The Budget - Every Cloud has a Silver Lining

LONDON, June 23, 2010 - The UK's emergency budget has turned out to be much less threatening than
expected for international and domestic investors in London's residential
market - and may even provide an indirect long-term boost for the private
flat and house rentals sector.

These key points are why Benham and Reeves Residential Lettings
(www.brlets.co.uk/ ) remain upbeat:

    - Capital Gains Tax for higher income earners rises to 28% from 23 June.
      This is much better than the 40% and 50% predictions, and its
      immediacy avoids a spike in sales (and thus falling prices) in the
      period leading up to implementation. In effect, this takes us back to
      roughly pre-2008 CGT levels;

    - No CGT 'taper relief'. This is disappointing but it is a cloud with a
      silver lining. Some long-term investors will be deterred by not having
      CGT falling with the duration of their ownership; that deterrent may
      lead over some years to a reduced supply of lettings stock to meet
      demand, with upward pressure on rents as a result;

    - Higher VAT level not introduced until January 1 2011. This gives a
      useful period for landlords to implement renovation or redecoration
      programmes for their units before the 20% rate is introduced in
      the New Year;

    - The 25% reduction in the budget of the Department of Communities and
      Local Government over the next four years throws into doubt a large
      number of housing projects, exacerbating the shortage of new homes.
      This indirectly boosts demand for private rented sector properties by
      those unable to afford or find social-sector homes to buy or rent;

    - Confirmation that Holiday Lettings Tax Relief will not be withdrawn.
      This is buried in the budget but is important to those investors whose
      portfolios included holiday lettings. The last government's threat to
      stop landlords writing off improvement work against tax has now been
      buried.

"Although many individuals may feel worse off than before due to tax or
spending changes, the Budget has been relatively benign for the housing
market. Investors in London property have specific reasons to be optimistic
as the most severe effects of the public spending cuts will be felt in the
Midlands and north, not in London" says Anita Mehra, Managing Director of
Benham and Reeves Residential Lettings a London based rentals agency with ten
London lettings (www.brlets.co.uk/ ) offices.

"With no dramatic increase in stock availability through forced sales,
capital values will remain steady, thus suggesting that the current
difficulties for first time buyers will remain - a fact which inevitably
boosts the private rented sector" says Anita.

Editor's notes:

With 10 offices in the prime residential areas of London (and overseas
offices in Singapore, Hong Kong, Dubai and India), Benham and Reeves
Residential Lettings is recognised as London's largest, independent
lettings-only agency. They are also one of the only lettings agents
(www.brlets.co.uk/ ) to offer an interior design, refurbishment and
furnishing service for investment properties through their sister company
In:Style Direct.

The company is part of established property group, The Complete Property
Investment Solution, which offers a complete range of services to help
clients maximise their return on investment. With a leading sales and
acquisition agent, interior designer and furnishing company within the group,
The Complete Property Investment Solution can manage all aspects of property
investment.

    Press enquiries:
    Tracie Lack
    +44(0)20-7433-6670
    brmarketing@brlets.co.uk
    www.brlets.co.uk

Press enquiries: Tracie Lack, +44(0)20-7433-6670, brmarketing at brlets.co.uk