As part of his Autumn Statement addressed to Parliament today, the Chancellor set out several plans for reform within the housing and rental sectors.
In a fiscal statement that included more than 110 new measures, the Chancellor promised an increase in the Local Housing Allowance, in a bid to support families struggling to afford rising rents amid the cost-of-living crisis.
An increase in this allowance would aim to give vulnerable renters an additional £800 in support per year.
The Chancellor also set out plans to expedite the cumbersome planning process, allowing local authorities to recover the full costs of major business planning applications, in return for being required to meet guaranteed faster timelines.
In turn, if they fail, he pledged that fees would be refunded automatically, with the application being processed free of charge.
Labelling the Conservative party as “the builders,” Hunt introduced a number of measures to enable the development of new housing stock.
In a bid to unlock more than 40,000 new homes, the Chancellor promised to invest over £110m next year to deliver high quality nutrient mitigation schemes.
Additionally, he promised to invest over £32m to “bust the planning backlog” and develop new housing in city hubs such as Cambridge, London and Leeds.
As part of the new measures, the Government allocated £450m to the Local Authority Housing Fund to deliver approximately 2,400 new homes.
Aside from announcing further support for the housing sector, the statement also touched on bolstering the pension triple lock, curbing inflation, and support for local businesses and the self-employed.
However, despite an expansive statement, the Chancellor made no direct mention of the Mortgage Guarantee Scheme, Inheritance Tax (IHT), or the widely anticipated reforms to Stamp Duty Land Tax (SDLT).
In addition, despite predictions, further Government support for first-time buyers was also notably absent.
Reaction:
Hiten Ganatra, MD of Visionary Finance:
“There has been no respite for millions of households since the start of the cost of living crisis and so reducing the national insurance burden for many should be welcomed as a step in the right direction, especially as inflation pressures seem to be easing.
“The initiatives announced today to help release land for house building, plus the support to improve planning process and permitted development to convert houses into flats is a welcome effort to reanimate the house building sector. Whether these measures go far enough is debatable and more long term Government initiatives are needed to address housing shortages across the UK, especially in the affordable housing sector to enable more to own their first home.”
Gavin Richardson, managing director of buy-to-let broker Mortgages for Business:
“What the housing sector needed was an Autumn Statement that supported landlords. Instead we’re still stuck in landlord limbo.
“Plans to abolish Section 21 ‘no fault’ evictions in the Renters’ Reform Bill are still on hold as we wait for the court system to be reformed.
“Currently, it takes six months for landlords to regain possession of their property following a legitimate claim.
“Landlords have lost confidence in the courts and are concerned about the security of their investments without Section 21 in place.
“We want the government to set an eight-week target for processing times for possession claims before abolishing Section 21. The buy-to-let community is still waiting for that.
“We wanted to see Capital Gains Tax relief being made available for landlords when they sell a property to a sitting tenant or first-time buyer — and then invest in a new property to let. That hasn’t materialised.
“Landlords needed the Stamp Duty Land Tax surcharge reviewed. They didn’t get it.
“And landlords needed Mortgage Interest Relief reviewed. Didn’t happen.
“Without these changes, the private rented sector — which could help provide more homes while there is still an insufficient number to meet demand — continues to be damaged by the lack of long-term planning and collaboration.”
Rod Lockhart, chief executive officer, LendInvest:
“We commend Mr. Hunt’s pledge in the Autumn Statement to streamline the planning system. Added accountability aligns with our ambition for a more efficient system, and is a key factor in supporting the delivery of more homes across the UK.”
Samuel Gee, director at Manning Gee Investments:
“The 8.5% Triple Lock commitment is a welcome boost for pensioners, providing one of the largest cash increases to the state pension, exceeding £900 for full-state pension recipients.
“This lifeline is crucial for those heavily relying on it for critical living costs. Simultaneously, the 9.8% minimum wage hike to £11.44 per hour benefits low earners.
“Extending this increase to individuals aged 21 and 22 acknowledges their higher living expenses, demonstrating a commitment to making work financially rewarding, aligning with the Chancellor’s vision to “make work pay”.
“The reduction in National Insurance is a real boost, giving an extra £37 net monthly income to those on £35,000, but news on IHT was unexpectedly quiet; a difficult move during a cost of living crisis. Perhaps wait for the Spring Budget for that.”
Graham Cox, founder at Self Employed Mortgage Hub:
“Abolishing class 2 National Insurance and cutting class 4 by 1% to 8% is fantastic news for the self-employed, particularly as they’ve been hammered in recent years.
“However, growth forecasts for the next two years have been slashed, as our ever-increasing national debt weighs heavily on the economy. We need far more radical measures than this.”
Rob Gill, managing director at Altura Mortgage Finance:
“The cuts to National Insurance deliver a boost in net pay to millions, which lenders in turn are likely to reflect in affordability models, allowing many prospective borrowers to achieve a higher mortgage.”
Stephen Perkins, managing director at Yellow Brick Mortgages:
“Overall, this Autumn Statement delivered very little. It was style rather than substance.
“It is very easy to promise future tax cuts, mostly rewinding previous increases, when by the time many of these have any impact on the economy you are likely to be in the opposition.
“Some planning timeline improvements are likely to be the only announced measures that will impact the property industry, but there is a massive backlog to clear before timings on dealing with new applications can be achieved.”
Gary Bush, financial adviser at MortgageShop.com:
“The National Insurance cuts across the board will help both employed and self-employed workers. The planning system’s organisational tweaks should help the UK’s build plans.
“Generally, I see very little being offered in the most important for the Tories’ Autumn Statement prior to the looming General Election.”
Charles Breen, founder & director at Montgomery Financial:
“This Autumn Statement, on the whole, was yet more tinkering around the edges and contained nothing substantive.
“This was truly emblematic of a Government that is out of ideas and out of touch with what people want and need.”
Kundan Bhaduri, property developer and portfolio landlord at The Kushman Group:
“Class 2 National Insurance will be abolished “saving the average self-employed person £192 a year,” according to Hunt.
“This is clearly a huge push for the self-employed and is an immediate win for millions of self-employed people and for small businesses.
“On Monday, Hunt also confirmed a new investment zone in West Yorkshire, and has today announced three further investment zones in the West Midlands, East Midlands, and Greater Manchester.
“These zones will help catalyse £3bn in private investment and 65,000 new jobs. A further investment zone will be created in Wales in the region of Wrexham and Flintshire.
“This has been long awaited and is a fantastic outcome for small businesses up and down the country who will benefit from the investment.”
Rohit Kohli, operations director at The Mortgage Stop:
“If you ever want to apply the phrase “a swing and a miss” today’s budget is the perfect fit.
“The chancellor had a great opportunity to take advantage to make some changes that could kick-start the UK economy and frankly, today’s statement was all hype and no substance.
“This government has given up and run out of ideas, it’s time for a change.”
Sebastian Murphy, group director at JLM Mortgage Network:
“This Autumn Statement presented the Government with an opportunity to really move the dial on housing market activity, and to introduce some fresh incentives to get people moving and buying.
“This was an open goal that the Chancellor appears to have missed spectacularly – we have called for a stamp duty holiday for older homeowners who want to downsize but are put off by the large amount of taxation they would need to pay, but nothing of the kind has been proposed.
“Such a measure would encourage older, single people to move into more suitable accommodation while freeing up larger, family homes for those who are moving up the ladder and want these types of properties in order to meet the needs of their families.
“Getting the right people into the right homes would help a large number of people who feel they can’t move at the moment.
“We need greater levels of supply desperately but a proposal which might allow homes to be split into two flats seems a retrograde measure which doesn’t tackle the types of homes people need or want to buy.
“There has been a lot of expectation about what might be announced today and this feels like a real damp squib for housing and mortgage market stakeholders.”
Rachael Sinclair, director of mortgages and financial wellbeing at Nationwide Building Society:
“We welcome all measures that can play a role in helping people buy their first property, including the Mortgage Guarantee Scheme extension but we are disappointed that it continues to restrict qualifying loans to 4.5 times income as research shows that most homes remain unaffordable through the scheme.
“Owning a home remains an aspiration for many, which is why as a leading lender to first-time buyers, Nationwide has continually offered products to those with small deposits outside of the Mortgage Guarantee Scheme including our Helping Hand range which lends up to 95% LTV and up to 5.5 times income.
“However, more needs to be done. That is why we continue to call on the government to commission an independent review into the first-time buyer market.
“This will provide much-needed clarity on issues that continue to hamper prospective homebuyers, such as the lack of new homes and the need for products that address the equally significant barriers of deposit and affordability.”
