Autumn Statement 2023: A Positive Outlook for Landlords?
As we enter the end of the year and having now heard the Chancellor’s Autumn Statement, it’s a good time to reflect and take stock. 2023 has seen a fair few ups and downs for landlords with a lot of noise and government proposals (for example, the Renters Reform Bill) but as yet little substance.
My view is that there has definitely been a change of perspective from the government on the Private Rented Sector and landlords. Let’s take a closer look at how that’s played out.
What positive changes have we seen this year?
- Energy Performance Certificates (EPCs)
In September, the government postponed plans to increase the minimum energy performance standard for rental properties to grade C and instead retained the current legal minimum of grade E. This change of direction on EPC certificates is good news for landlords whose portfolios may have required significant improvements to meet the new standard.
- Renters Reform Bill (second reading)
While there are still plans to invoke this as legislation (details here), the government has now decided to look with more care at court reform before simply abolishing Section 21. This in turn should give landlords a greater degree of confidence that a clear process will be in place rather than bill being simply implemented without considering the practical consequences.
- Some positives in the Autumn Statement
This week’s Autumn Statement by Chancellor Jeremy Hunt included several measures that will have a positive impact on landlords.
First, Local Housing Allowance has increased and should help support tenants on lower incomes. Reportedly it will give 1.6 million households an average of £800 in support and should be adequate to now cover at least 30% of market rents.
Next, there were tax cuts for self-employed landlords. The hope was that this would extend to abolishing the Section 24 mortgage interest tax relief. While this hasn’t happened yet, landlords with larger portfolios may benefit from the abolishment of Class 2 National Insurance, which is equivalent to earnings of more than £12570 per year. Information on the current rate can be found here.
Finally, the Chancellor announced plans for conversion of a house to two apartments to fall under “permitted development” and not require planning permission as is currently the case. This is apparently as long as the “exterior remains unaffected”. This move may offer landlords further opportunities to invest in developments with less cost and hassle.
Rising rental demand
In the summer of this year, I featured on BBC radio to discuss the volume of applicants actively applying for rental properties. The fact that the national outlook made airplay across the BBC on that day seemed to be the first turning point and seemed to prompt a more considered government position.
It’s still clear that applications for rental properties are significantly higher than properties actively available to let. The following Rightmove stats for Nicol & Co branches in September of this year bear this out:
Droitwich: approx. 19 interested applicants per house advertised
Malvern: approx. 28 interested applicants per house advertised
Worcester: approx. 45 interested applicants per house advertised
So, potential investors should be looking at a good quality of rent and a good turnaround time from available to moving in. It’s worth noting that property type plays a significant part and I discussed this in another blog here.
There are good opportunities out there for investors
If you’re looking to invest in rental property, current circumstances could put you in a favourable position. With mortgage rates higher than they were a year ago but on the way down, if you require a mortgage it’s a good opportunity to stress test and set up well for the future.
The sales market is an excellent place for potential buyers at present as recent stats from Rightmove (17th November) suggest:
- Average listing price. After holding steady for the last few weeks, the average listing price this week is £414,787 (against a 2023 running weekly average of £431,731). Sellers are being more realistic.
- Price reductions. 19,031 price reductions were seen last week which is a slight drop from the last few weeks (the 2023 running weekly average is 20,353 per week). This means that, per month, approximately 14.1% of residential property stock is being reduced (i.e. just under 1 in 7).
- Average asking price of properties being reduced. This week’s average asking price of reduced properties is £397,299 (against a 2023 running weekly average of £403,150).
- Net Sales Year-to-Date. Year-to-date net sales of 729k show a healthy level of activity despite the challenging economic climate.
- Number of properties for sale. There are 664,258 properties for sale compared to 523,270 a year ago. Areas with noticeable growth in the number of properties for sale include the Southwest (+40.1%), the East Midlands (+39.1%) and the East of England (+36.6%) while London is lagging behind at 5% and Northern Ireland bucking the trend at -9.3%.
Find out more
We’ll be talking about all of this and more issues relevant to landlords at our upcoming Landlord Seminar. This free event is taking place on 6th December at Claines Lane, Worcester and will feature several guest speakers.
It’s a unique opportunity to ask questions and speak to other local landlords and property experts. Details can be found here 
If you want to discuss something particular on the night, you can tell us here 
We’d love to see you there!
