The Chancellor of the Exchequer, Jeremy Hunt, gave his Autumn Statement on 22nd November 2023 announcing various initiatives affecting both the rental market and the wider property industry.

The key takeaways that relate to property investors are:

Property-related changes around the country

For property investors, there were some opportunities outlined in the Autumn Statement. The key announcements are:

  • The Local Housing Allowance (LHA), which has been frozen since 2019, is to be increased next year to the 30th percentile of local market rents, as requested by numerous landlord and lettings agency groups. This will help 1.6m households currently renting in both the private and social housing sectors. It’s the equivalent of £800 per year per household in receipt of LHA.
  • Universal Credit and other benefits to rise from April by 6.7 per cent.
  • There will be consultation on a change to Permitted Development Rights to allow any house to be converted into two flats, so long as there is no change to the external appearance.
  • More funding has been promised to reduce planning backlogs in areas including Leeds.
  • From 2024 local authorities will be able to recover the full cost of large-scale planning applications in return for a guaranteed date for a planning decision.
  • Homeowners or landlords with properties near new pylons and electricity substations will qualify for up to £1,000 year off energy bills for ten years.
  • Business rates 75 per cent relief for retail, hospitality and leisure sectors extended until 2025.

Boosting incomes for renters and buyers

There are several changes that will boost people’s income over the coming years
and help them afford property costs in the rental sector.

  • Increase to LHA rates (see above).
  • Universal Credit and other benefits to rise from April by 6.7 per cent.
  • Other boosts to income go to pensioners, who are to receive an increase 8.5% from April 2024 in pension payments. That will increase pension income to £221.20 a week, which could help boost incomes by £900 per annum.
  • National Minimum Wage increasing from £10.42 to £11.44 per hour.
  • Employee National Insurance reduced by 2.0 per cent to 10 per cent with an average salary saving of £450. This will be introduced from January 2024.
  • Class 2 National Insurance payments made by the self-employed to be abolished, saving the average self-employed person £192 a year. Also, Class 4 NI for self-employed cut from 9.0 to 8.0 per cent from April, saving £150 per self-employed person.
  • Hunt announced that inflation has halved since the start of the year to 4.6%. It is predicted to fall to 2.8 per cent in 2024, then the 2.0 per cent official target in 2025.

Other announcements in the Autumn statement included:

  • Expanded investment in Freeports and Investment Zones, including further zones in Wales, the Midlands and Greater Manchester
  • The government-backed 95 per cent Mortgage Guarantee Scheme will be extended until June 2025.
  • £500m for the development of AI and supercomputer innovation.
  • Support to help people back into work post-Covid, including additional funding for those with health conditions and those who have been unemployed for over a year. There is a ‘stick’ for those that aren’t currently seeking employment when they are able to work, they are likely to lose access to benefits and even things like free prescriptions.
  • It was announced that the economy hasn’t fallen into recession and has grown slightly. The latest forecasts are still positive for growth, now 0.7% for 2024 and 1.4% for 2025.