Propertymark: Autumn Budget and Spending Review 2023
Propertymark comments on the Chancellor’s Autumn Budget and Spending Review 2023, assessing the impact of the announcements.
Local Housing Allowance (LHA) will at last be unfrozen and Universal Credit (UC) will rise under UK Government tax and spending plans announced by Chancellor of the Exchequer, the Rt. Hon. Jeremy Hunt, MP, today, 22 November 2023. Rate relief and full expensing for businesses are also included.
Vital relief for tenants on lowest incomes:
Hunt committed to increasing the Local Housing Allowance rate to the 30th percentile of local market rents which he said will give 1.6 million households an average of £800 of support next year. Universal Credit will also rise by 6.7% from April 2024.
Propertymark welcomes this announcement, having lobbied for an uplift in LHA, including in our 2023 Spring and Autumn Budget representations, since the rates were frozen in 2020. As LHA has increasingly lagged behind rising rents it has effectively priced the most vulnerable tenants out of the market for private rented homes.
Propertymark will continue to urge the UK Government to go further and increase the LHA level to the 50th percentile. This will ensure that tenants have wider access to secure and affordable housing options.
Minimum wage rises:
Delivering on a manifesto commitment to eliminate low pay, the minimum wage – known officially as the National Living Wage – will rise from £10.42 to £11.44 per hour in April next year.
This is a rise of 9.8% and worth up to worth up to £1,800 for a full-time worker.
National insurance reduced:
From 6 January 2024, the main employee National Insurance rate will drop from 12% to 10%, saving someone on an average salary of £35,000 over £450 per year. The Chancellor said this would be pushed through with urgent legislation to begin before the new tax year.
Class 2 National Insurance for self-employed people will be abolished.
Pension triple lock maintained:
The UK Government will increase the full new state pension by 8.5% to £221.20 a week, worth up to £900 more a year, from April 2024 as well as honouring their commitment to the triple lock.
Business rate relief extended:
The small business multiplier will remain frozen for another 12 months. The 75% discount on business rates over £110,000 for retail, hospitality and leisure businesses will continue for a further year, saving the average independent shop over £20,000.
Full expensing made permanent:
For every £1 that a business invests in IT, machinery and equipment, they can claim back 25p in corporation tax – a big benefit for companies which invest heavily in equipment, such as manufacturers.
Faster planning applications or your money back:
Hunt will allow local authorities to recover the full costs of major business planning applications, in return for being required to meet guaranteed faster timelines. If they fail, these fees will be refunded automatically with the application being processed free of charge.
There will also be a change to Permitted Development Rights to allow any house to be converted into two flats, so long as there is no change to the external appearance.
Timothy Douglas, Head of Policy and Campaigns at Propertymark, says:
“Propertymark is extremely pleased to see the unfreezing of Local Housing Allowance rates.
“We have campaigned on this extensively and it will help those tenants who need support with the cost of renting, as well as agents and their landlords renting to tenants on benefits.
“Increasing the supply of housing is vitally important so Propertymark welcomes the additional support to local authorities to speed up the planning process and get new homes built.
“What’s key is that planning has an infrastructure-first approach and local communities see new or improved amenities to support increased housing numbers.
“The expansion of Permitted Development Rights to enable someone to create two homes within one house will also help increase the supply of places to live but is likely to be more workable in some areas of the country than others.
“Again, what’s key is that issues around quality and safety standards as well as parking are considered for this change to work in practice.”
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