Autumn Statement 2023

A welcome budget by the Chancellor of the Exchequer Jeremy Hunt?

Whilst the speach covered a wide range of measures to boost the economy we have streamlined those measures to reflect our landlords in Wandsworth, Putney & Southfields being the main areas we cover.

The Autumn Statement (which is sometimes known as the autumn budget) is an annual announcement that outlines the government’s plans for the year ahead - including the state of the economy, planned spending, and revenue gathering.

This year’s Autumn Statement 2023 includes more than 110 measures to help boost the British economy, covering a huge array of topics - from tobacco duty and artificial intelligence, to apprenticeships and education. 

Here are the 7 top takeaways for landlords and lettings agents:

• Local Housing Allowance increases to support lower income tenants
• Self-employed landlords and letting agents receive tax cuts
• Measures to support increased homebuilding may alleviate pressures on the sector
• Further opportunities for property developers, including converting houses to flats
• Smaller agencies to benefit from business rate relief
• Higher wages for lower earning tenants and property professionals
• One pension pot for life to affect entire rented sector 

1. Local Housing Allowance

This is used to calculate the maximum amount that private renters can claim in Universal Credit or in Housing Benefits. This exact price that can be claimed varies depending on the area of the country, the number of bedrooms needed, and the price of rent.

The announcement means that the Local Housing Allowance will cover at least 30% of local market rents. The government has stated that this will give 1.6 million households an average of £800 of support. The Guardian reported in June that around 5% of private rented homes are considered affordable under housing benefit.

2. Self-employed landlords and letting agents receive tax cuts

The government announced tax cuts that will affect around two million self-employed people in the UK. The 2021 English Private Landlord survey estimated that 39% of landlords with five or more properties were self employed, so this will more likely affect your landlords with larger portfolios.

The cuts include an abolishment of class 2 national insurance for self-employed people earning more than £12,570 a 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.

3. Measures to support increased homebuilding 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.

4. Further opportunities for property developers, including converting houses to flats

More plans have been put in place to help property developers. The Chancellor has announced his 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.

5. 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.

You can estimate your business rates through this government tool. The Chancellor noted the government has already taken a third of properties through small business rate relief.

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. 

6. Higher wages for lower earning tenants and property professionals

The Autumn Statement 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.

7. 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%) There was also an announcement around consolidating pensions creating “one pension pot for life”.

Traditionally, employers are generally obligated to automatically enrol new staff into a pension scheme that is chosen by the organisation. The Financial Times reports that this has resulted in “tens of millions of small pension pots”. 

New measures will therefore make it easier for savers to consolidate their savings in a single pension pot.

If your a landlord who has property to let in Wandsworth, Putney & Southfields do get in touch to find our more about our services we offer 3 main services which include lettings only, lettings plus rent collection and full management. 

Your only a phone call away the rest we take care of call us now on 020 8870 5800 and ask for Matt.
 
This article is intended as a guide only, and does not constitute legal advice. For more information, visit gov.uk.