Autumn Statement 23: Overview for landlords

Headlines for property investors:

The Autumn Statement has been billed as one to promote growth. There are certainly some measures that could help with that but, as ever, the devil is in the details of how things will really play out.

At a macro level:

For landlords specifically, there are some things that could help bring some stability to the investment landscape. Creating growth hubs in the Midlands and Greater Manchester and continuing the relief on investments in equipment and machinery could help stimulate the local economies, and more specifically job creation. If you’re targeting the young professionals in these areas this could be good news for securing reliable renters.

The same is true for extending the 75% business rate cut for retail, hospitality and leisure. If high streets are given more scope to thrive then communities, their residents and the desirability of an area should be buoyed too. Is it enough though?

Potentially. That’s because there are some interesting cuts in tax happening alongside.

At a personal level:

Class 2 National Insurance has been abolished amounting to a £192 saving a year. And Class 4 will be cut by 1% to 8% from April. If you’re full-time landlord who has been subject to these NI levies then these cuts will certainly help.

On the flip side, the planned National Insurance cuts from January could put more money in people’s pockets. Plus, in April the National Living Wage will increase from £10.42/hr to £11.44/hr. It will benefit everyone 21 years and older. There are also increases for those 16+ and 18+. That’s also good news for attracting first-time renters who might otherwise stay rent-free with the ‘bank of mum and dad’.

Regional growth:

£1.3bn has been promised over the next five years to help people with medical conditions find work and the same amount is promised to help anyone who has been out of work for over a year. This could alleviate some pressure on job vacancies in specific pockets in the country and help grow the local economy.

But even though inflation has dropped it’s still high so the question remains, are these measures enough to boost the housing market and help make a dent in the probability of rent arrears in the short-term?

Meeting demand for housing:

The Chancellor has acknowledged planning rules are slow and cumbersome and announced a premium planning service to speed things along. In tandem, he’s called for a consultation on permitted development rights, such as those related to converting properties into multiple flats.

At the same time, a commitment to invest in housebuilding runs to the tune of £450m funding for local authorities to support building homes, and £110m investment in ‘nutrient mitigation schemes’ to offset pollution from construction. If these measures lead to more stock then, with the cuts above, there’s potential for landlords to grow their businesses.

Some surprises?

Actually, no. There was no mention of inheritance tax cuts, as speculated, but the triple lock on pensions was protected, for now. It’s possible this could all still change as we head towards elections and a Spring Budget. As ever, forward planning your portfolio and tax efficiencies will be prudent.