Rachel Reeves and her husband ‘are making £74,000 a year in rental income from two properties’ – despite hammering landlords in tax bomb Budget_Nhy
Rachel Reeves and her husband are reportedly collecting £74,000 a year in rent from two properties – despite hammering landlords in this week’s Budget.
Stamp duty costs shot up from three to five per cent in the Chancellor’s first Budget on Wednesday, targeting landlords and homeowners buying a second property.
Critics of the move warned the surcharge on extra properties ‘makes no sense’ and would ultimately see the costs pushed onto tenants.
Rachel Reeves and her husband will themselves be affected by the change, already effective, as the Telegraph reports they collect more than £6,000 a month in rent.
The outlet reports that Ms Reeves and partner Nicholas Joicey let out their four-bedroom home in south London for around £3,200 a month, having moved into Downing Street.
Mr Joicey is also believed to have let his two-bed flat in central London, with a market rental of nearly £3,000 a month, according to the Bricks&Logic property website.
Rachel Reeves stands outside Number 11 Downing Street with the red Budget box on Oct 30
Nick Joicey is Chief Operating Officer and Second Permanent Secretary at Defra
Mr Joicey is believed to have rented out his flat since 2011, the Telegraph understands.
A monthly income of £6,200 would scale up to £74,400 over a period of 12 months.
Ms Reeves has faced backlash from landlords over changes announced in Wednesday’s Budget.
Effective from October 31, those purchasing additional properties have to pay a five per cent surcharge.
This is a two percentage point increase of the current 3 per cent surcharge, with Ms Reeves boasting the move will benefit other homeowners.
The Treasury forecast that the increase in the surcharge could earn £310million per year by 2029-30.
But critics suggested the additional costs facing landlords with multiple homes could end up being pushed onto tenants.
Responding to the increase in the surcharge on additional properties, Ben Beadle, of the National Residential Landlords Association, said: ‘Hiking stamp duty on homes to rent when 21 people are chasing every rental property makes no sense.’
‘The Chancellor has failed to heed the warnings of the Institute for Fiscal Studies that higher taxes on the rental market lead only to rents going up.
‘What tenants needed was a Budget to boost the supply of new, high-quality rental housing. What we got is a recipe for less choice and higher rents.’
Craig Fish of Lodestone Mortgages said: ‘This is another nail in the coffin of buy-to-let.
‘Transactions in process are now at real risk as investors may well pull out and this will have a negative impact on any property chains where a buy-to-let is involved.
‘This is going to have a further negative impact on housing stock, pushing rents higher.’
The Chancellor also made no announcement on extending the current discount on stamp duty, which was introduced by the Tories in 2022.
It means, from 31 March next year, home-buyers face paying thousands of pounds more in stamp duty.
An analysis by Savills showed first-time buyers in London would pay an additional £6,250 from 1 April, on average, when the tax-free threshold reduces.
Across the whole UK, the ending of the temporary stamp duty discount will see an extra £2,500 paid on the average home purchase.
Property experts warned of Britons rushing to complete home purchases before the cliff-edge deadline at the end of March.
The Prime Minister sparked fury in the lead-up to the Budget by suggesting landlords, shareholders and savers did not count as ‘working people’ – and thus would not be protected from tax increases per Labour’s manifesto.
Labour’s election manifesto maintained that the party ‘will not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT’.
Asked on Sky News whether ‘someone who works but gets their income from assets as well, such as shares and property’ qualified, Sir Keir Starmer replied: ‘Well, they wouldn’t come within my definition.’
He defined working people as somebody who ‘goes out and earns their living, usually paid in a sort of monthly cheque’ but they did not have the ability to ‘write a cheque to get out of difficulties’.
Ms Reeves delivers her Autumn budget statement in the House of Commons on October 30
Keir Starmer leaves Downing Street ahead of Prime Minister’s Questions on October 30
Amid public backlash, Downing Street was forced to clarify that Sir Keir had meant people who ‘primarily get their income from assets’.
‘He’s accepting that people have some savings. Those might be cash savings, or stocks and shares ISA savings or whatever,’ the Prime Minister’s spokesperson said.
‘So it’s not precluding people that have a small amount of savings. Those individuals clearly are working people.’
The Chancellor has since conceded that workers would be hit by the knock-on impact of her Budget, which will raise taxes by £40 billion a year.
She insisted: ‘I said that it will have consequences. It will mean businesses will have to absorb some of this through profits and it is likely to mean that wage increases might be slightly less than they otherwise would have been.’
Ms Reeves urged firms to accept reduced profits rather than squeezing staff wages.
