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 sort through all the information released in the Autumn Statement, we’ve compiled a list of four main announcements that could impact landlords. These encompass changes ranging from tenants to tax reforms and broader shifts within the housing market.
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 amount of tenants on the property.
Tax cuts for self-employed landlords
While not directly related to housing, the announcements on tax cuts for the self-employed should positively impact 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 have five or more properties.
According to the Chancellor, Class 2 National Insurance is going to be abolished, and Class 4 National Insurance is being cut from 9% to 8% of all earnings. Both of these together could save self-employed landlords up to £250 a year.
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.
Increase in Local Housing Allowance for tenants
Tenants on lower incomes will receive extra help with their rent costs with an increase in Local Housing Allowance (LHA). LHA rates are used to calculate Housing Benefit entitlement for tenants renting in the private sector, and they are increasing to cover at least 30% of local market rents. This equals an average of £800 of support, though this will vary depending on things like the number of bedrooms in the property and what area of the country they’re in.
The information contained within was correct at the time of publication but is subject to change.