AUTUMN BUDGET 2023: 7 CRUCIAL INSIGHTS FOR PROPERTY PROFESSIONALS IN LONDON
As a premier property management company working in partnership with letting agents and landlords across London, we’ve laid out a comprehensive overview of the key headlines unveiled by Chancellor, Jeremy Hunt and how they relate to our industry:
Enhanced Support for Lower-Income Tenants through Local Housing Allowance Increases
The government’s decision to elevate the Local Housing Allowance to cover a minimum of 30% of local market rents is a significant stride. This adjustment is poised to provide essential support to around 1.6 million households, potentially offering an average of £800 in assistance. This is instrumental in making housing more affordable, especially considering that only 5% of private rented homes were deemed affordable under previous housing benefit schemes.
Tax Cuts for Self-Employed Landlords and Letting Agents
Around two million self-employed individuals in the UK, including a significant portion of landlords with substantial property portfolios, are set to benefit from tax cuts. Notably, the abolishment of class 2 national insurance for those earning over £12,570 annually will alleviate financial burdens. While the Autumn Statement didn’t address Section 24 relief for landlords specifically, these measures could collectively save self-employed property professionals up to £350.
Alleviating Pressures on the Sector through Homebuilding Support
With a commitment to investing £110 million in nutrient mitigation schemes, facilitating the construction of an additional 40,000 homes, the government aims to tackle the growing demand for rental properties. This comes at a crucial time when tenant demand is soaring while the availability of rental stock remains strained.
Facilitating Opportunities for Property Developers
The proposed consultation on a new permitted development right, enabling the conversion of single homes into two flats while maintaining the exterior, is an attractive prospect for property developers. Additionally, streamlined planning services and accelerated decision dates for major applications offer a favourable landscape for homebuilders across England.
Support for Smaller Agencies through Business Rate Relief
The freeze on the small business multiplier for another year will particularly benefit small agencies with rateable values under £15,000. This initiative aligns with the government’s efforts to ease financial pressures on independent high street agencies, potentially saving an average of over £20,000 for these businesses over the next year.
Boosting Wages for Lower Earners in the Sector
The confirmation of almost a 10% increase in the National Living Wage, now extended to workers aged 21 and above, is poised to impact tenant affordability and benefit over 2.7 million workers. This increase in minimum hourly pay to £11.44 could contribute positively to the financial stability of both tenants and property professionals.
Pension Measures Impacting the Rented Sector
The commitment to consolidating pensions into a single pot aims to simplify savings for individuals, addressing the issue of numerous small pension pots scattered across different schemes. This change is anticipated to have a substantial effect on pension management within the rented sector.
The Autumn Budget 2023 unfolds a spectrum of changes that significantly impact the property management landscape in London. As a forward-thinking property management company, Business Rock is dedicated to navigating these changes effectively, ensuring seamless collaborations with letting agents and landlords for mutual growth and success.
