Last Wednesday (22nd November 2023), the Chancellor Jeremy Hunt, announced the 2023 Autumn Statement (or autumn budget). The annual Autumn Statement outlines the government’s upcoming plans for the economy, spending and taxation. Within this announcement, comes several measures which will impact the UK property market, relevant for developers and investors.
Here are some of the most important bits for property developers and investors:
– Local Housing Allowance Increase
– National Living wage increases
– National Insurance Tax Cuts for the Self-Employed
– Permitted Development Rights Changes
– Planning system reform
Local Housing Allowances Increases
The Local Housing Allowance is a measure used by the government to calculate how much housing benefit private renters can claim, varying on a number of factors such as location, property size and the rental price.
With the announcement, the Local Housing Allowance will cover at least 30% of local market rents. The government has said this will give roughly 1.6 million households an average of £800 next year. Thus, this measure could help to support property developers and investors leasing properties to lower income tenants.
National Living Wage Increases
The Chancellor has also announced an increase in the National Living Wage from £10.42 to £11.44 an hour, with effect from April 2024. The change will increase the wages received by lower income tenants and potentially help to combat housing affordability issues, again benefiting developers and investors who lease properties to lower income tenants.
National Insurance Tax Cuts for the Self Employed
The Government has announced cuts to National Insurance, including the abolishment of Class 2 National Insurance for self-employed workers earning more than £12,750 a year; saving those who are currently affected around £192 annually. This also comes with a 1% reduction in Class 4 National Insurance for the self-employed. These measures will cut costs for self-employed property developers and investors, those who tend to have larger portfolios.
Permitted Development Rights Changes
The Chancellor has announced further plans to support property developers, with the government beginning consultation on new Permitted Development Rights which will allow any home to be converted into two flats if “the exterior remains unaffected”. This could be especially valuable to developers and investors looking to get value out of larger, high-end properties.
Premium Planning System
The government has also declared reforms to the planning system with a premium planning service. Developers in England may benefit from the new premium planning service which looks to guarantee accelerated decision dates for major applications and fee refunds where these decision deadlines are not met.
As a developer or investor, the recent Autumn Statement highlights some interesting developments in the UK property market which may help you to get the most out of your business. If you need financing in your property development venture, contact BiG Property Finance and turn your vision into tangible assets.
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At Big Property Finance Ltd we provide fast finance for residential and commercial projects. Contact our property loan experts for your finance needs today. Email us at info@bigpropertyfinance.co.uk or call us at 0121 348 7830.
This post is intended as a guide only, and does not constitute legal advice.
