On 22 November 2023, the Chancellor delivered the Government’s Autumn Statement (sometimes referred to as the autumn budget) outlining plans for the year ahead and including 110 measures designed to “help grow the economy”.
Amongst these measures, there were some positive takeaways for landlords, tenants and the property market, including tax cuts for the self-employed, an increased benefit threshold for lower-income tenants, and planning incentives to encourage property development.
Key measures impacting landlords, investors and tenants:
- Local Housing Allowance increase
- National Insurance tax cuts for the self-employed
- Planning system performance reforms
- Permitted development rights to convert houses into flats
- Wage increases for some landlords and tenants
Local Housing Allowance threshold increase
Local Housing Allowance has been extended to cover 30% of local market rents, with the Government predicting around 1.6 million households will receive an average of £800 in support next year.
This allowance is used to calculate the maximum amount private renters can claim in Universal Credit or Housing Benefits. The precise claim amount varies according to location, number of bedrooms, and rental amount.
Local Housing Allowance has been frozen since 2020, despite rents rising sharply. This measure aims to address the issue of rental property affordability, with rents often constituting more than half the living costs of private renters on the lowest incomes.
National Insurance tax cuts for the self-employed
Tax cuts will be introduced for the self-employed, including abolishing Class 2 National Insurance for those earning more than £12,570 a year. This change will affect around two million self-employed people in the UK, including many landlords, typically those with larger property portfolios.
Self-employed people in this bracket will no longer be required to pay a compulsory charge of £3.45 per week, thereby saving around £192 per year. The Government also announced a 1% cut on Class 4 National Insurance for the self-employed, decreasing the rate from 9% to 8% on all earnings.
Planning system performance reforms
A premium planning service will be launched across England, with guaranteed accelerated decision dates for major applications and fee refunds wherever these are not met. Th also includes measures to improve transparency and reporting of planning authorities’ records in delivering timely decision-making.
Permitted development rights to convert houses into flats
The Government will begin consultation on new Permitted Development Rights, enabling any home to be converted into two flats provided “the exterior remains unaffected”. The consultation is to be implemented in 2024.
Wage increases for some landlords and tenants
The National Living Wage will be increased by almost 10% – up from £10.42 to £11.44 per hour. This is the minimum hourly pay workers receive, and has now been expanded to include anyone aged 21 years and above. More than 2.7 million workers will benefit from this increase.
Additional measures impacting the property sector:
Mortgage Guarantee Scheme extension
The scheme, which supports the availability of 95% Loan-to-Value mortgages, will be extended for an additional 18 months until the end of June 2025, to help borrowers with smaller deposits to buy a home.
Local Nutrient Mitigation Fund
The Government is providing £110 million of funding to support Local Planning Authorities to deliver high-quality schemes to offset nutrient pollution, unlocking otherwise-stalled planning permissions.
Affordable Homes Guarantee Scheme
The Government is expanding this scheme by an additional £3 billion to support housing associations to access cheaper loans for quality and energy efficiency works as well as new homes.
Housing Revenue Account Rate extension
This policy margin announced in Spring 2023 supports local authorities borrowing for Housing Revenue Accounts and could provide savings and additional investment in social housing.
Home buying and selling Improvement
The Government is allocating £3 million for measures to improve the home buying and selling process, including pilot projects to develop property tech products and to digitise local council property data.
Local Authority Housing Fund
An announcement of £450 million for a third round of this fund aims to deliver 2400 new housing units to house Afghan refugees and ease wider housing and homelessness pressures.
What do you think of the Autumn Statement 2023?
What are your thoughts on the measures delivered in the Autumn Statement? Did the Chancellor give enough consideration to landlords, tenants or the Private Rented Sector? If not, where did the measures fall short? Leave your thoughts in the comments below.