John Charcol: Autumn Statement 2016 Summary

Posted on 23 November 2016 by Richard Morgan

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Today the Chancellor Philip Hammond unveiled his plans for the UK economy. With less than two thirds of the UK population owning their home and increasing numbers renting, the Chancellor stated that “the goal of home ownership remains out of reach for too many” and that there was a pressing need for more affordable housing.

Below is a summary of the key highlights of the Chancellor’s Autumn Statement:

New Housing

  • A housing infrastructure fund of £2.3bn was announced to build 100,000 new homes in areas of high demand.
  • The Chancellor also announced an additional £3.15bn for 90,000 new homes in London. 

Affordable Housing

  • To provide affordable housing that supports a wide range of needs the government plans to inject £1.4bn to deliver 40,000 additional affordable homes.
  • Government restrictions will also be relaxed allowing affordable housing funding to be used to support low-cost rents, shared ownership schemes and Rent to Buy.
  • There was no announcement on improving the planning process however, one of biggest complaints by developers. 

Landlords told to pay letting agency fees

  • The fees paid by renters to letting agents in England have been banned, meaning that tenants will no longer have to pay the upfront fees that can run into hundreds of pounds.
  • The move was announced to help 4.3million households that now live in private rental housing.
  • Some critics will argue that this is yet another assault on Britain's small landlords and that the costs will be passed onto their tenants through higher rents. But, as the agents are acting for the landlord, it has always seemed unfair that the tenant should pay these upfront fees? 

Right to Buy 

  • A new large scale regional pilot of the Right to Buy scheme for housing association tenants was announced.
  • The pilot will enable more than 3,000 tenants to buy their own home under the Right to Buy discount scheme.
  • This is a scale back, presumably following consultation, as it was previously indicated this would become a national scheme.

Help to Buy

  • The chancellor confirmed that the government would continue to support home ownership through the Help to Buy Equity and Help to Buy ISA schemes.
  • But the Government halved its expected bill for the Help to Buy ISA due to poor take-up of the scheme.
  • Originally expected this to cost £2.1bn from 2016-17 to 2019-20 the expected cost is now expected to be £1.2bn.

Housing Whitepaper

  • Mr Hammond confirmed that a full housing white paper that will outline the full plans for the UK housing market would be published in due course.

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Categories: Budget, First time buyers, Buy to let

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