The government’s Autumn Statement is one of the most important financial announcements of the year. It will set the course for the rest of the year, and be a guide on what to expect in 2024.
Although the housing sector wasn’t the primary focus of this year’s Autumn Statement, Chancellor Jeremy Hunt made some noteworthy announcements that will directly or indirectly impact landlords.
To help you navigate all the information that was released in the Autumn Statement, we’ve put together a list of the four primary announcements that could affect landlords. These include changes for tenants, taxation, and the wider housing market.
Local Housing Allowance increase for tenants
Tenants on lower incomes will receive additional assistance with their rental costs through an increase in the Local Housing Allowance (LHA). LHA rates are used to determine Housing Benefit entitlement for tenants in the private renting sector. The rates are due to increase so that they now cover at least 30% of local market rents. On average, this translates to approximately £800 of support, although the specific amount may vary based on factors such as the number of bedrooms in the property and what area it is in.
Boosting new home building efforts
The Chancellor has committed to investing in building new homes by committing £110 million to nutrient mitigation schemes. Under these schemes, as part of applying for planning permission, developers can buy credits to offset nutrient pollution caused by housing development. There is also going to be more funding for local authorities to build new homes and tackle planning backlogs in Leeds, London and Cambridge.
With more homes available, it is hoped this could reduce pressure on the rental sector by encouraging more renters to become homeowners.
Tax cuts for self-employed landlords
While not directly related to housing, the tax cuts announced for self-employed people should have a positive impact for a number of professional landlords. According to the 2021 English private landlord survey, approximately 13% of landlords are self-employed as a landlord, with that number going to 39% among landlords who own five or more properties.
The Chancellor plans to abolish Class 2 National Insurance and reduce Class 4 National Insurance from 9% to 8% on all earnings. These combined measures could potentially save self-employed landlords up to £250 a year.
Converting your home into two flats to be made easier
For property developers, there are plans for a consultation on a new Permitted Development Right, making it easier for homes to be converted into two flats as long as you do so ‘without changing the facade’. This, alongside funding to help tackle the backlog with the Local Planning Authorities, could help give landlords the potential to double their income by developing their homes and increasing the number of tenants on the property.
The information contained within was correct at the time of publication but is subject to change.