The Government's Autumn Budget has unveiled a series of measures impacting the property sector. Here, we dissect the key announcements that directly impact landlords, tenants, and the housing market at large.
1. Local Housing Allowance Threshold Increase:
Local Housing Allowance has received a significant boost, now covering 30% of local market rents. Approximately 1.6 million households are expected to benefit, receiving an average of £800 in support. This measure addresses the pressing issue of rental property affordability, especially for those with lower incomes.
2. National Insurance Tax Cuts for the Self-Employed:
A welcome change for the self-employed, the Government plans to abolish Class 2 National Insurance for those earning more than £12,570 per year. This move is poised to benefit around two million self-employed individuals, including landlords with larger property portfolios. Additionally, a 1% cut on Class 4 National Insurance for the self-employed, reducing the rate from 9% to 8%, has been announced.
3. Planning System Performance Reforms:
A premium planning service will be introduced across England, offering accelerated decision dates for major applications and fee refunds if deadlines are not met. This reform aims to enhance transparency and reporting in planning authorities, streamlining decision-making processes.
4. Permitted Development Rights for House Conversions:
The Government will initiate a consultation on new Permitted Development Rights, allowing any home to be converted into two flats, provided the exterior remains unaffected. This move, set to take effect in 2024, could reshape the housing landscape.
5. Wage Increases for Landlords and Tenants:
The National Living Wage will see a nearly 10% increase, rising from £10.42 to £11.44 per hour. This wage boost, applicable to those aged 21 and above, is expected to benefit over 2.7 million workers, including landlords and tenants.
6. Mortgage Guarantee Scheme Extension:
The Mortgage Guarantee Scheme, supporting 95% Loan-to-Value mortgages, will be extended for an additional 18 months until June 2025, aiding those with smaller deposits in their homebuying journey.
7. Local Nutrient Mitigation Fund:
The introduction of a £110 million fund aims to assist Local Planning Authorities in addressing nutrient pollution, unlocking planning permissions that might have otherwise stalled.
8. Affordable Homes Guarantee Scheme Expansion:
An additional £3 billion injection into the Affordable Homes Guarantee Scheme is set to help housing associations access cheaper loans for quality and energy-efficient initiatives, alongside new home construction.
9. Housing Revenue Account Rate Extension:
The Housing Revenue Account Rate extension, announced in Spring 2023, supports local authorities in borrowing for Housing Revenue Accounts, potentially leading to savings and increased investment in social housing.
10. Home Buying and Selling Improvement:
The allocation of £3 million for measures to enhance the home buying and selling process includes pilot projects for property tech products and the digitization of local council property data.
11. Local Authority Housing Fund:
An announcement of £450 million for a third round of the Local Authority Housing Fund is aimed at delivering 2400 new housing units, addressing housing and homelessness challenges, including housing for Afghan refugees.
In conclusion, the Autumn Budget outlines a multifaceted approach to addressing various aspects of the property sector. What are your thoughts? Will these policies help the Housing Market in 2024?