Some takeaways from Jeremy Hunt’s Autumn Statement –
Unfreezing Local Housing Allowance Rates. LHA to cover at least 30% of local market rents. The government has stated that this will give 1.6 million households an average of an extra £800 per year.
Self-employed landlords and letting agents to receive tax cuts. The cuts include an abolishment of class 2 national insurance for self-employed people earning over £12,750 per year. This means that affected self-employed people will not need to pay a current compulsory charge of £3.45 a week – saving around £192 a year. Meanwhile, self-employed people who pay class 4 national insurance will now pay 8% (rather than 9%) on all earnings. Taken together, these measures will save self-employed landlords and letting agents up to £350.
Measures to support increased homebuilding. This may alleviate pressures on the sector. The government has committed to spending more money on building new homes and relaxing planning rules. The Chancellor committed to investing £110 million into “nutrient mitigation schemes”, which could lead to the building of 40,000 more homes. There was also a commitment for £450 million worth of funding to local authorities to build 2,400 new homes, and a £32 million investment to tackle planning backlogs in Cambridge, London, and Leeds.
Opportunities for property developers, including converting houses to flats. Intention to consult on a new permitted development right, enabling any home to be converted into two flats, so long as “the exterior remains unaffected”. Meanwhile, homebuilders may benefit from new premium planning services across England with guaranteed accelerated decision dates for major applications, and fee refunds wherever these are not met.
Smaller agencies to benefit from business rate relief. The small business multiplier has been frozen for a further year. This affects small businesses – likely agencies – whose rateable value is under £15,000. These rates may impact independent high street agencies, with Jeremy Hunt stating that these measures would save the average independent shop more than £20,000 over the next year.
Higher wages for lower earning tenants and property professionals. Confirmed increases of almost 10% to the National Living Wage, from £10.42 to £11.44 an hour. The National Living Wage is the minimum hourly pay workers receive, and has now been expanded to include anyone 21 years old and above. More than 2.7 million workers will benefit from this increase, which may impact tenant affordability.
One pension pot for life to affect entire rented sector. Multiple announcements were made regarding pensions, including a commitment to the ‘triple lock’ which increases the full state pension by up to £221.20 a week (up by 8.5%).
The government-backed 95% Mortgage Guarantee Scheme has been extended until the end of June 2025 – 18 months longer than previously agreed.
Universal Credit and other benefits to rise from April by 6.7%.
Article Abridged from GoodLord & Landlord Today