Tax and Benefit Changes announced to impact housing market

Chancellor Jeremy Hunt has used his Autumn Statement to reveal measures affecting both the rental market and the wider property industry. 

The Local Housing Allowance is to be increased next year to the 30th percentile of local market rents, as requested by numerous landlord and lettings agency groups. Hunt says this will help some 1.6m households currently renting in both the private and social housing sectors. It's the equivalent of some £800 per year per household receiving LHA, he says.

The government-backed 95 per cent Mortgage Guarantee Scheme has been extended until the end of June 2025 - 18 months longer than previously agreed.

On planning, there will be consultation on 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.

Households close to new electricity infrastructure (pylons and sub-stations) will receive up to £1,000 per year off energy bills.

Additionally, Hunt says that from 2024 local authorities will be able to recover the full cost of large-scale planning applications in return for a guaranteed date for a planning decision.

Business rates 75 per cent relief for retail, hospitality and leisure sectors extended until 2025.

Other measures announced today include:

- Employee National Insurance cut by 2.0 per cent to 10 per cent, helping 27m employees with an average salary saving £450 - this is introduced from January 6 2024;

- Class 2 National Insurance payments by self-employed to be abolished, saving the average self-employed person £192 a year - Class 4 NI for self-employed cut from 9.0 to 8.0 per cent from April, saving £150 per self-employed person;

- Universal Credit and other benefits to rise from April by 6.7 per cent;

- Core inflation predicted to fall to 2.8 per cent in 2024, then the 2.0 per cent official target in 2025 (this is a slower decline than previously anticipated);

- All alcohol duty frozen until August 2024;

- Triple lock to be honoured in pension payments - state pensions to rise by 8.5 per cent in April;

- Reduced business tax burden by up to 25 per cent by making large-company 'Full Expensing' permanent for those investing in the UK;

- £4.5 billion over five years to be invested in strategically important industry sectors including green technology and pharmaceuticals; 

- £50m over two years to pilot ways to increase apprenticeships in key sectors;

- £500m for the development of AI and supercomputer innovation;

- Expanded investment in Freeports and Investment Zones, including further zones in Wales, the Midlands and Greater Manchester;

- Reform for long-term sickness benefits to encourage job-seeking and working from home, with mandatory work-placements after 18 months in some cases;

- National Minimum Wage to rise £11.44p an hour, which is a 9.8 per cent rise;

- £7m for organisations to tackle anti-semitism in schools and universities.

* Remember - the Chancellor’s speech is only part of the Autumn Statement. The substantial details published in writing afterwards often reveal important changes which are only unravelled in the coming days *