Key takeaways for landlords from the Autumn Statement

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. 

While there weren’t a significant number of announcements made regarding the housing sector, Chancellor Jeremy Hunt made some announcements that will have an impact on landlords, directly or indirectly.

To help with the deluge of information released in the Autumn Statement, we’ve put together a list of the four main things that could have an impact on landlords, whether that’s through your tenants, changes to the tax system, or changes in the wider housing market.
 

Local housing allowance increase for tenants

Tenants on lower incomes will receive extra help with their rental housing 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. 

Tracey Gosnell, Head of Property Management at Intercounty, has described ‘the increase in Local Housing Allowance [as] a welcome decision as it will help tenants and Landlords with the ongoing struggles to manage their finances.’
 

Support for increased homebuilding

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 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.
 

Converting a home to 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.
 

Helping you through legislation change is one of the things we offer as part of our Fully Managed landlord service. Get in contact with our Property Management team to find out more.

The information contained within was correct at the time of publication but is subject to change.