Chancellor Philip Hammond delivered his first major announcement since taking office with the Autumn Statement, and also revealed the first new economic forecasts from the Office for Budget Responsibility since the EU referendum.
The statement contained some key points for landlords. Here’s what you need to know.
Letting agent fees
For landlords, the biggest headline grabber of the announcement was the scrapping of letting agent fees, to be instituted “as soon as possible”.
The Chancellor said: “Landlords appoint letting agents and landlords should meet their fees.”
However, immediately following the announcement, landlord groups warned that this move could simply force an increase in rents. Richard Lambert, chief executive of the National Landlords Association, said: “Adding to landlords’ costs, on top of restricting their ability to deduct their business costs from their taxable income, will only push more towards increasing rents.”
Right To Buy
The Chancellor announced a “large-scale regional pilot” of the Right To Buy scheme for housing association tenants, which will be available to more than 3,000.
It is estimated that the scheme will cost the Exchequer £250 million over the coming five years, with housing associations being reimbursed for the discount the tenants will receive on the purchase price.
Housebuilding
The Autumn Statement included the announcement of a new £2.3 billion ‘housing infrastructure fund’. It is thought that this will help build up to 100,000 new homes in areas where demand is high.
The Chancellor also announced a further £1.4 billion to help build an extra 40,000 affordable homes.
State of the economy
The Office for Budget Responsibility forecasts 2 per cent growth by 2021. In the coming years, 2.1 per cent is forecasted in 2016, 1.4 per cent in 2017, and 1.7 per cent in 2018.
According to the OBR, the continuing uncertainty following the EU referendum is the reason for lower than previously predicted forecasts. The Chancellor did, however, reiterate that medium-term forecasts still expect a growth rate above IMF predictions for the likes of France and Germany.
Tax
By the end of parliament, the tax free personal allowance will sit at £12,500, with the higher rate threshold growing to £50,000. The personal allowance will rise at least in line with inflation from that point.
Those receiving benefits were also handed a boost as the Universal Credit taper rate will be cut.
The Chancellor also signaled a crackdown on “inappropriate use” of the VAT flat rate scheme. What exactly this ‘crackdown’ equates to is yet to be defined.
Insurance
Finally, the Chancellor also announced that insurance tax will rise to 12 per cent in June 2017, up from its current 10 per cent.