What Jeremy Hunt’s Autumn Statement means for the UK property market
In the aftermath of Chancellor Jeremy Hunt’s Autumn Statement yesterday, there’s a discernible shift in the property market mood. While the announcement lacked specific measures tailored to revitalise the property sector, it’s essential to focus on the positive aspects for potential buyers and sellers.
Undoubtedly, the absence of anticipated boosts like Stamp Duty incentives or clarity on the Renters’ Reform Bill Section 21 abolition might seem disappointing. We understand the significance of these aspects in driving market activity.
For those looking to downsize, the high Stamp Duty costs have been a hurdle, limiting their movement and affecting the available property stock. A Stamp Duty incentive could invigorate this sector, creating a ripple effect across the market and benefiting first-time buyers. Regrettably, this incentive was missing from the Autumn Statement, hindering the market’s current stagnation.
Additionally, landlords seeking some relief or support may feel somewhat left out following the statement, as there was no mention of tax relief or specific support mechanisms for their segment.
Nevertheless, amidst these concerns, the announcement does carry some positives. It focuses on aiding struggling families with the cost of living and aims to stimulate the UK economy’s growth, potentially fostering an environment beneficial for property transactions.
At Jacobs Steel, we acknowledge the dynamics of the current situation. Despite the absence of some anticipated measures, we remain committed to assisting our clients in navigating this market terrain, finding opportunities, and ensuring a positive property journey for all involved.
Key points from yesterday’s Autumn Statement
Starting next year, both employed and self-employed workers will benefit from lower National Insurance rates, resulting in significant savings for millions of individuals. For example, the average salary of £35,000 per year will be around £450 better off.
The state pension will increase by 8.5% in April 2024 under the triple lock system.
Increase by 6.7% in Benefits, including Universal Credit, will start from April 2024.
Local Housing Allowance (LHA) will be updated next year to provide more help with housing costs to some private renters that receive Housing Benefit or Universal Credit. Hunt has made a commitment to raise the Local Housing Allowance rate to the 30th percentile of local market rents, providing an average of £800 in support to 1.6 million households next year.
Stricter sanctions may be imposed on Universal Credit claimants who fail to adhere to new work search regulations in order to combat “benefit cheats” and increase employment rates.
The National Living wage will go up from £10.42 an hour to £11.44 an hour. This new rate will apply to all workers aged 21 and over.
A number of changes to ISA rules are coming for savers. Among them is the ability to contribute to multiple ISAs of the same type each tax year, as well as the option to make partial transfers of ISA funds without regard to when the initial payment was made.
The Government’s guarantee scheme for lenders is being extended, which suggests that 5% deposit mortgages are here to stay.
Savers may soon have the option to have new employers contribute to their existing pension pots, thanks to a potential new policy. The government is reviewing the idea of granting savers the legal right to receive new employer contributions into their current pension pots. According to the Chancellor, this could lead to the creation of a “pension pot for life”.
After evaluating yesterday’s Autumn Statement, it’s clear that there was a missed opportunity to ignite growth in the property market. There were hopes for an announcement that would serve as a catalyst for increased housing market activity and incentives to encourage more movement and home purchases, but unfortunately, that didn’t happen. However, there are a few silver linings worth noting.
Mortgage Guarantee Scheme
The extension of the mortgage guarantee scheme is heartening news. This scheme has aided 37,800 households, with the majority being first-time buyers. Its extension will continue supporting the emerging positive trends in the lending market and benefit many first-time homebuyers.
Changes in Planning Laws
The forthcoming changes in planning laws are also a positive aspect worth highlighting. A refund will be granted if planning progresses sluggishly, and there is potential to convert a house into two flats without needing planning permission (given the unchanged external design). This brings a welcome ease for many linked to the UK property market
Unfreeze of Local Housing Allowance Rates
Another cause for celebration is the decision to unfreeze Local Housing Allowance rates. This move ensures that the most vulnerable tenants are not priced out of the private rental market and addresses the growing disparity between LHA and rising rents.
Acknowledging the Broader Economic Landscape
Despite the missed opportunity, there are undeniable positives to acknowledge. The economy has seen growth, incomes have risen, and inflation rates have dipped, placing us in a favourable position compared to several other economies.
Looking ahead to the coming Spring, it’s our hope to witness a more direct address that includes Stamp Duty incentives, support measures for landlords, and clarity on updates regarding Inheritance Tax. These steps would be pivotal in further invigorating the property market and sustaining positive momentum for all involved.