Autumn Budget 2023: Key Insights for Landlords

Autumn Budget 2023: Key Insights for Letting Agents and Landlords

22 November 2023

Chancellor Jeremy Hunt recently unveiled the Autumn Statement 2023, providing a comprehensive overview of the government's plans for the upcoming year. Here are the crucial takeaways that hold significance for professionals in the property sector.

1. Local Housing Allowance Boost:

• Local Housing Allowance, determining the maximum private renters can claim in Universal Credit or Housing Benefits, is set to cover at least 30% of local market rents.
• This move aims to support lower-income tenants, benefiting approximately 1.6 million households with an average support of £800.
• The government's commitment addresses the affordability gap, impacting around 5% of privately rented homes considered affordable under housing benefit.

2. Tax Cuts for Self-Employed Landlords:

• Approximately two million self-employed individuals, including landlords, will benefit from tax cuts.
• Class 2 national insurance is abolished for self-employed individuals earning over £12,570 annually, saving around £192 per year.
• Those paying class 4 national insurance will see a reduction from 9% to 8% on all earnings, resulting in potential savings of up to £350 for self-employed landlords and letting agents.

3. Homebuilding Support:

• Increased funding of £110 million for "nutrient mitigation schemes" is geared towards building an additional 40,000 homes.
• Commitment to investing £450 million in local authorities for the construction of 2,400 new homes.
• £32 million allocated to tackle planning backlogs in key cities like Cambridge, London, and Leeds.
• These measures aim to alleviate the strain on the rental sector, where tenant demand has surged, and rental stock availability has dwindled.

4. Property Development Opportunities:

• A proposed consultation on a new permitted development right may allow any home to be converted into two flats, provided the exterior remains unaffected.
• Enhanced planning services across England with accelerated decision dates for major applications and fee refunds in case of delays may benefit homebuilders.

5. Business Rate Relief for Smaller Agencies:

• The small business multiplier is frozen for an additional year, providing relief for small businesses, including independent high street agencies.
• These measures are expected to save the average independent shop over £20,000 in the next year.

6. Higher Wages for Workers:

• The National Living Wage sees an almost 10% increase, rising from £10.42 to £11.44 per hour.
• The wage increase extends to workers aged 21 and above, impacting over 2.7 million workers and potentially influencing tenant affordability.

7. Pension Consolidation:

• The commitment to a 'triple lock' ensures an increase in the full state pension by up to £221.20 per week.
• Measures introduced for consolidating pensions aim to create "one pension pot for life," simplifying the process and potentially impacting savers in the rental sector.

These key takeaways reflect the government's multifaceted approach to addressing challenges and fostering growth within the property sector. Professionals in the industry should stay attuned to these developments as they unfold.