Chancellor of the Exchequer Jeremey Hunt MP delivered the Government’s highly-anticipated Autumn Statement today, confirming a raft of tax increases and spending cuts.
The announcement had been delayed from the end of October, after markets responded negatively to the previous Government’s approach to stimulating the economy.
Among other measures, the announcement included a Capital Gains Tax (CGT) hike, threshold freezes on income tax and a change to Council Tax which means increases will be capped at the higher rate of 5 per cent.
This comes alongside wider public spending cuts and a more modest approach to supporting households with energy costs after April 2023. The full statement is available to view here.
Reflecting on what this means for the PRS, safeagent chief executive, Isobel Thomson, says:
Today’s announcement of spending cuts and tax rises is – while widely expected – another sign that financial hardship is set to continue for many throughout the winter.
“Increasing Government revenue through taxation is understandable – but that mustn’t lead to unintended consequences.
“For instance, the planned hike in capital gains tax risks disincentivising landlords from investing in the private rented sector. A shrinking PRS is not going to help anyone, least of all renters.
“With a 7 per cent rise in social rent also planned, it isn’t clear if private landlords are expected to maintain current rent levels. If so, they face being further stretched by rising bills and high inflation.
“The need to urgently balance the UK’s finances mustn’t let policymakers lose sight of the bigger picture. Longer term and wider market issues such as inadequate housing supply are just as important as balancing the books.
“safeagent recognises the pressures the Autumn Statement will place on renters – but the PRS has already shown it can support and work with tenants during periods of financial hardship.
“Like during covid, there is plenty that can be done. From supporting energy efficiency measures to help address rising energy costs, to encouraging open communication and advice on financial support options, agents have a pivotal role to play.
“Our focus is very much on making sure our agents have the resources they need to help landlords navigate these challenges and continue to give renters the security of a safe, stable home.”