Date Published 22 November 2023
As we approach the end of the year, we'd like to provide you with a comprehensive overview of the key highlights from the Autumn Statement 2023, also known as the autumn budget. This annual announcement outlines the government's plans for the year ahead, encompassing various aspects of the economy, planned spending, and revenue generation.
1. Local Housing Allowance Increases to Support Lower Income Tenants
Local Housing Allowance (LHA) is a critical factor for private renters claiming Universal Credit or Housing Benefits. The Autumn Statement introduced a significant change: LHA will now cover at least 30% of local market rents. This initiative is expected to support approximately 1.6 million households, providing an average of £800 in support. This adjustment aims to address the issue of affordable housing, with only around 5% of private rented homes considered affordable under housing benefit.
2. Self-Employed Landlords and Letting Agents Receive Tax Cuts
Around two million self-employed individuals in the UK, including landlords with larger portfolios, will benefit from tax cuts. Notably, class 2 national insurance is abolished for self-employed individuals earning more than £12,570 annually, saving them approximately £192 per year. Additionally, those paying class 4 national insurance will now contribute 8% (down from 9%) on all earnings. These measures collectively provide significant financial relief to self-employed landlords and letting agents, with potential savings of up to £350.
3. Measures to Support Increased Homebuilding May Alleviate Pressures on the Sector
The government is committed to addressing the growing demand for rental properties by investing £110 million into "nutrient mitigation schemes," which could result in the construction of 40,000 additional homes. Tenant demand continues to rise while rental property availability struggles to keep up. The allocation of £450 million to local authorities for building 2,400 new homes and a £32 million investment to tackle planning backlogs in key areas like Cambridge, London, and Leeds signifies a positive step toward easing the pressures in the housing sector.
4. Further Opportunities for Property Developers, Including Converting Houses to Flats
Property developers will benefit from new initiatives, including consultations on a permitted development right allowing any home to be converted into two flats while preserving the exterior appearance. Moreover, homebuilders can expect premium planning services and accelerated decision dates for major applications, along with fee refunds if these deadlines are not met.
5. Higher Wages for Lower Earning Tenants and Property Professionals
The Autumn Statement confirmed nearly 10% increases to the National Living Wage, raising it from £10.42 to £11.44 per hour. This wage increase extends to individuals aged 21 and above, benefiting over 2.7 million workers. The impact on tenant affordability and financial stability is substantial.
6. One Pension Pot for Life to Affect the Entire Rented Sector
The Autumn Statement introduced several pension-related changes, including a commitment to the 'triple lock,' which boosts the full state pension by up to £221.20 per week (an 8.5% increase). Additionally, plans to consolidate pensions into a single pension pot will simplify the retirement savings landscape, making it easier for individuals to manage their pension funds.
We hope you find this summary of the Autumn Statement 2023 informative and insightful. These measures reflect the government's efforts to support various sectors, including housing, self-employment, and pension management.
If you have any questions or require further information on any of these topics, please feel free to contact us. We are here to assist and provide guidance as needed.