-savvy ones – often place fast broadband speeds and strong internet access as one of their top priorities when it comes to sourcing a rental property.
If, in future, you can provide them with 5G mobile networks and full-fibre broadband, you are likely to have very happy tenants on your hands.