The Autumn Budget
Amidst all the various reactions, postmortems, reports, comments and critiques, the summary from ARLA Propertymark, our lettings governing body, clearly outlines what the Autumn Budget held for housing.
This year’s Autumn Budget was probably one of the most anticipated in recent years, setting out the domestic policy and fiscal measures direction ahead for the UK ahead of Brexit. The Chancellor sold the budget as a “budget that paves the way for a brighter future” saying that the era of Austerity is finally coming to an end, and that the country now has a new future outside the EU. He also said that, if necessary, he would extend the 2019 Spring Statement into a full fiscal event.
It was a budget relatively devoid of fiscal measures which will directly affect the private rented sector, with perhaps the biggest announcement coming in relation to Universal Credit.
The Chancellor announced an extra £1 billion of funding over the next five years to help aid the transition from areas that have still yet to make the move from the old benefits system to the new benefits package that is Universal Credit. He also promised “additional protection” for those moving onto UC, adding that more details will follow later this year. Work allowances will be increased by £1,000 per annum.
From April 2020 the Government will limit Lettings Relief to properties where the owner is in shared occupancy with the tenant, and reduce the final period exemption from 18 months to 9 months.
Chancellor Hammond also announced a financial package aimed at boosting the UKs high streets, which will include £900 million in business rates relief, cutting business rate bills by a third for almost half a million small businesses. A further £675 million co-funding injection is set to be introduced over the next four years and will allow towns and cities to redevelop under-used retail space into homes and offices, providing help to restore High Street properties and put historic buildings back into use.
The sales market
The Chancellor biggest announcement relating to the sales market was that stamp duty relief would be extended to include first-time buyers of shared ownership properties under £500,000.
Other key measures taken to address housing supply and planning were:
- Consultation on simplification of the process for conversion of commercial property into new homes
- Increased business rate retention from 2020, giving local councils greater control over the money they raise
- Removal of the Housing Revenue Cap
- Funding to empower up to 500 neighbourhoods to allocate or permission land for housing, through the Neighbourhood Planning system, for sale at a discount to local people
- A further £500m for housing infrastructure fund, which will unlock 650,000 homes. Local authorities bid for a share of the pot, which is designed to deliver new physical infrastructure to support new and existing communities and make more land available for housing in high demand areas, resulting in new additional homes that otherwise would not have been built
- The Government will respond to Oliver Letwin’s report on land and planning in the new year
- Family homes will be not be subject to Capital Gains tax