How Will the Housing Market Change Following the Autumn Statement?
The chancellor of the exchequer, Jeremy Hunt, revealed what the government will do over the next few years to bolster the UK economy.
Within that statement, he detailed numerous plans to help the UK housing sector with initiatives to benefit renters, landlords and developers.
Read on for more information on how this affects UK passive income ideas
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What Did the Chancellor Say About Housing in the Autumn Statement?
The Chancellor’s Autumn Statement involves 110 points for boosting the national economy. Several of those points are directly related to renters and the housing sector.
Those points included:
- A premium planning service across the country. Hunt noted that businesses have said they would pay more for speedier application decisions. He also noted that the premium service would come with a guaranteed refund if a prompt decision was not made, improving the current Planning Performance Agreements approach.
- A £110m commitment via the Local Nutrient Mitigation Fund, unlocking 40,000 homes over the next few years.
- An additional £32m investment in housing and planning, providing new homes across the UK.
- Consultation plans for a Permitted Development Right scheme, allowing homeowners to convert homes into two flats, provided they do not change the exterior.
- £3m for various measures that will improve buying and selling processes in the housing market.
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What Did the Chancellor Say About the Affordable Homes Guarantee and Local Housing Allowance?
One of the standout points from the Autumn Statement was the £3bn extension to the current Affordable Homes Guarantee Scheme. Under this scheme, billions of pounds will help deliver 20,000 new properties nationwide and improve the efficiency and quality of thousands of additional homes.
The government also announced that they would raise Local Housing Allowance rates to the 30 percentile mark of market rents, which means 1.6 million low-income households will be roughly £800 better off per year.
In a blockbuster announcement, the Chancellor revealed that the national insurance tax would drop from 12% to 10%, which will be implemented in January 2024. So, if you earn £35,000, you will save £450 per year.
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What Does the Autumn Statement Mean for Property Investors?
One of the most important things investors need to remember is that tenants with more money are good for the housing market.
The Autumn Statement puts extra capital in the pockets of potential tenants up and down the country, thanks to LHA investment and the universal credit and disability benefit increase of 6.7%. As such, renters will be in a stronger position to pay premium rents than they have been over the last couple of years.
As a landlord, this means you are less likely to face void periods, especially with rents rising due to unprecedented tenant demand across the country.
In addition, plans to decrease planning application time and the new Permitted Development Right scheme will help increase the housing supply in the buyer’s market.
With low property prices and high gross yields (particularly in North West cities like Liverpool), investing in real estate in the UK has potentially never been more advantageous.
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