Chancellor Jeremy Hunt recently unveiled his Autumn Statement, outlining an extensive range of measures and plans for the year ahead to help grow the British economy.
To help digest these new measures, our team of Landlord Insurance experts here at Lansdown Insurance Brokers have highlighted the key changes that are set to impact property professionals in the UK, including letting agents and landlords.
Energy Efficiency Changes
Following the prime minister’s decision to abandon the proposed alterations to energy efficiency standards, a sense of anticipation arose among landlords regarding the potential announcement of a new deadline or scheme. However, the Autumn Statement surprisingly lacked information on energy efficiency. As a result, the Great British Insulation Scheme and the Boiler Upgrade Scheme remain available to landlords.
Government’s Commitment to Housing Sector Challenges
The government is committed to increased spending on homebuilding and the relaxation of planning rules. A notable investment of £110 million in “nutrient mitigation schemes” is expected to facilitate the construction of 40,000 additional homes. Additional funding of £450 million to local authorities and a £32 million investment to address planning backlogs in key areas outline the government’s commitment to easing pressures on the housing sector.
Boost in Local Housing Allowance
A significant development within the Autumn Statement is the substantial boost in the Local Housing Allowance. This metric, which calculates the maximum amount eligible for private renters in Universal Credit or Housing Benefits, will now cover at least 30% of local market rents. This adjustment is to provide crucial support to lower-income tenants, benefitting around 1.6 million households with an average support amounting to £800.
Tax Cuts for Self-Employed Landlords and Agents
Approximately two million self-employed individuals in the UK, including landlords with larger portfolios, are to benefit from tax cuts outlined in the Autumn Statement. Notably, abolishing Class 2 National Insurance Contributions for those earning over £12,570 a year translates to annual savings of up to £192 for impacted self-employed professionals.
Opportunities for Property Developers
Property developers stand to benefit from proposed measures, including a new permitted development right allowing the conversion of any home into two flats, provided the exterior remains unchanged. Premium planning services and guaranteed accelerated decision dates for major applications, coupled with fee refunds for unmet deadlines, are designed to provide additional support to home builders.
Wage Increase for Lower Earning Tenants and Professionals
In a move impacting over 2.7 million workers, the National Living Wage is slated to increase by almost 10%, rising from £10.42 to £11.44 per hour. This wage hike, extending to individuals aged 21 and above, is anticipated to influence tenant affordability.
Pension Reforms Affecting the Rental Sector
Pension reforms announced in the Autumn Statement include a commitment to maintaining the ‘triple lock‘, resulting in an increase in the full state pension up to £221.20 per week – which is a 9% rise. Efforts to consolidate pensions into “one pension pot for life” aim to simplify savings for
individuals with small pension pots which are generally made by employers who automatically enrol new staff into a pension scheme. These reforms are anticipated to have a substantial impact on the rented sector, affecting both landlords and tenants alike.
About Lansdown Insurance Brokers
Lansdown Insurance Brokers are specialists in Landlord Insurance and Block of Flats Insurance. We are able to provide flexible policies to suit individual client needs and provide advice on what cover is needed. For more information call the team on 01242 524498.
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