24th November 2023
The Chancellor, Jeremy Hunt, delivered his Autumn Statement this week, promising 110 measures to promote growth to the UK economy. In particular, the property sector faces some welcome changes to boost investment and stimulate growth, including a focus on speeding up planning and the delivery of new infrastructure, and additional support for the residential renting market, small businesses and the high street.
Here, Jake Pearlman, Partner and Co-head of Property provides a brief summary of the new measures affecting the property sector, with Paul Atkins, Partner and Head of Property Tax, also covering the key tax highlights:
A push for planning
To help boost the UK housing market, the Government has announced plans to reform and accelerate the planning system. This will come at a cost – although fees are expected to be returned if planning process applications do not meet the new, yet to be specified, time period.
Tackling local planning backlogs
The Government announced a further £32m to tackle local planning backlogs, with a new permitted development law making it easier to convert houses into flats. The Chancellor also extended a scheme that helps social
landlords access cheap finance to build affordable homes.
Local Housing Allowance
With the renting market still in crisis, the Government is set bring in measures to help ease the situation, raising Local Housing Allowance rates to 30% of the local market rents in April 2024. This is set to benefit 1.6m low-income households, who will gain an average of £800 in 2024-25.
Extending the Affordable Homes Guarantee Scheme
Retrofitted existing homes have now been added to the Affordable Homes Guarantee Scheme and available for financing options. The scheme is available to both not-for-profit housing associations and For-Profit Registered Providers.
Nutrient Mitigation Fund
Housing developers will be pleased to see £110m made available through the Local Nutrient Mitigation Fund to help Local Planning Authorities affected by nutrient neutrality rules to deliver local nutrient offsetting schemes.
More Investment Zones
The Government confirmed the location of five more Investment Zones (IZ), in Manchester and the East and West Midlands, and North and South Wales. These and existing IZs will see a doubling of their lifespan, from five to ten years, and associated doubling of investment and tax reliefs from £80m to £160m.
Scotland will welcome the extension of the Levelling Up Fund. The £80m has the potential to make a significant impact on local regeneration in the four selected areas. It will be important that the two governments work closely with local authority partners to ensure clarity and timely delivery of this funding into key projects that will revitalise town and city centres for further capital investment by the private sector.
Freeports and Investment Zones
Both regimes allow businesses in specific locations to benefit from a number of reliefs including Stamp Duty Land Tax relief, enhanced capital allowances, structures and buildings allowances and secondary Class 1 NIC relief for eligible employers. Both regimes were originally to run for five years but the Chancellor has announced that they will both now run for ten years.
Key tax announcements:
- The full expensing by companies of capital expenditure eligible for main pool capital allowances has been made permanent, along with the 50% first year allowance for special rate pool expenditure, bringing forward the tax savings on capital expenditure.
- Reforms will be made to strengthen tax compliance around gross payment status for the Construction Industry Scheme (CIS), and legislation will be introduced to exclude some payments from landlords to tenants from the scope of the scheme.
- The Government announced a business rates support package worth £4.3 billion over the next five years to support small businesses and the high street. The small business multiplier is being frozen for a fourth consecutive year, whilst Retail, Hospitality and Leisure (RHL) relief will be extended, ensuring the most vulnerable businesses continue to be supported. The standard rate multiplier is being uprated in line with CPI inflation and this will increase business rates bills for some. The Government expects that large retailers will benefit from hundreds of millions of pounds of tax relief per year as a result of full expensing, and that this will mitigate the impact.
Click here to read our full summary on the Autumn Statement.