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industry news


Regulation fees to be charged from October


Stamp duty income surges


The Government is being urged to rethink its PRS tax changes after official figures show the new stamp duty surcharge raised more than a billion pounds in its first nine months of operation. It had been predicted the three per cent


surcharge (introduced last April) on the purchase of additional homes, would bring in an additional £630m in its first year. But HMRC figures show that in its first nine months the tax raised £1.19bn, more than £560m over the forecast for the whole year. If the collection rate continues income for


the year will exceed £1.58bn, nearly £1bn more than the original projection. After the Autumn Statement, the Office for Budget Responsibility predicted that in its first four years the extra levy would bring in £3.1bn more than forecast. The Residential Landlords Association has


T


he social housing regulator has delayed the introduction of fees by just six months to October this year, following a


consultation conducted in late 2016. Fees have also been marginally reduced from


£5 a property to £4.72. Providers will only pay 50 per cent of the annual fee for 2017/18 because of the delayed start. These changes have been welcomed by the National Housing Federation, which opposed their introduction and viewed them as cutting resources available for investment in new homes. The regulator was granted powers to charge


fees under the Housing and Regeneration Act 2008. It set out proposals firstly in a discussion paper in 2014 and held a further statutory consultation at the end of 2016.


The regulator will introduce: • A one-off flat-rate registration fee of £2,500 for successful registration with the regulator;


• A fixed annual fee of £300 for providers with fewer than 1,000 social housing properties; and


• An annual per unit fee of £4.72 for large providers with 1,000 or more social housing properties – with the fee charged at group level rather than for each individual entity on the register.


The regulator has also committed to: • Waive fees for 2017 to 2018 for providers with fewer than 60 social housing properties, where a complete de-registration application is made by 1 September 2017 and it has a reasonable chance of being completed by the financial year end;


• A cap on the maximum increase to total income raised from fees to one per cent per annum until the end of current Spending Review period in 2020 from a base of £12.5 million; and


• Introduce a Fees and Resources Advisory Panel and publish an annual fees statement in addition to the transparency information it already publishes.


Julian Ashby, chair of the HCA Regulation


Committee said: “I’m pleased to see a high level of support for our proposals, which were described as fair, simple, transparent and practical. In our approach to implementing fee charging we have carefully considered the impact on existing budgets and business planning for 2017/18 and noted the affordability challenges raised by some of the very small providers.


“We will establish a Fees and Resources Advisory Panel to ensure that there is accountability for fees charged” – Julian Ashby


He added: “Introducing fee charging


complements the HCA review conclusion to establish the regulator as a separate legal entity. We’re committed to keeping our costs low and therefore the fee level reasonable and proportionate, while maintaining effective regulation. We will establish a Fees and Resources Advisory Panel to ensure that there is accountability for fees charged.” There were 169 responses to the consultation,


which ran from 25 November 2016 to 9 January 2017. The regulator also consulted extensively with sector representative bodies. Funding for some aspects of the regulation


function such as reactive regulation, including consumer regulation, will be continued through Government grants.


12 | HMM March 2017 | www.housingmmonline.co.uk


called on the Government to use the extra stamp duty revenue to scrap its planned changes to mortgage interest relief. The RLA said this will prevent landlords from selling up or having to increase rents. An RLA survey has found that 58 per cent


of landlords are considering reducing investment in their rental properties because of the changes, while 66 per cent feel the tax changes will place upwards pressure on market rents.


“At no stage has evidence been published to support the assertion that landlords are taxed more favourably than homeowners”


Windfall


The RLA also believes the Government should pause the start of the introduction, scheduled from April, of the mortgage interest changes to enable a better assessment to be undertaken of the likely impact of the policy. RLA policy director, David Smith, said: “In


raising nearly twice as much in just nine months as the tax was predicted to make in one year this stamp duty windfall gives the Government a chance to back the rental market and support the development of new homes which we desperately need. “At no stage has evidence been published


to support the assertion that landlords are taxed more favourably than homeowners, or that they are squeezing first time buyers out of the market. “The Government has received far more


money than it expected. We urge them to use this to support the country’s tenants and undertake a fuller impact assessment of a policy that has the potential to cause untold damage to the rental market.”


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