Autumn Statement: Permitted Development and LHA Changes Provide Boost for Landlords

In the recent Autumn Statement, while housing may not have been the primary focus, property analysts suggest that crucial measures have been introduced to support landlords and fortify the housing market.

The revelation of a consultation on new permitted development rights, allowing the division of a house into two flats while maintaining the exterior, is viewed as positive news for property investors. This development may address the ongoing demand for rental accommodation.

Many have also applauded the Chancellor's commitment of £1 billion to ensure that local housing allowance (LHA) rates cover the bottom 30% of market rents for the first time since 2020. Commentators believe this move will enable more landlords to cater to LHA recipients, provide social housing solutions, and offer accommodation across the nation.

Additionally, self-employed landlords are expected to benefit from national insurance rate cuts, eliminating class 2 NI payments. This reduction, amounting to a yearly saving of £350 for self-employed landlords, is particularly welcomed in light of the additional tax burden imposed by section 24 of the Finance Act 2014.

There are potentially more positive developments, such as the extension of the 95% mortgage guarantee for an additional 18 months. Originally set to conclude this year, this extension aims to provide continued support for first-time buyers aspiring to enter the property market. The guarantee enables both first-time buyers and existing homeowners to purchase properties up to £600,000 with a 5% deposit, applicable to both new builds and existing homes.

However, some critics emphasize the lack of relaxation in affordability restrictions on this guarantee, limiting eligibility to loans set at a maximum of 4.5 times income.

Expressing disappointment, Nationwide Building Society argues that this limitation persists, hindering accessibility, as research indicates that most homes remain unaffordable through the scheme.

Nevertheless, many see the collective impact of these announcements as confidence-boosting for the property market. Despite economic challenges, the resilience of the property market remains evident, with clients continuing to invest in the UK property market due to its perceived value, especially in response to the high demand for rental accommodation.

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