What will Ms Rachel Reeves be choosing in the Autumn Budget sweetie shop?

What will Ms Rachel Reeves be choosing in the Autumn Budget sweetie shop?

Our new and zealous UK government wants to refill the money box. High Public Sector wage settlements when we're already in a bit of a tangle have not really helped. So, Capital Gains Tax on non residential property looks like an easy and sweet piece of candy that'll bring in the pennies by the barrow load.

Sadly it's not, and the effect would be hugely counter productive. But why?

Housing stock standards in much of the UK are well below those of our European brethren AND rents are stratospheric in most UK regions. To maintain a target earnings ratio a landlord can manipulate rent and or the cost.

OK, and so what?

Well, landlords will invest less in maintaining - let alone elevating - the standard of their property. This means a poor outcome - for renters - over the medium to long term as dwelling quality declines and rents continue to go up.

Further, landlords will start to price in an expected future tax bill - this has already occurred as tax allowances have been cut - and this will certainly drive up rents even further. An easy decision for any landlord just now as there is plenty of existing and pent up demand. Less good if you're renter.

There is also a distinct possibility that house prices could rise faster than they would otherwise as some landlords choose to dispose of portfolios. Additional tax will be factored into the sale price. This will put much entry level property further out of reach to aspirational first time buyers.

Kicking landlords in the private rented sector (ouch!) will only have the outcome of bruising renters.

So, dear Chancellor, think with care. The sweet taste of easy candy may have a long term foul aftertaste.

Happy Friday!