Autumn Statement 2016: What does this mean?
In his first major economic speech since the UK voted to leave the EU, the Chancellor reiterated that “Britain is open for business” and pledged to “build an economy that works for everyone”.
His statement including major announcement on housing, benefits and tax, but failed to deliver any cuts on stamp duty.
Tenants will no longer be required to pay upfront fees that average £337, in a change aimed at helping the 4.3 million households that are living in private rental housing.
“Landlords appoint letting agents and landlords should meet their fees,” Hammond said.
The change should be introduced “as soon as possible”.
Mr Hammond has also announced the Government is investing £1.4bn in an effort to deliver 40,000 of new affordable homes.
Hannah Maundrell from comparison site, money.co.uk, said: “There’s little doubt tackling this ridiculous ‘tax’ on renters will make it easier and more affordable for people to move without having to borrow cash to cover the cost. The fact some people have to resort to payday loans for moving fees simply can’t continue.
“Scrapping letting agents fees is a smart move but the government need to make sure they think about damage limitation. Landlords could simply hike rents if they’re made to pay the difference.”
The government heralded a step change in its ambitions for addressing the housing supply shortage, pledging £1.4bn to build 40,000 additional affordable homes, an extra £2.3bn housing infrastructure, and a relaxation of financing restrictions on government grants. (to permit the financing of affordable rented housing).
There was little succour for Buy-to-Let landlords, as a ban on letting fees to tenants will doubtless see these costs passed on to landlords. This may be counterproductive in the longer term as it could translate into higher rents and may also lead to an increasing number of Buy-to-Let landlords exiting the market. The extension of the Right to Buy programme will also reduce rental stock. These measures may therefore cause further upward pressure on rents, which in London are already expected to grow faster than property prices over the next 5 years.
The rental sector is expected to provide an increasing percentage of housing supply over the next decade, as much of ‘generation rent’ are unable to afford to buy a property, especially in London. The moves today to boost the supply of affordable rented homes, coupled with previous initiatives regarding the emergent Build to Rent sector, signal that the government is committed to supporting the rental market, and increasingly regards it as playing key part in addressing the housing shortage.
David Poppleton, Director at Inspired Property Management welcomes these moves to improve the rental sector, stating that ‘Renting must become an acceptable alternative tenure and IPM will work positively to implement these changes without compromise’ .
Image courtesy of gov.uk website for more information on the Autumn Statement please click here