Chancellor Jeremy Hunt Unveils Measures to Boost Housing Market in Autumn Statement 2023

autumn statement

Chancellor Jeremy Hunt has just concluded the Autumn Statement 2023, revealing a series of measures aimed at revitalizing the UK housing market. While some anticipated changes to Stamp Duty did not materialize, there are positive developments that could impact homeowners, renters, and first-time buyers.

House Building and Planning Changes: A Boost for New Homes

In a bid to address the housing crisis, Chancellor Hunt announced a £110 million investment over the next two years to facilitate the construction of 40,000 homes. An additional £32 million will tackle the planning backlog, fostering new housing developments in Cambridge, London, and Leeds, promising thousands of additional dwellings. This move is crucial, 

especially given the challenges faced by the industry since the Kwarteng/Truss debacle in 2022.

Furthermore, a consultation into new permitted development rights was promised, allowing houses to be divided into two flats, provided the exterior remains unchanged. While these measures are seen as promising, industry experts, like Tom Nicholson, emphasize the need for a robust framework to ensure genuine reform, addressing systemic hurdles and streamlining the planning process.

Mortgage Guarantee Scheme Extension: Support for First-Time Buyers

The Mortgage Guarantee Scheme, designed to assist first-time buyers with smaller deposits, has been extended until June 2025. This initiative enables buyers to put down a 5% deposit on homes worth up to £600,000, with the remaining 95% covered by a mortgage. Despite the extension, concerns linger about the income multiples restriction to 4.5 times income, limiting borrowing amounts. Nationwide suggests that more needs to be done, calling for an independent review of the market to further support first-time buyers.

Renting: Lift on Local Housing Allowance Cap

Chancellor Hunt addressed the challenges faced by private renters by lifting the cap on Local Housing Allowance to the 30th percentile of local market rents. This move, responding to the rising costs of rent, is expected to provide an average of £800 in support to 1.6 million households over the next year. The decision to unfreeze the Local Housing Allowance rate, frozen since 2020, will help align support with current rent prices, considering the 28% increase in average London rents since 2019.

Positive Reception Amidst Criticisms: Impact on Housing Affordability

While the Autumn Statement did not fulfill all expectations, it received positive feedback for its efforts to stimulate the housing market. Richard Donnell at Zoopla welcomed the Chancellor’s cuts to National Insurance, highlighting their potential to improve housing affordability and boost confidence into 2024. However, critics, including Shadow Chancellor Rachel Reeves, expressed concerns about the “Tory mortgage penalty,” urging further measures to address affordability issues for first-time buyers.

The Autumn Statement 2023 introduces significant measures to support the UK housing market. From stimulating new home construction to extending support for first-time buyers and addressing rental challenges, these steps aim to create a more resilient and accessible property market. While industry experts highlight the need for continuous efforts, the positive initiatives present a hopeful outlook for homeowners and those aspiring to enter the property ladder.

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