The three-year freeze on the local housing allowance will end, the government has confirmed in today’s Autumn Statement. Chancellor Jeremy Hunt says he will increase the local housing allowance, which has been frozen since 2020, in a measure worth £800 for some households next year.
He said: “I will therefore increase the local housing allowance rate to the 30th percentile of local market rents. This will give 1.6 million households an average of £800 of support next year.”
On alcohol duty, Mr Hunt added: “As well as confirming our Brexit Pubs Guarantee, which means duty on a pint is always lower than in the shops, I have decided to freeze all alcohol duty until August 1st next year. That means no increase in duty on beer, cider, wine or spirits.”
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Joe Pepper, CEO of PEXA UK comments ahead of the Government’s Autumn Statement: “With no dedicated policies on the horizon to boost property transactions, for homebuyers and homeowners, this Autumn Statement provides little relief. Those having to remortgage imminently will most likely be forced to pay far more than they do now, despite mortgage rates beginning to fall. This is only going to exacerbate existing affordability problems. Many buyers will be waiting for fixed rates to become more competitive before progressing purchases, even with lower deposits and a green incentive on offer.
“We remain hopeful that the rate of inflation will continue to fall, so that mortgage rates continue to fall in line, at which point we expect to see property transactions rebound. The current quiet period is the ideal time for the industry to come together and embrace the kind of technological innovation which will significantly improve the markets’ ability to scale and grow capacity in the months to come. This is going be key in transforming the property market, reducing friction and improving customer outcomes.”
Paresh Raja, CEO of Market Financial Solutions, said: “You cannot begrudge the Chancellor’s focus on supporting businesses and consumers with tax reforms, but from the perspective of the property market, it was a somewhat uninspired and unimaginative statement.
“Speeding up the planning process and potentially making it simpler to convert houses into flats will be welcomed by some landlords, investors and developers, but more detail is required. Meanwhile, a more drastic overhaul of the planning system seems to have been abandoned, which feels like an important oversight.
“The lack of meaningful property-related announcements is disappointing, given there had been rumours of stamp duty cuts over the weekend. Today was a real opportunity to breathe life into the market and help catalyse growth at a time when economic markets are gradually improving, but that opportunity was missed.”
