Chancellor Jeremy Hunt’s recent announcement to unfreeze the Local Housing Allowance (LHA) has sparked a range of reactions within the housing landscape. While the decision has found support from various landlord and lettings agency groups, there are voices, particularly from tenant activists, expressing reservations about the extent of these measures. In the Autumn Statement, Hunt outlined a plan to increase LHA next year to the 30th percentile of local market rents, signaling an end to a three-year freeze on this crucial housing support measure.
This proposed adjustment is anticipated to have a significant impact, extending its benefits to around 1.6 million households currently renting in both private and social housing sectors. According to Hunt, this change translates to an average of £800 per year for each household receiving LHA. However, the ongoing discussion surrounding the adequacy of these measures underscores the nuanced and multifaceted nature of housing policy decisions, highlighting the challenge of finding solutions that address the diverse needs and concerns of various stakeholders in the housing market.
Ben Twomey, Chief Executive of Generation Rent, acknowledges that the proposed increase in Local Housing Allowance (LHA) is a welcome relief for the one in three private tenants who rely on benefits to cover their rent. However, Twomey points out potential gaps in the support system, highlighting that families affected by the benefit cap won’t see additional financial assistance.
Furthermore, Twomey notes that tenants in need of new accommodation may still face challenges in affording current market rents, which have surged at a rate surpassing even the updated LHA rates. This situation implies that if a landlord evicts a tenant, the individual could still find themselves having to seek homelessness support from the local council.
In essence, Twomey underscores the necessity for more comprehensive government actions to address the root issues. These include reducing eviction rates, promoting the construction of more homes in desirable locations, and ensuring that the Local Housing Allowance keeps pace with rising rents, rather than facing recurrent freezes.
Ben Twomey, Chief Executive of Generation Rent, acknowledges that the proposed increase in Local Housing Allowance (LHA) is a welcome relief for the one in three private tenants who rely on benefits to cover their rent. However, Twomey points out potential gaps in the support system, highlighting that families affected by the benefit cap won’t see additional financial assistance.
Furthermore, Twomey notes that tenants in need of new accommodation may still face challenges in affording current market rents, which have surged at a rate surpassing even the updated LHA rates. This situation implies that if a landlord evicts a tenant, the individual could still find themselves having to seek homelessness support from the local council.
In essence, Twomey underscores the necessity for more comprehensive government actions to address the root issues. These include reducing eviction rates, promoting the construction of more homes in desirable locations, and ensuring that the Local Housing Allowance keeps pace with rising rents, rather than facing recurrent freezes.
The Chancellor’s move to address short-term homelessness is deemed a positive step; however, a cautious stance is urged, emphasizing the need for a continuous commitment from the upcoming UK government to maintain this investment. Failing to do so may lead to a resurgence in homelessness.
A summary of the Chancellor’s Housing-related measures announced in his Autumn Statement:Â
- Chancellor Jeremy Hunt’s recent announcements include an increase in the Local Housing Allowance (LHA) to the 30th percentile of local market rents, a move welcomed by landlord and lettings agency groups. This adjustment is anticipated to benefit approximately 1.6 million households renting in both private and social housing, translating to an equivalent of around £800 annually per household receiving LHA.
- In addition to the LHA update, the government-backed 95 percent Mortgage Guarantee Scheme sees an extension until the end of June 2025, surpassing the initial agreement by 18 months.
- Planning discussions include a proposed alteration to Permitted Development Rights, allowing houses to be converted into two flats without external appearance modifications.
- Households residing near new electricity infrastructure are set to receive up to £1,000 per year off energy bills, contributing to a reduction in utility costs.
- Additionally, Hunt states that, starting in 2024, local authorities are expected to gain the ability to recover the full cost of large-scale planning applications, offering a guaranteed date for a planning decision.
- The relief on business rates, amounting to a 75 percent reduction, has been prolonged until 2025 for the retail, hospitality, and leisure sectors.
Other non-housing measures announced include:
– Starting from January 6, 2024, a 2.0 percent reduction in Employee National Insurance is set to benefit 27 million employees, leading to an average salary saving of £450.
– For the self-employed, significant changes include the abolition of Class 2 National Insurance payments, saving an average of £192 per year. Additionally, the Class 4 National Insurance for the self-employed is scheduled to decrease from 9.0 to 8.0 percent from April, resulting in a saving of £150 per self-employed individual.
– From April, Universal Credit and various other benefits are expected to experience a 6.7 percent increase.
– In economic projections, core inflation is anticipated to decrease to 2.8 percent in 2024, gradually reaching the official target of 2.0 percent in 2025, indicating a slower decline than previously expected.
– All alcohol duties will remain frozen until August 2024.
– The Triple lock mechanism will be honored in pension payments, leading to an 8.5 percent rise in state pensions in April.
– Large companies investing in the UK will witness a reduced business tax burden by up to 25 percent, with the ‘Full Expensing’ provision becoming a permanent feature.
– A strategic investment plan of £4.5 billion over five years is earmarked for crucial industry sectors, including green technology and pharmaceuticals.
– A dedicated fund of £50 million over two years will be allocated to pilot initiatives aimed at increasing apprenticeships in key sectors.
– A substantial fund of £500 million has been allocated for the advancement of AI and supercomputer innovation, signifying a commitment to technological progress.
– A broadened investment initiative is in place for Freeports and Investment Zones, extending its reach to encompass additional zones in Wales, the Midlands, and Greater Manchester.
– A reform in long-term sickness benefits aims to incentivize job-seeking and facilitate working from home. A key feature includes mandatory work-placements after 18 months in certain cases.
– Anticipating economic growth, the National Minimum Wage is set to increase to £11.44 per hour, reflecting a substantial 9.8 percent rise.
– A financial allocation of £7 million has been earmarked to support organizations in addressing anti-semitism within educational institutions, focusing on schools and universities.
It’s crucial to bear in mind that the Chancellor’s speech is merely a fraction of the Autumn Statement. The comprehensive details released in written form afterward frequently unveil significant changes that unfold in the days to come. Stay tuned for the in-depth insights hidden within the substantial documentation following the initial announcement.
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