As we embrace the changing leaves and the cooler months, the Autumn Statement 2023 brings with it a multitude of updates that will significantly impact the realm of property investment. Analyzed by the experts at Goodlord.co, here are the key highlights that landlords in the UK should take note of.
1. Local Housing Allowance Boost for Lower-Income Tenants:
The Local Housing Allowance, vital for calculating the maximum amount private renters can claim in Universal Credit or Housing Benefits, will now cover at least 30% of local market rents. This move is expected to provide support to 1.6 million households, with an average of £800 in assistance. The announcement addresses the growing concern that only 5% of private rented homes are deemed affordable under housing benefit.
2. Tax Cuts for Self-Employed Landlords and Agents:
Around two million self-employed individuals in the UK, including landlords with larger portfolios, will benefit from tax cuts. Notably, the abolishment of class 2 national insurance for self-employed people earning over £12,570 a year will result in savings of approximately £192 annually. Additionally, those paying class 4 national insurance will see a reduction from 9% to 8% on all earnings, saving self-employed landlords and letting agents up to £350.
3. Support for Increased Homebuilding:
Acknowledging the housing demand, the government plans to invest £110 million in “nutrient mitigation schemes,” potentially leading to the construction of 40,000 more homes. An additional £450 million will be allocated to local authorities to build 2,400 new homes, with £32 million dedicated to tackling planning backlogs in Cambridge, London, and Leeds.
4. Opportunities for Property Developers:
The Chancellor proposes a new permitted development right, allowing any home to be converted into two flats, provided the exterior remains unaffected. Property developers may also benefit from premium planning services across England, ensuring accelerated decision dates for major applications and fee refunds for any delays.
5. Business Rate Relief for Smaller Agencies:
The small business multiplier freeze for another year will particularly impact small agencies with a rateable value under £15,000. This move is expected to save the average independent shop over £20,000 in the next year.
6. Increased Wages for Lower Earners:
The National Living Wage sees a nearly 10% increase, rising from £10.42 to £11.44 per hour. This will impact over 2.7 million workers, potentially influencing tenant affordability.
7. Consolidation of Pensions:
The commitment to the ‘triple lock’ ensures an increase in the full state pension by up to £221.20 a week (an 8.5% increase). Additionally, measures have been introduced to simplify pension consolidation, allowing savers to merge their savings into a single pension pot, addressing the issue of accumulating small pension pots.
As we navigate these changes, let’s explore the opportunities they bring and adapt our strategies for a resilient future in property investment.
Your insights and thoughts on these changes are valuable—let’s keep the conversation going.
