2016 has been a bumpy year for landlords, so how did Philip Hammond's first Autumn Statement treat us? URBAN analyse the important points from the end-of-year budget.
Cutting agency fees
In a bold move, the autumn statement has announced that letting agents will no longer be allowed to charge any fees to tenants.
In a statement aimed at making life better for the ‘Just-About-Managing’, this move is designed to help enable tenants to save, and will bring England, Wales and Northern Ireland in line with Scotland, where tenant fees were banned in 2012. However, nothing will be introduced until a full consultation.
The Chancellor stated that ‘as landlords appoint letting agents, landlords should pay the fees’, and hopes to bring in the ban ‘as soon as possible.’
Letting agents are already legally obliged to publicise their fees, however Hammond noted that ‘we’ve (the Government) seen these fees spiral despite attempts to regulate them.’ Despite this, the move is shock, as the government has previously been ‘anti-ban’, with housing minister Gavin Barwell calling it a ‘bad idea’, and Theresa May voting against it. The industry concern has been that if landlords are expected to pay the fees that are usually levied on to tenants, they will simply raise rents to counteract this costs – in this already stretched housing market it could be considered that this is a counteractive measure.
The Autumn Statement also featured significant commentary around Hammond’s pledge to expand on his predecessors promise to deliver thousands of new homes to plug the housing gap in the UK.
The plans to increase housing stock signals a ‘step change in our (the Government) ambition to increase the supply of homes for sale and rent’ according to Hammond, and he delivered a pledge to deliver 100,000 homes in ‘high demand’ areas, as well as a £1.4 billion budget to build 40,000 affordable homes over the next five years.
A separate £3bn housing fund to ‘get Britain building’ has already been announced, and will help small family firms to build 25,000 new homes by 2020 and up to 225,000 in the longer term.
The £2.3 billion housing infrastructure fund was confirmed today which will deliver infrastructure to for up to 100,000 new homes in areas of high demand, and open up many more sites across the UK for new housing options.
The Chancellor also promised to relax restrictions on Government Grants to help with the building of a wider range of housing types.
The Chancellor wants digitalise the country, with £1 billion allocated to invest in full fibre broadband and the trialling of superfast 5G mobile networks.
The changes will boost broadband speeds for two million homes and businesses, which is great news for a nation that is fast bringing day-to-day digital!
Speedy connections are likely to bring businesses to new areas, and attract people who value fast broadband as a key factor in their property. The promised speeds of 1Gbps could allow users to download an entire television series in less than a minute – certainly a USP that not many properties would mention!
With such big plans for investment in the building of thousands of new homes, it’s lucky that the Chancellor is looking to spend some money on improving the road infrastructure that will carry thousands of new homeowners to their new front doors – £1.3billion in fact.
Nothing is more off-putting that a miserable commute, so investment in this vital area may open up new areas for buyers and renters outside of the major city hubs.
Likewise for the rail network, more money is being put into extending Northern powerhouse links, as well as improving reliability – helping keep commuters happy, and widening the search for many when looking for their dream home.
Despite many people believing the controversial scheme puts additional pressure in the already stretched housing association stock, Hammond announced a new regional Right to Buy Pilot scheme.
The scheme, if kept in line with previous pilots, will allow housing association tenants to buy their rented property from their council.
He also pledged the government’s continued support on schemes such as Help to Buy, the Equity Loan Scheme and the Help to Buy ISA.
No change on the additional three percent stamp duty charges, despite the hopes of many!
Unfortunately, this looks like a charge that is set to stick around
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