What Hammond’s Autumn Statement means for UK landlords

Parliament

Phillip Hammond gave his first, and last, Autumn statement on 23rd November 2016, having announced that next year he “won’t make significant changes twice a year just for the sake of it”.

The government’s management of the UK housing can at times leave me at a loss. The rhetoric speaks of encouraging those previously unable onto the housing ladder, however the tactics they are using to achieve this seem contrary to the problem.

Housing Infrastructure Fund

A £2.3bn investment in a new Housing Infrastructure Fund, which Mr Hammond intends to use to deliver 100,000 new homes in areas of high demand and £1.4bn to be used to build 40,000 affordable homes is of course very welcome, but it simply is not enough.

In their moves to make landlords the “housing challenge” scapegoat, attention is conveniently diverted from a) the fact that even if some UK landlords opt to sell, the limited supply of property overall means that house prices become no more affordable and b) UK landlords provide vital housing needed by this country for those unable to buy. 140,000 new homes will not change this.

I await the forthcoming Housing White Paper with interest, but not from the edge of my seat.

Meanwhile, every other step gives landlords little other option than to increase rents, giving tenants less disposable income available for saving towards a deposit for a house.

Ban on letting agent fees to tenants

Banning letting fees to tenants is very positive news, but, is it not inevitable that agents will simply seek to recover that loss of earnings elsewhere? Landlords are the only other party in that equation and where will landlords be forced to turn to recoup that cost…

Corporation tax

Limited company investors were hoping that the unexpected helping hand of Donald Trump would inspire a greater and faster cut in UK corporation tax, following the President elect’s own pledge to reduce the US rate to 15 per cent.

However, Mr Hammond stands firm on his previously alluded to position on this and has made no change to the “business tax roadmap” beyond the commitment already in place to reduce corporation tax to 17 per cent by 2020/21.

Other key points on housing

  • Relaxation restrictions on government grant to allow wider range of housing types
  • Large-scale regional pilot of Right to Buy for Housing Association tenants
  • Continued support for home ownership via ‘Help to Buy’, ‘Equity Loan Scheme’ and the ‘Help to Buy ISA’

For all points covered in the Autumn statement the highlights are summarised by the Telegraph.

This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.

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