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Autumn Budget 2023: Key Takeaways for the Property Sector

As we approach the end of a year in which the economy has been plagued by inflation and the country has been struggling with a cost-of-living pinch, the Chancellor announced his Autumn Budget which the government hopes will boost growth and productivity and provide a slightly more positive outlook for 2024.

We all know that the property market is a cornerstone of the UK economy, and Mr. Hunt has announced several key measures relating to the property sector as follows:

  • Planning Reform: local authorities are to offer guaranteed accelerated decision dates for major developments in England in exchange for a fee, ensuring refunds are given where deadlines are not met and limiting use of extension of time agreements.
  • Extra Funding for Planning Backlog: investment of an additional £32 million across housing and planning to unlock thousands of homes across the country, to be put towards tackling planning backlogs in Local Planning Authorities. The government is also investing £5 million in additional funding for DLUHC’s Planning Skills Delivery Fund for Local Planning Authorities to target application backlogs.
  • Local Nutrient Mitigation Fund: following the government’s failure to pass legislation dealing with the nutrient neutrality issues earlier this year (which was blocked by the House of Lords), £110 million of funding is to be provided to support Local Planning Authorities to deliver high quality schemes to offset nutrient pollution, unlocking planning permissions that are otherwise stalled.
  • New Permitted Development Right: the government will seek to introduce a new Permitted Development Right to enable one house to be converted into two homes without changing the façade. This will be implemented in 2024 following consultation early in the New Year.
  • Electric Vehicle Charging: unnecessary planning constraints are to be removed by accelerating the expansion of electric vehicle (EV) charging infrastructure and the government will consult on amending the National Planning Policy Framework to ensure the planning system prioritises the rollout of EV chargepoints, including EV charging hubs. It will also consult on introducing new permitted development rights to end the blanket restriction on heat pumps one metre from a property boundary in England.
  • Home buying and selling: the government is providing £3 million for a range of measures to improve the home buying and selling process, including pilots to develop property tech products and to digitise local council property data.
  • Business Rates Relief Extension: the small business multiplier of Business Rates will be frozen for another year, while the 75% Retail Hospitality and Leisure relief will be extended for 2024-25. The standard multiplier will be uprated in line with September’s CPI. These changes will take effect from 1 April 2024 in England. English Local Authorities will be fully compensated for the loss of income as a result of these business rates measures and will receive new burdens funding for administrative and IT costs.

Notably, there is no change to the current Stamp Duty Land Tax rules and rates – the Chancellor may be seeking to hold any such changes back until closer to the General Election, expected to take place during 2024 or early 2025 at the latest.

Large swathes of the Property Sector have been crying out for reform to the planning system for several years now and thus far the government have failed to deliver on their promises to streamline the planning process. As the housing crisis has deepened and more and more local authorities fall into financial difficulty, the planning system has been bursting at the seams and the Covid pandemic only made the process slower and more costly for developers across the country.

Perhaps the above measures will go some way to ease the pressures on the property sector and improve the outlook for the property market in 2024, but their effectiveness remains to be seen.

If we can be of assistance, please don’t hesitate to contact Matthew or any of our experts in our commercial property team.

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